Platform increases development amid contractor price increases

Platform Housing Group has increased it development of new homes by 38.3% in the first quarter of the financial year.

The 48,000-home housing association completed 289 homes in the three months to 30 June, compared to 209 in the same period last year.

The Midland-based landlord said it is projecting completions totalling 1,300 homes in the 2023/24 financial year, which would be an increase of around 17% on the 1,114 completed the previous year.

The year-on-year increase in build numbers comes despite rising contractor costs affecting Platform’s development programme.

It said: “Cost increase requests for schemes on site have been received from some contractors and in a small number of cases Platform are increasing payments where it is advantageous to do so.”

It said however that some of the cost increases had been mitigated by higher grant rates from Homes England. Platform announced in its annual financial statement last month that it had renegotiated its grant levels per unit upward by around 30%. It is now delivering 3,762 homes under the affordable homes programme instead of 4,680 as originally agreed.

It also said that the direct financial impact on Platform had been lessened by the fact the majority of its contracts were on a fixed term basis.

Platform’s revenue in the quarter grew by 10% to £80.4m, due largely to an increase in social housing lettings turnover as a result of rental increases and an increase in the number of social housing units.

However its operating surplus fell 10% to £20.8m while its operating margins dropped by 25.9%.

It said: “Operating surpluses and margins have been affected by higher levels of investment into existing homes, improving services for customers and cost inflation.”

The trading update follows Platform’s publication of its annual financial statement for 2022/23 last month.

This showed Platform increased its annual turnover by 1% to £300m. Its overall post-tax surplus increased from £59.6m to £85m due to favourable one-off costs, including pension movemenrs and loan breakage credits.

However, its surplus excluding one off costs fell by £8.1m to £49.1m. It said this was due to cost inflation as well as an extra £8.3m invested in homes. Platform said it accelerated its catch-up on backlogged repairs and invested £5.5m on sustainability works such as air source heating systems and photovoltaic panels.