Bromford increases spend on existing homes amid 20% increase in demand for repairs

Housing association Bromford, which is set to merge with Flagship in the first half of 2025, has raised its spending on existing homes by to £34m, up from £25m this time last year.

The 47,000-home association attributed the 36% increase to “continued elevated levels” of demand across many services, with demand for repairs rising by 20% compared to last year.

In a trading update for the six months to 30 September, Bromford said it expects this high level of demand to continue into the second half of the year, affecting its overall operating margin, which has decreased from 31% to 30% year-on-year.

Expenditure on reducing outstanding repairs during the period has led to a decrease in Earnings Before Interest, Taxes, Depreciation and Amortisation, Major Repairs Included (EBITDA MRI) interest cover year-on-year, which has fallen to 1.8x from 2.2x.

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Margins on first tranche sales of shared ownership homes have also decreased from 21% to 15% compared to the same period last year.

Bromford has also delivered 457 new homes in the first half of 2024/25 financial year, which marks a small decrease on the 472 homes it delivered in the same period last year. 

Of the 457 new homes, 220 were for social rent. 

The association’s turnover rose from £153m in the six months ending 30 September 2023 to £167m in the same period this year.

Its post-tax surplus grew from £33m to £36m, while its operating surplus increased from £48m to £50m, which was slightly below its target of £55m.

In a statement, Bromford’s chief executive Robert Nettleton said that over the six months since 31 March 2024, increased demand for repairs, the introduction of new consumer standards, and a change in government have all affected the housing association’s business plan and operating model. 

Nettleton noted that Bromford’s merger with Flagship “will create additional capacity of nearly £2bn over the next 15 years to deliver at scale and help support the government in its target to build 1.5 million new homes in the next five years.”

Under the merger proposals, the two housing providers will merge to create Bromford Flagship, a provider of 78,000 homes.

The organisation’s increased financial capacity will enable it to deliver 2,000 homes annually for the next 30 years, with the goal of offering 50% of these homes at social rent.

He added: “We also welcome the announcements in the recent Budget on expanding funding for the Affordable Homes Programme and a reaffirmed commitment to a long-term rent settlement which will help to provide some much needed certainty to our sector in the coming years.”