Karbon boosts development but falls short of target

Karbon Homes has increased its development by 10% but has fallen short of its target for the year.

The 32,000-home provider, which is based in Newcastle-upon-Tyne, revealed it completed 707 homes in 2024/25, up from the 644 it built the previous year.

The provider, in its annual financial statements, said however it missed its target of completions equating to 2.5% of its social housing stock, falling short by 120 units. It said this was “mainly due to construction delays and material and labour shortages.” Its target for 2025/26 is 703 homes.

The group increased its turnover by £28m, from £191m to £219m. Karbon said the increase was due to the 7.7% social housing rent increase plus its acquisition of 750-home Leazes Homes last June.

The group’s income from non-social housing activity was £15.9m, similar to last year’s total of £15.3m. The group increased its first tranche shared ownership sales income from £7.2m to £8m, helping to offset a £1.7m fall in income from development services.

It’s overall surplus rose from £32.5m to £35.8m. The increase was constrained by a negative goodwill adjustment from its merger with South Tyneside Homes and a near £4m increase in interest costs. Its operating surplus excluding one-off items increased from £46m to £55m.

Karbon also confirmed it is pressing ahead with plans to register a for-profit provider with the Regulator of Social Housing in a drive to attract funding. Karbon incorporated the new business as a limited company on 15^th May and is awaiting registration.

“With limits on our financial capacity, due to rising costs from inflationary pressure and regulatory compliance, we are going through the process of establishing a for-profit registered provider called Graphite Living, which will open up access to a wider variety of funding sources for new homes delivery”, said Paul Fiddaman, chief executive of Karbon, in a foreword to the accounts.

The group has an ambition to build more than 4,000 homes between 2023 and 2028.

Karbon in May agreed £200m worth of new loan facilities with three lenders to support its investment plans.

The housing association in May agreed fresh loans with its existing lender, Santander, as well as with two new lenders, HSBC and Nationwide.