Avant completes deal with MHCLG to defer building safety payments

Avant Homes has concluded a deal with the housing ministry to defer its mounting building safety remediation cost, the housebuilder revealed in latest annual results.

Previous financial statements had alluded to discussions over an agreement with the Ministry for Housing, Communities and Local Government (MHCLG) and the builder confirmed this week that these had concluded.

In documents filed at Companies House, Avant said it had entered into a payment plan agreement with MHCLG, under which the group will no longer be responsible for undertaking remediation of buildings itself.

Instead, each building will be subject to assessment and, if eligible, receive grant funding for remedial works through a government-funded scheme.

“Whilst the Group is responsible for reimbursing MHCLG for these costs, this is spread over a number of years which provides important liquidity support as well as the deliverability of long term committed finance,” it explained.

The reports also revealed that the group’s total provision for fire safety remediation increased again, from £107m to £113m.

Avant noted that this was a “complex area” and that it was “still at an early stage” in the process, with the “definite level of remedial work required” still unclear.

The group’s results, which cover the 52-week period ended 30 June 2025, also showed a drop in operating profit, as well as a substantial pre-tax loss, stemming primarily from debt interest payments to shareholders.

The group, which pursues a multi-tenure strategy across Yorkshire, Midlands, the North-east of England and Scotland, recorded a slight increase in revenue, which was up from £465m to £474m.

Operating profit dropped from £17.1m to £8.5m, while £93m in financial expenses and £27m in exceptional items saw it fall to a £111m pre-tax loss, a substantial deterioration on the £83m loss recorded in the previous period.

The large majority of the firm’s financial expenses came in the form of non-cash interest expenses on shareholder loans, reflecting the business’ private equity-backed model.

The firm’s long-term funding is provided through loan notes issued by the company to shareholders to part fund its acquisition by Berkeley DeVeer and Elliott Advisors in April 2021.

Interest accrues on the loans and is capitalised rather than paid in cash, with the notes repayable on a change of ownership.

During the period, completions dropped to 1,657 from 1,701, with social housing largely replacing private-rented in the mix.

Completions of the former increased from 185 to 307, while the latter dropped from 319 to just 49. Private for-sale homes remained the biggest component in the mix, with completions up from 1,197 to 1,301.

Avant said its performance continued to be impacted by the challenges of high interest rates and cost of living challenges, and also noted a difficulty in getting planning approvals. 

“Whilst private sales rates were slightly ahead of the prior year, the overall number of sales outlets continued to reduce due to the ongoing problem of achieving implementable planning permissions despite more favourable government housing policies,” it said.