Metropolitan Thames Valley Housing warns build capacity ‘limited’ without government support as completions drop

Metropolitan Thames Valley Housing’s completions have dropped 19% in the first half of the year.

The 56,000-home housing association, in a trading update, said it completed 236 homes in the six months to 30 September, down on the 293 completed in the same period last year.

The G15 landlord said it expects to deliver around 569 homes in 2024/25 as a whole, which would be a drop of 36% from last year’s half-year figure of 892.

The fall comes despite MTVH continuing to increase the amount it is spending on development.

Last year it spent £280m on acquiring land and developing new homes, up 40% from the previous year, as it increased its five-year development pipeline from 3,858 to 5,556 homes.

In today’s update, MTVH said it is planning to increase development spend this year further to a “record level” but warned its capacity to build is nevertheless limited without help from ministers.

It said: “We expect to invest a record amount in new homes development as part of our current programme to build around 1,000 new homes per year, however without an increase in direct revenue support from the government our capacity to build new homes will be limited.”

The update also said MTVH’s overall turnover in the six months rose from £209m to £227m year-on-year. Its rent and service charge income rose by £16m while sales income increased by £4m.

The group’s total surplus fell from £35m to £14m. MTVH’s operating costs rose by £13m to £163m. MTVH said inflationary pressure increased costs relating to salaries, utilities and managing agents.

MTVH said its net interest costs are £3m higher than the same period last year due to higher levels of net debt and higher variable rates, although interest expense has been mitigated by used of short term interest rate swaps.

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The group’s operating margin decreased from 36% to 27%. The group said margins will continue to be under pressure as operating costs are forecast to rise at a higher rate”, while the National Insurance employer contribution changes announced in the Budget are expected to increase MTVH’s costs by £3m.

Mel Barrett, chief executive, of MTVH, said: “We welcome the rent settlement of CPI+1% confirmed in the budget and urge the government to increase direct revenue funding at the Spring spending review to allow our sector to support its homebuilding plans.”