REDUCTION IN NET PRESENT VALUE DUE TO RENT CUT
- 26 Sep
There is a huge reduction in the 'Net Present Value' (NPV) of social housing across most of the country due to rent cut, according to new research by Savills Housing Consultancy
NPV is the 'rental income the landlord can expect over a four-year period less cost'; it is the value of social housing to the landlord.
Here are the findings of the research which was based on information gathered on 420,000 homes, according to Inside Housing:
- London was the only area where NPVs increased
- There was a peak of 38.3% in the southwest
- There was also an average fall of 15.9% elsewhere
- Landlords had not yet put plans in place to cut back costs, which would see the value of properties rise
- Most landlords have responded by reducing planned maintenance spend to deliver an immediate reduction in expenditure
- Because of rules protecting lenders from the rent cut if the repossess a home, valuations for loan purposes do not fall as quickly
- However, over the four year period of the rent cut, they will start to deteriorate
Head of Savills Housing Consultancy, Mervyn Jones, said:
"The data shows that, in general, housing providers are responding to the rent cut by making savings in planned maintenance, but to maintain NPVs they need to go further and look at reducing day-to-day costs. This latter aspect does take longer, but it must be part of a balanced approach to cost savings.
"If housing providers do not take further action, it is likely that this will reduce their financial capacity to develop homes. There is a risk that it will potentially seriously affect their business plans as it feeds into loan covenants."
What do you think?
Please tweet comments @suppsolutions
For more details, visit Inside Housing
- 02 Nov
THE ONS PLANS TO CHANGE THEIR DECISION TO MAKE HOUSING ASSOCIATIONS PUBLIC BODIES
According to reports by 24 Housing, the ONS said the following:Gavin Smart, Chartered Institute of Housing's deputy chief executive also said:"Although we have been expecting this decision for some...
- 30 Aug
RECENT ANALYSIS FINDS THAT THE HELP TO BUY SCHEME HAS ADDED TO THE INFLATION OF HOUSE PRICES
The analysis of the Help to Buy Scheme revealed the following:The chief executive of Paradigm Housing Group, Matthew Bailes, said:" ... clearly, it worked well for developers, and for providers, it...
- 22 Aug
A NORTH WALES COUNCIL REVEALED THEIR WAITING LIST FOR NEW HOMES HAS REACHED BREAKING POINT
The north Wales Council revealed their waiting list for new homes has reached "breaking point".According to Clare Budden, Flintshire Council's community enterprise chief officer said:"There are...
- 17 Aug
HOMELESSNESS POLICY IS UNDER REVIEW IN A NORTHAMPTONSHIRE COUNCIL
Kettering Borough Council has amended its letters to homeless residents to let them know of their right to request a temporary accommodation review.According to an ombudsman, Michael King:"People in...
- 15 Aug
FINANCIAL CONSTRAINTS HAVE CAUSED THE CLOSURE OF MANY CHILDREN AND YOUTH CENTRES
Local Government Association (LGA) made the following findings:Chair of the LGA's children and young people board, Richard Watts, said: "The reality is that services for the care and protection of...
- 11 Aug
RESIDENTS OF BUILDINGS IN LEDBURY ESTATE, SOUTHWARK, SOUTH LONDON WILL BE MOVED OUT TEMPORARILY
The buildings in Ledbury Estate in Southwark have been constructed in a similar way to Ronan Point, a tower block in Newham which collapsed in 1968 as a result of a gas explosion, killing three. An...
- 10 Aug
THERE IS A DECLINE IN THE HOUSING MARKET IN LONDON AND OTHER PARTS OF THE SOUTH EAST OF ENGLAND
The Royal Institution of Chartered Surveyors (Rics) made the following findings:Chief Economist at Rics, Simon Rubinsohn:"Sales activity in the housing market has been slipping in the recent month...
- 07 Aug
REPORT FINDS THAT PEOPLE ARE INTENSELY SUFFERING FROM LACK OF AFFORDABLE HOMES IN SCOTLAND
According to the report by "Shelter":Shelter's deputy director, Alison Watson, said:"This report shows the disproportionate impact of Scotland's housing crisis on young people and private renters who...
- 02 Aug
NEW REPORT BY THE PUBLIC ACCOUNT COMMITTEE IN WALES COMMENDS HOUSING ASSOCIATIONS
The report which was put together after nine months of inquiries stated the following:Nick Ramsey, Chair of the Public Accounts Committee, said:"Generally, we found governance and regulation within...
- 31 Jul
LONDON COUNCIL URGES THE GOVERNMENT TO MAKE MEASURES TO END LETTING FEES FOR PRIVATE RENTERS
The London council say urgent action is needed because the government has not provided "a clear timescale to introduce its own measure", Letting Agent Today, reports.Last year, the government had...
Support Solutions 5th National Housing Support & Social Care Conference 2014 The Social and Financial return seminar was very helpful, helped me think about our approach to bidding, negotiating for funding and keeping hold of what we have! The New Technology seminar was really an eye opener- really got me thinking about potential applications for older people. P.M - Four Housing