MTVH changes parent company in move to simplify structure

Metropolitan Thames Valley Housing (MTVH) has changed its corporate structure, putting its main charitable stock-holding provider in place as its parent company.

The 56,000-home provider has announced that Thames Valley Housing Association became a subsidiary of Metropolitan Housing Trust from 31 December.

The move means the parent organisation of MTVH is now the charitable Metropolitan Housing Trust and not the non-charitable Thames Valley Housing Association as it has been since the two organisations merged in 2018. 

A spokesperson for MTVH described the move as a “technical change” that “simplifies” the G15 landlord’s structure. He said the change would have “no impact on our day-to-day operations or the services we provide to residents.”  

The move is also intended to simplify the mechanisms used for transferring gift aid between entities.

Credit rating agency Standard & Poors responded to the change by reaffirming the ‘A-’ long-term issuer credit rating for both organisations.

It said: “We think this change will better reflect the importance of MHT within the MTVH group. MHT holds the majority of the group’s housing stock and generates the vast majority of consolidated turnover.

“We understand both entities will remain registered providers of social housing with the regulator. This contributes to our view that TVHA’s mission and activities remain aligned with those of the group. Furthermore, having been the parent of MTVH since the merger, retaining part of its trading name, and being fully integrated into the group, we think TVHA continues to constitute an integral part of the group.”

Standard & Poors in December said the outlook for MTVH is “stable” as it believes the housing association “will be able to manage risks associated with its large investment programme in existing stock through effective grant negotiations and cost management, while maintaining a contained development programme.”

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Standard & Poors said it expects MTVH’s key financial metrics to “stabilise” in the coming two to three years after a weak 2023/24 in which it incurred £110m of building safety remediation costs. This contributed to MTVH posting an £80m deficit last year.

S&P said the size of MTVH’s building safety programme is “significant” and is likely to hinder improvement in the group’s adjusted EBIDA margins, which are expected to remain slightly above 20% in the next three years.

However, it added it expects MTVH’s management to handle these costs prudently “having gained clarity on the scope of the required works, which has resulted in a clear execution strategy.”

S&P said MTVH’s liquidity is “very strong”. It said it forecasts liquidity sources of around £1bn, about 1.9x the amount needed for capital expenditure, interest and principal repayments.

MTVH warned last month its build capacity would be limited without government support. The G15 landlord said it expects to deliver around 569 homes in 2024/25 as a whole, which would be a drop of 36% from last year’s half-year figure of 892.