(The following statement was released by the rating agency)
5 - In a report published today, Standard & Poor's Ratings Services discusses how social housing providers are responding to the changes caused by the U.K. government's efforts to rein in public finances (see 'U.K. Social Housing Sector: Credit Ratings Stable Despite Fundamental Changes In Funding Regime'). We also consider how these changes will shape the sector in the future.
The U.K. government's substantial changes to public policy started affecting registered providers (RPs) of social housing from 2012 onward. Despite the changes, we view the sector's credit quality as stable. Some RPs with large development programs and dependence on the housing market, high debt burden, or weak management may struggle to adapt to the new financial regime while the economic climate--and the housing market in particular--remains subdued. That said, we believe that the entities we rate are well-positioned to withstand the changes by adapting their business models to accommodate much lower levels of government grant and new development.
Furthermore, we consider that the government may be willing to support the sector as it has done in the past and we therefore maintain our view that the likelihood of extraordinary support is 'moderately high.' We expect this analytical element to continue to enhance the ratings on each individual RP. That said, the policy changes indicate to us that the government's commitment to support the sector might be constrained in the short-to-medium term by its aim of restoring the state of the public finances.
COPYRIGHT Copyright Thomson Reuters 2012. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Datafeed and UK data supplied by NETbuilder and Interactive Data.
While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk!
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.