Fri 20 December 2019
Three-thousand home housing association Colne has welcomed a review of its credit rating by financial services company Standard & Poors (S&P).
The Essex-based association’s outlook remained ‘stable’ and the credit rating was unchanged at A. This reflects their continued longer term viability as they continue to build shared ownership homes in a more challenging environment.
David Hart, Colne’s Finance Director, said: “We are pleased to see our outlook remain stable. It confirms we are well-run and in a financially strong position.
“The review of our credit rating is an accurate reflection of the risk that Colne’s Board has identified as we continue to provide a range of affordable homes – including shared ownership properties - to help meet the increasing housing need in East Anglia.”
Colne provides over 3,300 homes in Essex and Suffolk, and aims to develop 150 new units per year in the coming years, a third of which will be shared ownership properties.
S&P continued to forecast that about 15% of Colne's revenue will come from the first-tranche sales of shared ownership units and that volatility in the share of revenue from this activity is to be expected owing to Colne's limited size.
The financial services company said: “While we believe management is consistent in carrying out its development strategy - and transparent in doing so - the
amount of shared-ownership development means the organisation has to manage a higher risk level.
“This risk is exacerbated by Colne's relatively small size compared with rated peers that are active in market sales activity.”
They said Colne’s ability to continue to draw on its credit facilities was strong.