Housing association income increased due to near doubling of open market sales turnover and sale of stock to other providers
Clarion has increased its surplus by 52%, following a near doubling in market sales turnover and the sale or transfer of 2,000 homes to other providers.
The 109,000-home housing association, in its financial statement for the year to 31 March, reported an overall surplus of £186m, up from £122m the previous year.
The surplus was boosted by a near doubling in turnover from open market sales from £87.7m to £157.3m, which helped surplus from sales increase from £1.6m to £15m.
Clarion also sold or transferred more than 2,000 homes to other registered providers in the year, which generated £59m of surplus, meaning its overall surplus on existing property sales increased by £61m to £86m. The overall post-tax surplus figure of £186m was higher than the £167m figure previously released by Clarion in an unaudited release.
The accounts also confirmed figures previously released by Clarion showing it completed 2,276 homes in the 2021/22 financial year, breaking its record for completions in a single year.
The figure of 2,276 is higher than the 2,126 total it achieved the previous year and cements it position as one of the biggest developers in the housing association sector.
According to accounts’ data released so far, its figure has only been surpassed by L&Q which built 4,154 homes last year.
Clarion also increased its turnover 12% from £944m to £1.06bn.
Clarion did however miss its original target of 2,800 homes. Its social housing lettings margin also reduced from 31% to 27.1%, which it said was caused “additional repairs and maintenance costs, and an increase in management and service charge expenditure”
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It said: “The overall operating margin is expected to be diluted through growing development sales activity (both through affordable ownership and on the open market), inflationary pressures and continuing high demand for investment in repairs and maintenance”
The publication of the accounts also comes after Clarion has faced criticism over conditions in some of its properties. It featured in an ITV documentary earlier this year which highlighted issues on its Eastfields estate in Merton.
Clare Miller, chief executive of Clarion, said in her foreword to the accounts : “It was a unique case for a number of reasons, we apologised unreservedly for the homes that had fallen into disrepair and I have recently published a longer article on our website setting out the progress we are making on the estate.”
Clarion was also served with a severe maladministration judgement by the Housing Ombudsman in April for failing to handle complaints adequately and was ordered to pay £2,300 in compensation. In May it was hit with a second judgement, prompting the ombudsman to investigate if there are systemic failings at the landlord.
Clarion said its £64m surplus increase was “dwarfed” by the £638 million it invested in social housing in 2021/22. This includes £136m on improving existing homes, up from £95m last year.
Clarion earlier this month announced it has appointed former Ofwat chief executive Rachel Fletcher to its board as it prepares for the Social Housing Regulation Bill, which will strengthen regulator requirements around tenant services.
Housing association financial statements 2021/22
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