57,000-home housing association’s balance sheet hit by multiple factors, including increased operating costs and a fall in home sales
Metropolitan Thames Valley Housing (MTVH) has reported a 33% drop in its annual surplus
The 57,000-home association, in its financial statement for the 2021/22 financial year, reported post-tax surplus of £40m, down from £61m the previous year. Its turnover fell 9% to £406m.
The group’s surplus was impacted by several factors including £12.9m in one-off costs relating to a fire on its Worcester Park estate near Morden in south west London.
In September 2019, a four-storey block in the Hamptons estate burnt down and MTVH is now restoring the block and remediating others on the same estate.
Its operating expenses increased 18% to £284m which it said was due to extra fire safety spend and rising costs of labour and materials. However, this was offset by a drop in cost of sales of £48m.
The group also reported a £6m drop in profit from open-market sales, raising £59m in sales income compared to £109m the previous year.
MTVH said it remains “committed to creating social housing subsidy through the market sale of homes in order to build more affordable housing than it could otherwise afford.” However earlier this year its plan to cut its 10-year development programme from 13,400 to 11,800 homes would be achieved by reducing the number of market sale homes built. Geeta Nanda, chief executive of MTVH this week confirmed the group would “significantly reduce the outright sale element” of its programme.
The group also wrote down the value of some of its investment properties by £7m “as a result of the poorer market for commercial properties.”
MTVH announced earlier this year that it spent £161m on new homes in 2021/22, only around half the amount it originally expected in the face of cost pressures and building safety spend uncertainty.
The G15 landlord completed 712 homes in 2021/22, this is down 29% year-on-year and means the association built out 85% of the 829 homes it originally planned for the year.
Nanda said: “As our property costs are rising, we have taken the step to significantly reduce the outright sale element of our development plan and have been cautious in committing to new schemes this year, spending less on new developments than we planned.
“Nonetheless, 712 new homes have been built and projects such as the regeneration at Clapham Park, one of a number of thriving joint venture partnerships, continue to make very real progress.”
Housing association financial statements 2021/22
Peabody boosts turnover and surplus due to shared ownership staircasing Housing association giant plans to start work on 7,000 new homes by March 2023
Sanctuary misses development target by a third due to ‘pandemic effects’ Housing association giant undershoots target but increases completions 34% year-on-year
Vivid increases development to above pre-pandemic level 33,000-home housing association completes 1,400 homes
Platform scales back targets for development and energy efficiency 46,000-home housing association increases turnover boosted by increased shared ownership sales
Later living giant Anchor posts £24.4m surplus following loss last year Housing association ‘on track’ with increased 5,700-home development plan
Hyde delivers fewer social homes than expected due to ‘delays and shortages’ 48,000-home housing association delivers 74% of affordable target, but hits lowered development target overall.
EMH Group misses development target by 40% Housing association says build hit by planning delays, materials shortages and pandemic impacts but is confident of hitting five-year target