Bond aggregator MorHomes falls to loss

MorHomes, a borrowing vehicle owned by more than 60 housing associations, recorded a loss after tax of £67,000 (compared with more than £1m profit in 2024), its latest accounts show. 

The social housing bond aggregator, which is in its sixth year of trading, said the loss was driven principally by revaluation losses on gilts. 

In the note on accounts, MorHomes’ chair describes conditions in the capital markets as “challenging,” with the benchmark gilt yield on the company’s 2038 bond exceeding 5% in January 2025, above levels seen during 2023/24, having been 4.30% at the start of the year, and as low as 0.75% in August 2021. 

With valuation losses on gilts excluded, the net loss is £13,000 (2024: £59,000).

MorHomes is a central borrowing vehicle designed to facilitate access to the capital markets by not for profit, registered social housing providers.  

It offers loans to housing association shareholders or potential shareholders in amounts from £10m upwards.

It was started with capital from 60 housing associations and has since received investment from a further eight. MorHomes raises finance on the bond markets and lends it to its housing association shareholders. 

All the loans it offers are social bonds, complying with the ICMA Social Bond principles 2018. 

>>See also: Bond aggregator raises £260m for Metropolitan Thames Valley and Leeds Federated

MorHomes’ lending amounted to £538.6m in the year to 31 March 2025, a slight increase on the £512.4m it lent in the year to 31 March 2024.

In the last financial year MorHomes extended two new loans, one in December for £13.2m to Soho Housing, and one in March for £13m to Elim Housing.

As of 31 March 2025, shareholders’ funds were £5m (2024: £4.9m). Of this, £2.8m (2024: £2.7m) was equity that borrowers were required to subscribe at the point of borrowing. 

A further £0.6m (2024: £0.5m) is the equity value of contingent convertible loans provided by borrowers. The remaining £1.6m (2024: £1.7) represents the “membership” equity from the 68 housing association members, plus profits to date.

Ratings agency S&P gave MorHomes an A- credit rating in December 2024 and the accounts say it is seeking to remediate the “poor outlook” that came with it.

Malcolm Charles Cooper, chair of the board, writes in his statement on the accounts: “We believe that the company is in a good position to maintain its credit strength and consequently continue to provide an alternative source of new loans to shareholders. The anticipation is that housing associations see the benefit to the sector of having access to a financial intermediary with the advantages described in this report and use it to an ever greater extent. 

“The more it is used the greater the benefits it will offer to the sector as it plays its part in meeting the government’s targets for new quality housebuilding, achieving ‘net zero’ and responding to economic challenges.”