Saffron Housing boss hopes AA� rating can fund future growth
A Norfolk-based housing association is planning to turn to the money markets to secure funds to buy up hundreds of affordable homes in the region.
Saffron Housing, based in Long Stratton, has been awarded an AA3 rating from Moody's, the first housing association in East Anglia to secure the listing.
Chief executive Adam Ronaldson said the rating was the first part of a move to access millions of pounds of extra funding to take advantage of the depressed property and buy up homes currently earmarked by developers as affordable as part of so-called section 106 agreements with local councils.
Saffron's executive team of Mr Ronaldson, Stephen Flowitt-Hill and John Whitelock, and chairman and vice chairman, Michael Harrowven and Ken Warman delivered a compre-hensive presentation to Moody's, as part of the ratings process, without engaging outside consultants.
Saffron, which has a �22m turnover and employs 170 staff, has current borrowings of �74m to invest in new homes but the ambition is to almost double that in the next four years in a bid to buy up an extra 500 homes.
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'When we transferred from council control in 2004 we had a single financial arrangement with one bank, but time moves on and that's no longer such a good arrangement as the nature of the relationship is changing,' Mr Ronaldson said. 'If we are aiming for expansion, we've got to look at alternative sources of funding.'
Saffron, a not-for-profit organisation, has seen its surplus rise from �873,000 in 2009 to �6.4m in 2011 and Mr Ronaldson said the rating could help secure funds from pension funds or private equity groups.
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'We see market opportunities for us,' he said. 'The development and construction scene is quiet but there are people with properties they want to dispose of. There are regional and national builders who need to start moving stock and we have seen prices come down as a result and we would like to take advantage of that, but that takes money and the Moody rating is part of that process.
'We are in discussions with developers to purchase properties.'
He also expected the purchases would generate a need for more staff.
Mr Whitelock, Saffron's director of new business, said: 'Clearly this credit rating signals to business that Saffron once again leads the way in establishing affordable housing providers as an important contributor to the regional economy.
'We are looking forward to working with existing and new partners as we explore and create new development areas.'