80,000-home housing association ramps up spend on existing homes

Southern Housing has decided to “stop making commitments on new developments” as it shifts spending towards improving existing homes.

accounts

Paul Hackett, chief executive of the 80,000-home housing association, said the move would enable it to “significantly derisk the business and focus on core social housing activities”. As a result, the group said it would no longer be monitoring new home starts as one of its key performance indicators.

Southern, in its annual financial statement for the year to 31 March, did say, however, that it would build out schemes it already owns and would still work in partnership to deliver housing with local authorities.

The association started work on 348 homes in 2023/24, down sharply on the 952 reported last year. It completed 776 homes in the year, down on 1,089 last year.

As previously announced, Southern is shifting expenditure into maintaining and improving existing homes.

It spent £247m on existing homes in 2023/24, an increase of 33% year-on-year and plans to increase this by a further £23m next year.

It said it has increased resourcing in frontline teams dealing with compliance, repairs and maintenance and complaints and has created a dedicated damp and mould team.

It said: “Stock condition data and agreed standards are informing the scale and scope of our investment programme. Part of our investment programme for existing homes includes scaling up our energy efficiency retrofit.”

Southern confirmed last month it would be making redundancies in its development team as a result of the shift in focus.

Southern’s accounts also revealed the landlord has made a deficit of £28m for the financial year, down from a surplus of £80m the previous year. The figure was impacted by a £30m loss from the fair value movements of property and investments.

The surplus excluding this fair value movement fell from £40m to £3m year-on-year, below the £21m the group had been forecasted in its half-year update.

It said: “Our results have been put under pressure for several reasons, notably a difficult contractor market which has delayed completion of new schemes impacting anticipated rent and sales income. “In addition, with a number of contractors going into administration we’ve reassessed several schemes, writing off abortive costs and increasing the impairment provision.”

The group’s turnover also fell from £642m to £609m. This was driven by a 66% drop in annual first tranche sales income, from £60m to £40m, and a fall in market sales from £67m to just £4m. The fall was partially offset by a 12% increase in income from general needs rental homes, from £359m to £401m.

Housing association financial statements 2023/24

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