Housing association giant sees 12% reduction in completions as it takes ‘cautious’ approach to delivery
Clarion has reported reduced development and turnover for the first half of the financial year.
The housing association giant built 785 homes in the six months to 30 September, a 12% drop on the 892 it completed in the same period last year, according to unaudited figures out today. The figures follow the organisation last month saying it was ‘dialling back’ on growth due to the current climate.
The group invested £202m in new affordable housing in the half year, a 16% drop on the £242m for the same period last year.
It said: “With the challenging new build market conditions, including materials shortage and pricing challenges, we have had to take a more cautious approach to investment in new homes.”
Clarion also reported a 6% drop in half-year turnover, from £512m to £481m which it said was primarily due to decreased sales income, which fell from £138m to £95m. Clarion last year built 2,276 homes, missing its target for the year of 2,800.
The organisation, in common with other large housing associations in recent weeks, had its financial viability grading downgraded by the Regulator of Social Housing (RSH) from the top ‘V1’ grade to ‘V2’ last month.
RSH said the downgrades reflect higher inflation and a weakening housing market “putting greater pressure on providers’ financial headroom as they continue to invest in new homes and carry out safety, decarbonisation and repair works.”
V2 ‘means an organisation still complies with the regulatory standard but “needs to manage material risks to ensure continued compliance.”
Mark Hattersley, chief financial officer, said: “We are pleased to report a good set of results, despite the significant economic pressures.
“We are well placed to navigate these challenges and absorb many of the shocks of the external market, whilst continuing to support our residents and provide homes to those that need them most.”
Clarion is also focusing on stock management after facing 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. It was also among six landlords singled out by housing secretary Michael Gove as having failed to adequately tackle housing quality issues in the wake of the death of toddler Awaab Ishak in Rochdale.
It was 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 it has created a dedicated team to tackle condensation, damp and mould and has invested in new equipment to support its early detection, “taking advantage of new technology in order to track property interventions and measure and report on results”.
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