Housing association with ambitious growth plans beset by “delivery challenges” including cold weather impacts
Great Places Housing Group has missed its development target for the first nine months of the year.
The housing association, which is aiming to build 11,000 homes by 2030, completed 365 homes between 1 April and 31 December, hitting 75% of its target of 485 for the period.
The housing association, in a performance update, said: “We work hard to overcome delivery challenges around labour, materials, approvals and land registration.
“Examples of specific delays include highways adoption, delivery of kitchens, services & substation works, and cold weather in December affecting brickwork and the knock-on effect on roofing and plastering.”
A Great Places spokesperson told Housing Today the association is now forecasting 670 completions in the full year and not 773 as originally targeted.
The landlord is still aiming to build 11,000 homes in the 10-year period to 2030 and currently has 1,800 under construction. Last year it appointed a new executive director of growth to help it ramp up development.
The update shows Great Places increased its surplus from £16.5m to £18.8m year-on-year, ahead of its forecast of £18m, while its turnover grew from £117.8m to £119.4m. It said demand for its shared ownership and outright sales products is “incredibly strong”.
However, it was one of 13 housing associations to have their baseline credit assessment reduced by rating agency Moody’s earlier this month.
Moodys’ baseline credit assessments measure associations’ standalone intrinsic strength, without having to call on any support from parent or related organisations or government.
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Moody’s said the lowered assessment of the associations, including Great Places, was because of their “high exposure and lower resilience to weakening economic conditions, including prolonged high inflation, capped social rent increases, a housing market downturn and higher interest rates.”
Great Places was also one of 48 housing associations downgraded by the Regulator of Social Housing in the weeks before Christmas from the top ‘V1’ grading for financial viability to ‘V2’. V2 means an organisation still complies with the regulatory standard but “needs to manage material risks to ensure continued compliance.”
The RSH judgement said Great Places is planning to “significantly” increase its drawn debt to fund development and has a “material financial exposure to the housing market.” It said: “Delivering planned investment and sales, in combination with the current economic uncertainty in relation to inflation and interest rates, reduces Great Places’ capacity to respond to adverse events.”
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