Landlord increases projected spend on existing stock from £500m to £770m over the next 10 years
Notting Hill Genesis (NHG) has announced is cutting its annual development from around 1,000 homes a year on average to 600 homes as it redirects spend towards improving existing homes.
The 60,000-home provider, in an unaudited trading update today for 2023/24, said inflation and interest rates have “altered the economics for development, particularly for not-for-profit organisations.”
It said: “We have therefore concluded that continuing to develop new homes at the same rate would not be financially sustainable and would jeopardise our ability to make the much needed improvements to residents’ homes.”
NHG has completed 5,000 homes over the past five years but has said today it will reduce its delivery over the next five years to 3,000 units.
It will focus on regeneration schemes and projects to which it has already committed.
NHG said this decision will allow it to increase the amount it spends on existing homes from £500m to £770m over the next decade.
It said: “We have made a good start, with our refurbishment and improvement programme and the transformation of our finance and operations functions, both supporting the future delivery of better quality homes and a far better experience for residents.
NHG however said it completed 822 homes, this year, up from 459 last year.
The landlord also confirmed that it has made a deficit of £82m in 2023/24. NHG in April warned it would post a deficit after identifying £110m in one-off costs relating to building safety liabilities and asset impairments.
NHG is just the latest in a line of large RPs to announce changes to enable it to focus on existing residents and stock. L&Q in May announced it is exploring the sale of its private rental properties and strategic land company in an effort to ‘put residents first. Clarion, which owns and manages 125,000 homes, earlier the same month announced it is planning a radical restructure to focus on improved housing management and customer service.
Southern earlier this month confirmed redundancies in its development team as it shifts spend towards improving existing homes.
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