Housing association will seek to recover costs from third parties as remediation provisions and contractor failure blunt surpluses
Clarion has reported a record turnover of £1.09bn.
The UK’s largest social landlord’s account for the year to 31 March 2025, published this morning, showed turnover growth of 10% compared with the £993m turnover recorded in 2023/24.
However, the provider also reported a drop in surplus. Its operating surplus was down from £237m to £232m, while its net surplus fell from £87m to £82m.
It marks the third successive year that Clarion’s operating surplus has fallen.
The 125,000-home association nonetheless said the figures reflected a “strong underlying performance” compared with the previous year, noting that they included £29m of impairments and provisions for building safety and remediation, as well as contractor failure.
It promised to seek recovery of costs from third parties “where appropriate”.
“These results demonstrate that, whilst operating in a constrained economic environment, Clarion has been able to deliver improved services to its residents, build more new affordable homes, invest in our existing homes and maintain a strong and resilient financial profile,” said Mark Hattersley, chief financial officer.
“Our financial strength - demonstrated by our successful return to the capital markets during the financial year - means we are well positioned to deliver on our long-term objectives and withstand ongoing market volatility.”
Earlier this year, Clarion renewed its £3bn borrowing programme, which it plans to use to fund a range of sustainable investments.
“I am proud of what our dedicated staff have achieved for our residents and our communities and look forward to working with them all as we embark on the next 125 years of our journey,” Hattersley added.
Clarion spent £837m on housing in the year, split nearly equally between new development and maintenance.
It completed 1,727 homes in the year, which was up from the 1,538 delivered the previous year, but lower than its 1,828 target. 83% of the homes it delivered were for affordable tenures, which was up from 67%.
The group retains its goal to deliver more than 3,000 units a year, but said it had “moderated our development programme to slower growth due to on-going economic uncertainty and delays, thereby reducing sales risk and funding requirements”.
This has resulted in a reduction in its 2025/26 target, while the target for the year following has been increased. These targets now stand at 1,810 and 2,300, respectively. Clarion has more than 20,000 homes in its development pipeline.
Overall customer satisfaction nudged up from 84% to 84.7%, as did satisfaction with repairs, which rose from 90% to 90.4%.
>>See also: Sanctuary meets development target but sales drop
Duringthe year, the group recognised three provisions, the first of which was a £16.6m building safety provision for works to external wall systems.
The second was a £12.4m remediation provision for buy-backs, works and associated costs linked to a development in Lewisham completed in 2016. The third is a £3.7 million remediation provision for works at a site in Wembley.
“The group is separately seeking to recover its remediation costs under warranty or through claims against those parties involved in the original development,” it said in its accounts.
“Where possible the group will also seek recovery of its building safety provision from developers or through the Government’s Cladding Safety Scheme”.
Housing Today and G15’s State of the Capital report
Providing new social tenancies for the 323,800 households on London’s waiting lists would inject at least an additional £7.7bn a year into London and the UK’s economy.
However, while social housing providers and ministers are both aware of the need for more affordable housing, both housing associations and the government have balance sheets constraints.
This inaugural State of the Capital report, produced by Housing Today in partnership with G15, looks at several ideas that could be adopted to help the sector build much-needed affordable housing in London during these difficult times.
The report is written by Carl Brown of Housing Today, in collaboration with the G15.
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