Is your glass half empty, or are you grateful just to have a glass?

Posted: 29th November 2013

Is your glass half empty, or are you grateful just to have a glass?

In the days before Christmas when it was still possible to easily travel west to Exeter, Altair consultants made the journey to the NHF South West Finance Conference “Promoting Financial Resilience”.

Altair partner Susan Kane was leading one of the workshops, “Are you ready for future challenges”, so two other members of the team decided to keep her company.

Susan’s session was extremely popular. It may have been to do with the fact that she promised to explain “how to please the Regulator” that there was a packed audience and people were turned away.

Once we had got over the excitement that the conference venue was part of Exeter Rugby Club, we picked up on the following topics that were discussed.

Regulator comments:
a) G1 and G2 are acceptable, but G3 and G4 are not. However, the assumption is that G2 is not a place to just rest on your laurels – the HCA wants you to move up to G1 and, if you don’t, then questions may be asked
b) Debt risk is here to stay, and the old world of interest rates is gone for the foreseeable future
c) It is OK to take risks and diversify into non-core business, but the process must be well managed
d) Big pay offs to ex-staff will be scrutinised
e) Exposure to cash risk is a concern of the HCA and a cash buffer of less than 18 months will lead to questions.

Charging properties:
Not the most riveting of topics, but the room did have a great view of the rugby pitch – sadly no players, but there was a man spiking the turf.

It may be a dull subject, but if the process of charging properties is incomplete you don’t get your money. Many things can cause delays, with planning-related sewage problems being a frequent reason (not something we pursued too closely). Messages are:
a) Be prepared and plan
b) Keep reviewing along the way
c) Consider who pays for potential defaults on infrastructure work on large schemes that may not be carried out until many years in the future.

Engaging with lenders when going through a merger or acquisition:
This was led by an ex-banker who felt that more mergers are on the way, mainly for cost savings and value for money. In the past, lender approval was something of a box-ticking exercise. This is no longer the case, and the banks are on the lookout for ways to re-price and improve their terms. He gave several tips:
a. Communicate with lenders
b. Plan, plan, plan…
c. Prepare, prepare, prepare…
d. Have a Plan B just in case.
The final talk was from Piers Williamson of THFC. This was a talk with lots of graphs, some of them very scary. Slightly surprisingly, he put up a photo of Mark Carney, and no-one recognised him as the governor of the Bank of England (or did they think he was George Clooney and were too shy to speak up?). Piers’ view was that Help to Buy is a Marmite policy, and its outcome is by no means certain – so no surprise there.

In the background all day was “will the Chancellor include many housing items in his autumn statement” (well maybe not that high in all minds) but as it turned out there was little on housing in the statement.

Several speakers referred to glasses half full/empty, and the HCA representative was grateful to have a glass at all. It seems that the housing world is a bit anxious at the moment.

Angela Davies, Senior Consultant. Angela can be contacted on 0771 284 9357 and

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