Sovereign posts drop in surplus due to lower property sales

Sovereign has reported a 1.7% drop in its annual surplus due to lower property sales in the pandemic lockdown.

The large housing association developer posted a surplus for the year of £78m in its accounts for 2020/21, down from £79.4m the previous year.

The overall surplus was impacted by a 23% fall in the surplus from sales of housing assets, from £10.7m in 2019/20 to £8.2m in 2020/21.

Sovereign completed 1,099 homes during the year, down on the 1,773 completed the previous year pre-pandemic. The 1,099 homes included 474 for shared ownership, 434 for affordable rent, 151 for and 40 were non-affordable tenures. The group has a development pipeline of 7,000 homes.

The accounts said: “The Covid-19 pandemic and subsequent lockdowns have impacted the surplus from sales of housing assets… The prior year was positively impacted by land sales to joint venture partners, strong activity in shared ownership staircasing and Right to Buy programmes, as well as the sale of some non-core property assets.”

Despite the pandemic, the group increased its turnover to 1.5% from £411.2million to £417.4m. Sovereign said a drop in shared ownership first tranche sales receipts, from £14.8m to £61m was offset by a £14.3m increase in rental income an increase in receipts for open market sales of £8.9m.