GB Social Housing closed its seventh tap issue on Friday 24 November at an effective fixed rate of 3.644% (UKT 4.75% 2038 Gilt 1.844% and spread 1.8%) which represents the best achieved rate for a GB Social Housing tap issue to date. There was strong demand for the benchmark issue from the capital markets and our tap was four times oversubscribed. This tap issue provides funding to Mount Green HA, Caledonia HA, Mid-Wales HA and Harrogate HA.
All existing GB Social Housing (GBSH) borrowers are, as far as we are aware, fully compliant with current fire safety regulations.
At this stage, GBSH is working with all existing borrowers to establish the full effect of any new or additional fire safety regulations, both in terms of safety of residents and any financial implications of implementing new fire safety regulations and this work is ongoing.
GBSH focus on lending to small and mid-sized housing associations, and one consequence of this is that the vast majority of borrower stock is low rise rather than high rise or tower units. In the case of one borrower only, GBSH has taken security over an estate which includes two blocks of high rise flats. The two blocks have been ascribed nil value pending clarification of changes to applicable fire regulations.
GBSH has received legal advice relating to lender liability for repairs to high rise towers and it is clear that a mortgagee does not become liable for the state of the property simply by virtue of its security. If a mortgagee has property on charge that could require significant expenditure to comply with current or future fire regulations, the mortgagee has the option simply not to enforce security on that property and it would be free from liability. This will remain the default position for GBSH as mortgagee until there is clarity on both the intrinsic value of the applicable high rise towers and any future fire or other regulatory changes that might affect the value of these charged assets.
Our most recent tap issue on 7 March 2017 was for £40,200,000 at an effective rate of 3.842%, which is the lowest ever rate achieved for our borrowers. Participants in this tap issue are Harrogate Housing Association, Nehemiah United Churches Housing Association, Mount Green Housing Association and North Devon Homes