Platform’s new build hit by inflation and supply chain delays

Platform Housing has reported a 33% drop year-on-year in its delivery of new homes as it battled inflation and delays to material supplies.

The 47,000-home housing association, in its unaudited results for the six months to 30 September, reported that it completed 475 new homes in the first half of the financial year, compared to 715 built in the same period last year.

It said: “Our homebuilding programme has been affected by an increase in global demand for materials, the impact of Brexit and the war in Ukraine.

“These have resulted in increases in materials costs and extended supply times”

However, Platform said that given its current pipeline of 2,405 homes under contract and nearly 800 approved, it expects to build between 1,100 and 1,200 homes in the full year. This would be a similar total to the 1,171 completed in 2021/22.

The housing association in the summer announced through its annual financial statement that it has decreased its medium-term house building ambitions due to the economic climate. It is now aiming to increase development to 1,600 homes a year by 2025 and not 2,000 by 2024 as it originally intended.

It is also now aiming to bring all its properties up to energy performance certificate C by 2030, rather than 2028 as originally planned.

Platform is also shifting its focus to larger land-led sites, rather than section 106.

It said: “The first half of the year saw the continued implementation of our development strategy, as we seek larger sites, with greater control over delivery, quality and sustainability.

“We are confident that the moderation of our medium-term development aspirations earlier this year ensures that committed programmes can be achieved whilst maintaining financial strength, but we remain prepared to continuously review the programme in light of changing external factors.”

The latest half-year figures show turnover rose only moderately by 0.7% to £151.6m while its operating surplus excluding one-off gains fell 1.3% to £46.9m.

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It said: “Operating surpluses and margins were lower than the prior year as high cost inflation and a shortage of labour supply was experienced in our maintenance division.”

Meanwhile housing association care specialist Anchor Hanover also reported a drop in its surplus and margin in the first half of 2022/3. It reported a 24% fall in its operating surplus, from £34.8m to £26.2m which it put down to cost inflation. It also said its average margin fell from 13.7% to 9.8% due to increased costs, “particularly in staffing and repairs.”

Anchor has recently bought 11 care homes, taking its total care homes that it operates to 125 with more than 6,500 residents.

Anchor last year it increased its development programme from 3,200 new homes over eight years to 5,700 homes over 10 years to 2029.