Moat misses build target but revenue rises

Kent-based housing association Moat has seen its revenue rise sharply despite missing its development target for the 2021/22 financial year after schemes were impacted by labour and materials shortages.

The social landlord, which serves customers in over 20,000 homes predominantly in London, Kent and Essex, said turnover rose by 18.7% to £181m after revenue from sales of shared ownership homes more than quadrupled to £34.6m.

The firm reported completion of 500 new build homes in total in the year to March 31 2022, up from 422 the previous year, which included 30 private sale homes, up from just six in 2020/21.

However, the 500 figure was over 20% below the 607-home target for completions set out for the year. Moat’s annual report also said it started work on just 356 homes this year, a drop from the 397 started last year, and also below the 400-home target for starts.

It added: “The handover dates on a number of schemes have been moved into 2022/23 as starts on site and handovers have been impacted by on-going shortages in materials and labour and the significant increase in costs of materials.”

Moat said in its accounts that “with high inflation leading to rising labour and material costs in our supply chain and our fixed cost contracts, there is a risk of contractors going into administration”, and that it was working with its contractors to prevent this.

The housing association is now targeting to start construction of 400 homes this year and complete 443, but said its longer-term target to complete 650 homes a year remained intact. It says it has 1,142 homes currently under construction, with a further 382 homes in its pipeline.

Moat reported a surplus of £47.9m, up from £36.4m the previous year.

Steve White, Moat chair, said: “The higher cost of materials and a shortage of skilled labour has had a significant impact on the cost of both building new homes and delivering our services to residents.

“Although the delivery of new homes was impacted, we completed 470 affordable homes across our key areas and started the construction of a further 356 homes.”

Moat’s results come after a series of housing associations have revealed the impact of rising cost inflation and material and labour shortages on their development ambitions. Last week the Department for Levelling Up, Housing and Communities issued a report admitting that cost inflation risked derailing the government’s £11.5bn affordable housing programme.

The report on the progress of the £11.5bn affordable homes programme (AHP) said: “The pressures could have a serious impact on the financial viability of individual schemes and also on the overall financial health of providers. This could limit the appetite for grant funding and significantly affect the success of the programme”.