The housing association completed 654 homes in the last half-year, with net surplus down almost 50%

The latest trading update from housing association giant Peabody reveals its half-year development numbers are down 35%.

In the six months to September 2023, the historic 108,000-home housing association completed 654 new homes, compared with 1,004 completions for the same period last year.

It invested £268m on new homes during this financial period, with a further 470 starts on site. A drop in development is not unexpected as Peabody chief executive Ian McDermott in April told Housing Today last year of plans to reduce short-term development plans in the face of inflation.

An artist's impression of a market square with fountains and seating area surrounding by residential buildings, representing the housing association Peabody's Southmere development in Thamesmead, south London

Peabody’s Southmere development in Thamesmead

In a note on today’s unaudited report on the stock exchange, the housing association said it was “currently behind schedule” on its sales programme with “no expectation that sales will achieve 2022-2023 levels.” 

Net surplus for the period is down by almost half at £41m compared to £79m for the six months to September 2022.

The housing association said this reduction is explained by higher interest rates, fewer completions and reduced surplus on joint ventures.

Turnover was down from £515m during the six months to September last year, to £489m in this half-year.

“We continue to invest in getting closer to residents through a renewed local focus, with more neighbourhood teams, proactive condition surveys and a plan for a more effective and efficient repairs service,” Peabody’s chief financial officer, Eamonn Hughes said.

“We continue to make progress with our substantial change programme and this trading update demonstrates that we are prioritising investment.”

It invested £184m on repairs and maintenance over the six months, up 35% on its spending during the same period in 2022.

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In September, Peabody reported a sharp increase in turnover, surplus and development in its first annual accounts since its merger with 37,000-home landlord Catalyst. The number of homes it completed increased nearly threefold to 2,399, from 866 in the previous year.

In 2021, Peabody’s late chair Lord Kerslake said the combined organisation would be targeting production of 3,000 homes a year that was before McDermott’s announcement of a reduction in output however.

peabody mcdermott

Peabody’s chief executive Ian McDermott

Housing associations have had a difficult year amid warnings from the Regulator of Social Housing about weakening balance sheet