Until the 1980s almost all social/affordable housing was produced by local authorities from direct public subsidy or via the public works loan board.
The Thatcher Government (1979-1990) decided to decrease public borrowing, placing an emphasis on private finance as an alternative method of funding the upkeep and construction of new housing. This has allowed housing associations [HAs], through large scale voluntary stock transfers, to replace local authorities as the foremost providers of affordable /social housing in the UK.
Currently, the Government’s focus is oriented towards reversing the decade low rates of homeownership and providing much-needed affordable rental models.
In accordance with welfare changes, HAs could see a progressive fall in their creditworthiness, observing the sector mergers beginning to occur (partly from these cuts). To date, these have generally been credit neutral or financially positive, however the volume and focus of lending exposures among a small collection of bank lenders may drive a progressive redistribution of credit risk. HAs, in most cases, remain robust however, and with strong financial ratings.
Indeed, HAs, although facing structural changes, are one of the most effective ways to prevent the further decline in social housing stock. They operate through a unique public/private partnership, facilitating the continued steady construction, maintenance and repair of affordable housing, while a key facilitator in providing care for communities at local, regional and national level.
THFC is dedicated to responsibly coordinating investment into the affordable housing market. We have cultivated long-term relationships with the UK government (undertaking, from 2013, an exclusive partnership of the hugely successful Affordable Homes Guarantee Scheme), European Investment Bank (whose money we are able to pass on at cost, without charging a commercial margin), Homes and Communities Agency, National Housing Federation and other major finance and housing bodies.
THFC and a number of its subsidiaries are registered at the Financial Conduct Authority. In its function as registrar for community benefit societies, THFC is a non-profit distributing unregulated finance company, and its respective subsidiaries, abide to conservatively set covenants, providing safety from interest rate risk and offering investors access to floating charges set against THFC assets.
All relevant documentation is publically accessible from either the FCA or THFC and all financial statements are prepared and run in accordance with current applicable accounting standards.
By virtue of the diverse mix of HA borrowers THFC has built in its 31 year trading history, coupled with our corporate legal structure, investors enjoy risk diversification across the portfolio of instruments and borrowers. As our long term ‘A’ credit rating denotes, THFC is a robust business model with a host of distinctive qualities, and unrivalled experience within the affordable housing market.