Magazine article Public Finance

RSLs Count the Cost of Falling Land Values

Magazine article Public Finance

RSLs Count the Cost of Falling Land Values

Article excerpt

Falling land values during the recession have cost housing associations a total of £174m in impairment charges, figures reveal.

Ninety-two associations with land banks that have dropped in value in the past 12 months recorded write-downs in their 2008/09 accounts, according to the Tenant Services Authority's latest quarterly survey.

In May, the TSA reported that 77 associations were likely to make write-downs worth £125m. But, in spite of the increase, the authority remains generally upbeat about how the sector is coping with the downturn in the housing market The charges represent less than 0.5% of property and other assets owned by the registered social landlords affected and are significantly lower than those incurred by private house builders.

'None of the associations have reported financial difficulties or are in breach of covenants in their loan agreements with lenders,' according to a TSA report published on August 12.

The number of unsold homes built by RSLs for shared ownership fell for the second quarter running, from 8,742 to 8,173, while fewer homes that were initially built for sale were being converted to social rented housing. …

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