Clarion ‘dialling down’ short-term development plans

Clarion has reined in its development plans because of the looming economic crisis, following the Regulator of Social Housing downgrading its financial viability. 

A spokesperson said: “We are dialling back some of the additional growth we had planned, as the economic forecast means the market for private homes will slow down over the next 12 months.”

However, the 125,000-home housing association declined to detail how much it was cutting back on development by value or number of homes.

This comes as the Department for Levelling Up, Housing and Communities has revealed the landlord is one of six it wrote to last week about its handling of repairs and tenant complaints, following the death of a two-year-old in a Rochdale Boroughwide Housing property because of mould.

On scaling back development, the spokesperson added: “Like all housing associations we have to respond to the external economic climate.” They added: “We are committed to continuing to build at scale and the vast majority of homes we deliver will continue to be for affordable tenures.” 

The housing association was one of 19 that the Regulator of Social Housing downgraded from a V1 to V2 last week, meaning it still met the regulator’s financial viability requirements but needed to manage material risks to ensure continued compliance, because of the worsening economic conditions. The group reported on Monday it had retained its A- credit rating with S&P, meaning it has a ‘stable’ outlook.

Clarion, which reported it had increased its surplus by 52% in the year to 31 March this year after doubling market sales turnover and transferring 2,000 homes to other providers, said its development team would “keep the situation under constant review”.

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It added: “We remain confident that Clarion’s prudent approach to financial management, the significant flexibility in our forward plans and our strong liquidity positions us well to respond to changed economic environments.”

The group’s 2019-2022 corporate strategy said it plans to invest £13bn in its development programme over ten years. It also said Homes England had given Clarion £249.7m for 2021-26 as a strategic partner for its Affordable Homes Programme 2021-26 to build 4,770 homes. 

In a quarterly performance update in October, the group said it “continued to invest significantly in its existing home”, spending £54m in the six months to 30 September, and was taking a “cautious approach to investment in new homes”, spending £247m in the same period.

The housing association delivered 2,276 new homes in the 2021/22 year, which is said was “a record number”, and has reported several developments in the pipeline. 

In April it secured planning permission for a 1,400-home scheme on vacant land west of Leeds, and in May Merton Borough Council approved plans for its first 201 new homes that will form part of the regeneration of an estate called Eastfields.  

Its development arm Latimer has planning permission to build a mixed-tenure scheme of 212 new homes on the site of the former Richmond upon Thames College. It also has plans to build a 9,000-home garden community on the Colchester and Tendring borders. 

Housing secretary Michael Gove wrote to Clarion last week saying he was “deeply disappointed and concerned” that he was writing to the housing association “again” after the Housing Ombudsman had found severe maladministration in its failings in handling repairs. The case concerned the organisation’s failure to resolve a tenant’s leak, which led to issues with their shower and electrics. 

Gove told the housing association it was “absolutely unacceptable” the housing association had failed to listen to the tenants’ repeated complaints and called for a face-to-face meeting with chief executive Clare Miller. 

The other social housing providers the secretary of state wrote to last week to warn them their service to tenants was “unacceptable” were: Southern Housing Group, Onward Homes, Catalyst, PA Housing and Johnnie Johnson Housing. 

David Orr, a Clarion board member, wrote in an opinion piece for Housing Today: “Those of us, like me, who are involved in the governance or leadership of landlord bodies must take responsibility and be held to account for failings which lead to these extreme housing conditions.”

The spokesperson for the housing association said the death of the two-year-old Awaab Ishak in Rochdale “underlines the absolute need to resolve condensation, mould, damp and disrepair issues in our homes promptly and effectively.”

He said they were giving residents support and advice on how to combat the early sings of damp and mould in their property, and are reviewing all existing reported cases of condensation, damp and mould. 

The association has also been taking measures, such as increasing investment in humidity and ventilation monitoring devices, over the past few months, the spokesperson said.