Materials and labour shortages mean growth was slower than expected for 47,000-home social landlord

Orbit Group saw its housing completions rise by 19% in the last financial year, despite facing headwinds from rising construction costs.

The 47,000-home social landlord, based in Coventry and focused on the Midlands and South-east, said it built 1,013 homes in the 12 months to March this year, up from just 848 as it expands production to meet a target to complete 6,500 homes over the five years to 2025.

balance sheet accounts

However, the housing association said the figure, despite being a sharp rise on the 2020/21 number, was actually below the target of 1,141 completions set at the start of the financial year.

Chief executive Mark Hoyland said: “Build programmes have been partially impacted by the pandemic and materials and labour shortages. As a result, we are slightly down on our build forecast, delivering 1,013 versus 1,141 new homes in the past year.”

However, Hoyland said high construction costs had been offset by price growth in house sales, with a strong pipeline of sales for the current financial year. The results sees Orbit join with a number of other associations to miss development targets in the last financial year, including Moat, Sanctuary and Hyde, citing build cost pressures.

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The landlord, which last year agreed a £104m strategic partnership deal with Homes England to build 1,500 homes, said its development pipeline now totalled more than 5,000 plots. Orbit has already drawn down £119.6m in grant from a 2018 strategic partnership agreement with Homes England, which has produced 479 completions and a further 1,234 starts on site so far.

The rise in development came as Orbit saw its turnover increase to £374m, producing a pre-tax surplus of £82.4m, up from £62.8 in 2021.

Orbit is in talks to merged with troubled east London-based association Swan, which has been under investigation by the regulator. Hoyland said negotiations were continuing to progress, with the aim of creating a 60,000-strong organisation.

Jonathan Wallbank, group finance director, said: “The pandemic, war in Ukraine, rising inflation and cost of living crisis are being felt across the sector and the wider economy. However, despite these exceptional challenges, we have continued to deliver a very strong performance, increasing both profits and turnover, and maintaining a strong margin.

“The number of new homes delivered has increased year-on-year and we have continued to make good progress towards decarbonisation with our social housing dDemonstrator projects and the launch of net zero carbon targets and roadmap.”

Housing association financial statements 2021/22

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