Housing association giant boosts turnover and surplus but warns overall surplus figure in accounts will be impacted by £20m building safety impairment
Clarion Housing Group has increased its annual completions by 12%.
The housing association giant, in a trading update for the year to 31 March, said it completed 1,727 homes in the 2024/25 year, up from 1,538 the previous year. It however narrowly missed its original target of building 1,828 homes.
The group’s future homes pipeline stands at 20,173, up from 19,694 a year ago.
The update said: “There remains a chronic shortage of affordable housing in England, and we are pleased to have been able to increase the number of homes completed during the year.
“We retain a longer-term ambition to raise this level of delivery but will continue to deliver our pipeline at a pace that allows us to maintain a resilient financial profile.”
In common with other large London housing associations facing competing cost challenges and financial constraints, Clarion has reduced its development targets. It reduced its annual target from 2,161 in 2023/24 to 1,828 in 2024/25 as it ‘moderated’ its development programme but last year said it retains an ambition to build 3,000 homes a year in the longer term.
Clarion’s spend on new homes fell from £501m to £439m year-on-year, which it attributes to delays to starts on some of its larger schemes, while its spend on existing homes fell from £129m to £123m.
The 125,000-home group’s turnover increased 9% from £993m to £1.1bn while its operating surplus, which excludes one-off items, rose from £171m to £195m.
Clarion said the return to the inflation-linked rent formula for social housing increased its revenue, following the one-year 7% cap in 2023/24 implemented as part of the then Conservative government’s response to the cost of living crisis. It also said it is seeing the benefits of its new Connect transformation programme which is intended to improve cost control as well as improve customer service.
>>See also: MHCLG officials to discuss funding model proposed by Housing Today and the G15
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However Clarion said that while its underlying operating performance has been strong it is reviewing building safety costs and anticipates including a provision of around £20m in its final accounts that will impact on its overall surplus.
It said :”We are however continuing to seek recovery of these costs from third parties where appropriate.”
Clarion’s full, audited financial statements will be published in the summer.
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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