Industry News


Difficult trading conditions being reflected in HA accounts


P


roblems associated with a stagnant house sales market and an increased regulatory focus on tenant services and compliance


with health and safety, is combining to put pressure on the accounts of some housing associations. Giant social landlord L&Q reported a sharp drop


in its annual surplus as it was hit by rising fire safety and maintenance costs. The HA has 102,000 homes but saw its post-tax surplus fall 45 per cent to £191m in the year to 31 March. Turnover in the same period was also down, falling nine per cent to £937m. The group warned in January that its annual


surplus would be significantly down, partly due to a £40m higher-than-expected fire safety and maintenance bill. 15 of its blocks have ACM cladding and it has set aside £50m for remediation work in 2019. It also revealed that it was selling 150 homes in response to the stagnant housing market. Another London based HA Optivo, also reported


a fall in its turnover after it stopped building homes for open market sale. In an update to the stock market, Optivo said it made a turnover of £314m, a slight fall in the £317m figure for the previous year. It made no open market sales during 2018/19


and therefore made no income from this tenure, but had made £12.5m in the previous year. Optivo also had an increased number of unsold shared ownership homes, which rose from seven to 27. Its chief executive, Paul Hackett, said the HA had re-allocated its planned market


sale homes to affordable housing. The 44,000-home landlord also revealed that its


surplus before tax fell slightly in the last financial year from £90m to £89m. Bromford Housing Group had a busy a year


during which it acquired Merlin Housing Society and Severn Vale Housing, but it also reported a drop in the amount of money it has to invest in its housing stock in the future. The HA said surpluses after tax for the year to


the end of March was £56m, down from £64m a year previously, on a turnover of £257m, although this was up from £221m in the previous year. It now owns and manages almost 43,000 homes across central and South West England. Bromford’s operating surplus reduced slightly


year-on-year, which it said reflected the ongoing investment it was making in the HA’s business transformation programme and neighbourhood coaching model. It says this will drive an improved customer experience and longer-term operational efficiencies and financial savings. LiveWest saw its operating surplus increase 15


per cent last year, despite a drop in its margins for social housing lettings and open market sale. In a trading update, the 36,000-home housing association said it made an £81m operating surplus for the year ending 31 March 2019, up from £69m the previous year. Livewest was formed out of a merger between DCH and Knightstone in March 2018, and is now


In an update ahead of its full accounts for 2018/19, the 19,000-home social landlord said its surplus was £13.2m, up from last year’s figure of £11.8m, on turnover of £109m, an increase from £100m last year


one of the biggest associations in the South West. The results show their turnover was up from £231m to £233m in its first full year as Livewest. Its surplus after interest payments was £56m, up from £44m. But demonstrating a healthier set of results, the


Manchester based social landlord Great Places increased both its surplus and turnover for the latest financial year it has revealed. In an update ahead of its full accounts for 2018/19, the 19,000-home social landlord said its surplus was £13.2m, up from last year’s figure of £11.8m, on turnover of £109m, an increase from £100m last year.


North East HA to invest £417m in property over next five years


Sunderland-based housing association Gentoo Group is to invest £417 million on improving its homes and bringing 1,900 rented properties and new homes for sale to the market over the next five years. The housing provider’s 2019-24 business plan


features an ambitious £300 million investment package to improve its existing homes. This includes:


• £22 million to fit more than 9,000 properties with full double-glazed windows by 2023;


• £38 million on fire risk works, external painting and environmental improvements to estates; and


• £110 million on repairs and maintenance services.


The Group also announced plans to increase the


number of affordable rented properties available in Sunderland. Through its affordable homes plan, Gentoo will invest a further £117 million and provide an additional 900 homes for affordable rent in the city by 2024 via a mixture of new build and


existing properties. In addition, its commercial arm, Gentoo Homes,


will build in excess of 200 new homes for sale each year and generate an annual profit in the region of £4 million to subsidise the Group’s affordable homes plan. Gentoo manages over 28,000 properties across


Sunderland and Wearside. Nigel Wilson, Group Chief Executive Officer, said: “Our five-year business plan is an ambitious programme of investment and house building but our tenants are at its heart. “We want to ensure our tenants’ voices are heard


and they have the chance to influence and shape the services we deliver for them. Our property investment programme will also ensure they have the best quality homes possible in estates they are proud to call home. “Gentoo is directly addressing the ongoing


shortage of affordable rented homes in the city by committing to bringing 900 more properties to the market in the next five years. Together with our Gentoo Homes build programme, we will provide a


14 | HMM June/July 2019 | www.housingmmonline.co.uk


Nigel Wilson, Group Chief Executive Officer, said: “Our five-year business plan is an ambitious programme of investment and house building but our tenants are at its heart. We want to ensure our tenants’ voices are heard and they have the chance to influence and shape the services we deliver for them.”


huge choice of rented and private properties for the people of Sunderland and the wider region.”


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