Pandemic blamed for reduction in asset sales and lower development at housing association giant
Home Group’s annual surplus has fallen by more than a third as expected sales of stock were delayed due to the pandemic.
The 55,000-home association, in its accounts for the year to 31 March 2021, reported a surplus of £26.5m, down from £41.2m last year.
A major factor in the drop was a £6m reduction in surplus generated from sales of existing stock as several planned disposals were not able to be completed in the financial year due to the pandemic. The figure includes surplus generated through the sale of poorly performing stock as well as sales of existing homes to tenants, through shared ownership staircasing or schemes such as the Right to Buy.
The overall surplus was also impacted by a £3.7m impairment charge incurred on a completed affordable housing scheme.
The association did however increase its turnover by 5.8%, from £406.1m to £429.9m year-on-year. Income from new build sales rose by £13.2m, despite the number of sales falling from 590 to 516. This was because a larger proportion of sales in the year were outright market sale properties rather than first tranche shared ownership sales, thereby delivering higher proceeds.
Home Group built 1,019 homes in the year, down on the 1,179 in 2019/20 and missing its pre-pandemic target of 1,363. Surplus from new build sales and joint ventures was £9.2m, lower than the group’s original target of £12.1m
Overall, Home Group spent £158.9m on delivering new homes, down from £192.5m the previous year.
“Despite lockdown halting construction for a significant period, we delivered 1,019 homes last year. That was only slightly down on the previous year,” said John Cridland, chair of Home Group and the former director general of the Confederation of British Industry (CBI).