Lenders made £6bn of new loans in 2002/3, compared with £3.3bn the previous year and £4.3bn the year before, according to the Private Finance Monitoring Bulletin published annually by the Housing Corporation and the National Housing Federation.
A sum of £2.4bn went to fund stock transfers – £1.7bn more than in 2001/2. Development funding increased by £300m and funds for refinancing and working capital went up by £700m last year.
Nationwide, the sector's biggest lender, widened the gap between itself and its closest rival by more than £800m during the year. Its expansion was partly down to the acquisition of the social housing loans of French bank BNP Paribas, which had lent the sector about £500m.
Mark Webster, Nationwide's controller of housing finance, said its shares in the £348m refinancing of Orbit Housing Group and the £850m Glasgow transfer contributed to the rise.
Abbey and Lloyds TSB also moved up the lending league, with Abbey lending more than £1bn during the year and moving from fourth to second. Lloyds TSB moved from 11th to ninth with about £200m of loans in the year.
Roger Lee, senior lending manager at Abbey, said loans worth a total of £700m to Weaver Vale, Havebury, Glasgow, Riverside, Cobalt, Knowsley, Craven, Helena, Walsall and Hanover/Hackney had contributed to the bank's rise up the table.
Royal Bank of Canada, best known for its work in the capital markets rather than in bank loans, rose up the table with more than £500m of loans.
The capital markets were almost static during the year, with just one refinancing deal accounting for the £170m increase in bond issues during the year.
John Shinton, director of capital markets at RBC Capital Markets, said the bank had been lead arranger on several large transfers in 2002/3. This year, it is on course to do £460m of bond deals.
Shinton said: "The message that comes out is that bond issues were low but they are currently really quite high. I put it down to the fact that last year we were financing transfers and getting bank debt in place, and only when they are done do we think about whether we can improve terms and then get refinancing through the bond market."
He said the transfer market was quite buoyant during 2002/3 but was set to contract this year as councils looked at alternatives such as arm's-length management and the private finance initiative.
The Housing Corporation predicted that the amount of private finance needed by housing associations would drop £1.3bn this year, largely because of the diminishing stock transfer market.
Source
Housing Today
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