Economic challenges mean Manchester-based association still misses development target and revises down Homes England programme

Manchester-based housing association Great Places increased its development activity in the year to March by 16% despite growing “delivery challenges”.

The 25,000-home organisation said it built 649 homes in the 2022/23 financial year, up from 557 in 2021/22, but nevertheless failed to hit its development targets.

It also said it had revised down its Homes England-funded development programme in the light of increasing build cost pressures in the market.

The housebuilding effort came as the registered provider, which recently called off plans for a 34,000-home merger with MSV, reported a surplus for the year to March 2023 of £45.9m, down 1.8% on turnover of £168m, up 1%.

The increase in output came after Great Places in 2021 secured its second Strategic Partnership with Homes England, designed to deliver 4,920 new affordable homes by March 2028 with £241m of grant funding.

However, Great Places said that “challenges”, including “increasing cost pressures” meant it had recently held further discussions around the Homes England build programme, and revised the volumes down by 9% to 4,500, and increased the grant available to £270m. This was to “reflect the challenging markets that we are working within”, it said.

The 649 homes built this year was significantly below the 773-home target for the year, the organisation said, “reflective of the current delivery challenges facing the construction sector”. However Great Places said that demand for shared ownership and outright sales homes remained “incredibly strong”, and that it started work on 852 affordable homes started across 17 sites in the year.

Great Places chair Tony Davison said the organisation had delivered some “fantastic” achievements despite current challenges. He said: “We are continuing to experience one of the most challenging economic and operating environments for many years with impacts on the worldwide and UK economies, the housing sector, our customers, our contractors, our suppliers and our colleagues.

“The continuing effects of Brexit and the Covid Pandemic on supply chains, followed by the war in Ukraine and the very significant increases in inflation, particularly through spiralling energy costs have created a cost of living crisis and there remains uncertainty on many fronts.”

The publication of the accounts comes after the organisation earlier this month said it had ended talks to merge with smaller local provider MSV, citing the current challenging “operating environment”.

In a statement to the city two weeks ago, Great Places said: “The operating environment has thrown up many unanticipated challenges since both organisations began talks”, and added that the decision to delay talks had “caused our Boards to reflect on the business case for merger”.