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Thanks to its strong financial management, experienced and professional management team and agile response to risk, Cross Keys Homes (CKH) has retained it’s A+ rating from Standard and Poor’s Global Ratings (S&P), along with its stable outlook. The leading regional housing association is proud to remain in the top tier of rated social landlords, despite operating in a challenging climate.
The S&P report noted CKH is expected to maintain strong financial management and performance, supported by high demand for affordable housing, with only a limited increase in debt.
At the same time, S&P affirmed their ‘A+’ issue rating on the £150 million bond issued in September 2014 by Cambridgeshire Housing Capital PLC, CKH’s funding vehicle. Cambridgeshire Housing Capital PLC was set up for the sole purpose of issuing bonds and lending the proceeds to CKH, and is viewed as a core subsidiary of the CKH group.
S&P consider CKH’s Directors team to be well-established and experienced multidisciplinary professionals who are maintaining the solid performance of the organisation through the austerity years. They also note that that the company’s investment in technology to improve service provision has offered cost-efficiency benefits during the period of rent cuts.
CKH benefits from its geographic coverage, as the areas it has been long established in and its growth areas are located in the east of England, where rising market rents have created affordability challenges for local residents, resulting in high demand for social housing. Meanwhile, its strong performance in managing vacant properties has resulted in very low vacancy rates at about 0.5% of rental – one of the lowest in S&P’s rated social housing portfolio.
Even in areas where risk is higher – such as first tranche shared ownership sales – CKH has established a strong track record, thanks to the demand for below-market-rate housing in the areas it operates and a rise in availability of shared ownership mortgage products. Despite margins from shared ownership sales coming under pressure across the sector, CKH has maintained strong and steady margins at 38%.
Claire Higgins, Chief Executive of CKH, said: “In a world of increasing uncertainty it is really rewarding to have our A+ and stable rating affirmed by S&P. It is testament to the hard work of my team in driving efficiencies across the company, as well as being aware of, and reacting quickly to, risk. We have worked hard against many challenges to maintain our financial strength and stability to not only ensure the security of our tenants, but also to build the affordable homes that are desperately needed across the region while still providing the support services and community investment we are so proud of.”