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Fifty-nine housing associations were entirely dependent on selling homes to generate a surplus last year.

A report on housing association global accounts, published by the Tenant Services Authority this week, suggests that the housing market fall means the regulator is most concerned about a select band of associations which, for the past three years, did not generate enough cash without sales to meet interest payments on their loans.

The report states that property sales are ‘critical for around a third of associations to achieve benchmark levels of interest cover’.

And it reveals that 17 housing associations have been reliant on surpluses from property sales in each of the past three years to generate a surplus or reduce losses.

During 2008 associations made £577 million profit on property sales.

Overall, 83 traditional housing associations have been reliant on asset sales to either post a surplus or negate a loss in the past three years, the report states. Almost 160 associations rely on property sales for at least 25 per cent of their surpluses.

In the books

The report says that the recession means the reliance on sales may have a greater impact on next year’s global accounts. ‘It is likely that the level of sales which contribute to the surplus for many associations will abate in 2008/09 and beyond,’ it adds.

The indication of a slowdown in sales ‘will be all the more marked in 2009’ it continues. The figures also reveal that housing associations made £22 million of impairment charges in 2008. This was up by £1 million from 2007 and £17 million on 2006.

The TSA refers to this as a modest figure, but warns that it anticipates this will be a ‘key issue’ in 2009 that associations will ‘need to manage to prevent adverse impact on surpluses and potentially loan covenants’.

Inside Housing rev-ealed earlier this month that 50 associations are predicting that the value of their homes and land had plummeted so much they expected to make write-downs in their 2009 accounts.

Housing associations also took on an average of more than £15,000 debt per home for the first time in 2008, the report reveals.

But the figures also reveal that housing associations reached a collective turnover of £10 billion for the first time last year. This represented a 10 per cent jump on 2007.

Peter Marsh, chief executive of the TSA (pictured), said: ‘Although the sector is impacted by the downturn, it continues to perform well.

As of January, associations already had £14.6 billion of private finance in place, and they intend to draw down £5.3 billion over the next 12 months.’