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This year marks a significant departure from the usual format of the Global Accounts. For the first time, much more attention has been devoted to the evaluation of financial performance than before. Jointly published by the National Housing Federation and the Housing Corporation, the 2001 Global Accounts and Sector Analysis ("2001 Global Accounts") incorporates powerful graphical tools, a more comprehensive set of financial ratios and insightful financial profiling for different types of housing associations.

HIGHLIGHTS FROM 2001

GROWTH
The main characteristic of housing associations activities during the 2001 financial year was that of strong growth. A 9% increase was reported over 1999/2000 in housing assets, which rose to £51bn. Total turnover experienced a 14% increase with income receipts of £6bn being taken. And turnover of £0.7bn has been generated from various other social housing and non-social housing activities. The results from such diversification have increased by 21% over the last year.

DIVERSITY
Major differences are evident, not only with the size of housing associations, but also between LSVTs and traditional housing associations.

n Size - The 2001 Global Accounts are based upon the published accounts of 1,846 housing associations. 82% of this number has less than 1,000 housing units. In contrast, a small number of very large traditional housing associations (1.6%) manage 29.2% of housing units.

n LSVTs v Traditionals - It is in the nature of LSVTs, which are entirely financed by private debt and incur deficit in early years, to show low interest cover and high leverage ratios in the early years. Their special nature is reflected in their business plans, which lenders in the housing association market recognise and understand well. Among traditional housing associations, the larger ones tend to have higher gearing and lower interest cover ratios due to higher rates of expansion into a wider diversity of activities and development programmes, and consequently their greater use of private finance. The financial position of medium sized associations has generally remained the same from 2000. Collectively they are the lowest consumers of cash with only slight increases in debt and interest paid. Despite being static overall, this segment exhibits financially healthy characteristics.

The major financial characteristics of traditional housing associations with less than 1,000 units include a growth in total debt relative to growth in assets and low and declining profitability. Generally, they use lower levels of debt compared to other housing associations so remain on the whole in a comfortable financial position.

LOOKING FORWARD
What future opportunities and threats for the social housing sector emerged from the analysis undertaken in the 2001 Global Report?