The Shape of Things to Come

Fire Sale

There’s been a lot of talk of late about the potential impact of UK Housing Association’s being reclassified as part of the public sector. Isabel Hardman exemplifying the apparent concern about  the potential £60bn (or more) impact on public finances if that is the case.

Yet George Osborne seemed nonchalantly unconcerned about the prospect of an Office for National Statistics review at last week’s appearance in front of a Lords committee. And the No 10 Press Office have confirmed the statement made by David Cameron today about Housing Associations being part of the public sector.

The reason for this nonchalance?

Could it be the £133bn gross book value of Housing Association properties outlined in 2014 Global Accounts?

Could it be £78bn net book value of Housing Association properties (net of the £46bn of government and other public sector grants given to them)?

Could it be that any additional PSBR implications will be a mere blip, as the markets are informed of a long term plan to either sell the debt on to institutional investors ( as Colin Wiles hinted last week)  or even sell shares in them like other public assets (think Post Office, RBS etc)?

Perhaps the forthcoming Spending Review & Housing Bill will take the ‘Right to Buy’ to a whole new level – offering the potential for sales of shares in nationalised Housing Associations at an individual and institutional level?

Or just bring in significant institutional investment, and net a profit for the taxpayer.

£60bn or even £70bn of PSBR debt pales into insignificance when compared to a £133bn gross book value which might be realised for the taxpayer on sale.

‘There is particular investor interest in the UK, Spain and the Netherlands.’ says Kate Allen in the Financial Times today – especially following a government drive in the Netherlands to break up not-for-profit landlords and sell their assets.

Expect the unexpected…..

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