Major association retains credit rating to further plans to build 2,000 homes a year
Developing housing association Sovereign has retained its credit rating despite the concerns around the slowing housing market and Brexit.
Sovereign, which built 1,500 homes last year, said that both S&P and Moodys had maintained their respective A+ and A2 ratings on the body.
However, S&P has said the outlook for Sovereign is negative, given the potential of a damaging Brexit outcome.
Associations such as Sovereign are reliant on favourable credit ratings in order to borrow money cheaply to finance the construction of affordable homes. Earlier this week S&P threatened to downgrade 20 major associations in the event of a “no-deal” Brexit.
The news comes after major associations, such as L&Q, have put development programmes on hold due to the sluggish London housing market, with some concerned about the implications of falling sales on heavily indebted organisations.
Housing secretary Robert Jenrick said yesterday that housing associations, which the government has encouraged to borrow to develop, must take responsibility “for how indebted they’ve become”.
Barry Nethercott, Sovereign’s interim chief financial officer, said the 58,000-home organisation was “a major business and an ambitious housing association”, with plans to develop 2,000 homes a year.
He said: “These solid foundations, recognised again by two major credit rating agencies, means we can deliver on our fundamental purpose, providing quality homes, better places, with great services.”
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