Housing association giant increases spend on existing stock from £393m to £418m
Clarion has reported a 10% drop in both its turnover and surplus for 2023/24.
The 125,000-home housing association giant, in its financial statements for the year to 31 March, has reported turnover of £993m, down from £1.1bn last year.
Its overall surplus also fell from £97m to £87m, and its operating surplus, which excludes one-off items, dropped from £261m to £237m.
The group’s operating surplus from core social housing lettings increased 12% from £162m to £182m.
However, this was more than offset by a decrease in ‘other social housing activity’ from £77m to £26m. This include a £30m reduction in surplus from property disposals as Clarion “rephased” its disposal programme “in response to uncertain market conditions”.
Its open market sales surplus fell from £21m to £4m. Clarion said: “External pressures on development output combined with the availability and affordability of mortgage products has impacted performance.” Clarion’s underlying operating surplus from shared ownership first tranche sales also dropped from £15m to £5m as it sold 696 homes compared to 913 the previous year. Clarion said this “reflects our more cautious approach to development, combined with challenges in the supply chain and increased development costs.”
As previously announced Clarion built 1,538 homes in the financial year. A spokesperson said this was “despite significant slowing of the market due to supply-chain challenges, mortgage availability and planning/regulation uncertainty”.
This was down on the 2,032 completed last year and lower than its original 2023/24 target of 2,161.
Clarion has now set lowered targets of 1,828 and 1,799 completions in 2024/25 and 2025/26 respectively.
“Although we retain an ambition to deliver over 3,000 units per annum, we continue to moderate our development programme to respond to market uncertainty and our financial capacity,” Clarion said.
“This has resulted in the target for 2024/25 being reduced from what was previously disclosed. Positively, we are still projecting growth in future years but at a slower more cautious rate.”
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Clarion, which recently announced a major restructure to improve customer service, also increased the amount it spent on existing stock from £393m to £418m. This is made of £289m on responsive maintenance and £129m on upgrading homes.
The group’s ongoing ‘Connect’ transformation programme has identified key areas of improvement, including improving handling of customer enquiries, housing people more quickly and ensuring frontline workers are more visible.
Clare Miller, chief executive of Clarion, said: “Over the last 12 months, we have reviewed the delivery of our services such as repairs and managing the condition of our homes while striving for greater efficiency and providing value for money.”
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