For profit provider’s highest ever delivery figures still 15% below target as development hit by economic turmoil
Housing association Sage Homes delivered a record 3,447 affordable homes last year, the most of any association, despite missing its own development target as economic conditions worsened.
The Blackstone-backed ‘for profit’ provider said in its report and accounts for the 2022 calendar year that it increased its output on the 3,287 homes delivered last year, giving it total group stock of 10,700 by the end of the year.
However, the 3,447 homes delivered, largely via section 106 agreements with developers, was 15% below the 4,071 target it had set itself, and came as the number of homes it contracted in the year for future delivery sank sharply.
Sage Homes, which was set up in 2017 and has a target to build 30,000 homes by 2030, said in the report and accounts that the number of homes contracted plummeted by 62% to just 2,008, from over 5,000 in 2021. The reduction in deals for new homes meant Sage’s development pipeline shrink from 10,664 homes to 8,978.
John Goodey, Sage’s chief financial officer, said in the report and accounts that the failure to hit the delivery target was due to the fact “housebuilder partners took longer to deliver new homes than planned”, while the “adverse economic backdrop and slowing of overall housebuilding” was behind the reduction in contracts signed. He added that events in 2022 unfolded “in a way that was not foreseen when Sage Homes set its financial and operational targets in the latter half of 2021.”
However, despite the delivery challenges, chief executive Mark Sater hailed the firm achieving its highest ever output of new homes, with Sage accredited by Savills as the largest housing association provider of affordable homes for the second year in succession.
Sater said: “As well as delivering a record number of new homes in 2022, we also prioritised the quality of services we provide to our customers by increasingly taking direct responsibility to manage our customers’ homes. We revisited our purpose, mission and values to ensure we build a truly customer-centric company.”
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The organisation said it built 1,965 new affordable rented homes and 1,482 Shared Ownership properties, working in partnership with 233 local authorities and investing £525m. It said it was also England’s eighth biggest provider of homes for social rent in the period.
Sage’s pre-tax loss reduced in the year to £6.2m from £17.2m as its turnover grew sharply to £227m, from £174m on the back of its increasing portfolio.
The for-profit registered provider said it was also making progress addressing customer service challenges identified the previous year. Sage hired a chief customer officer and set up a new customer care team in the year, helping it to beat its customer satisfaction target by increasing customer satisfaction from 72% to 77%.
However, the organisation said that just 69% of complaints were responded to within the target time, which while two percentage points higher than 2021, remained well below the 2022 target of 95%. The annual report said: “If our customers do need to raise a complaint, we are committed to responding within target times. Whilst short of our stretch target, the (2%) improvement on 2021 demonstrates that the measures we have put in place are starting to take effect.”
Sage Homes has used housing association giant Places for People to manage its homes during its set-up period, but is due to take housing management in-house from the end of the year, as part of a long-established transition plan.
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