Places for People hit by sector’s highest ever write-down with £4.1m spent on payoffs
Landlord suffers £25m land hit
Places for People has seen the value of its land plummet by £25 million - a fifth of the total fall predicted for all housing associations in 2009/10.
The 60,000-home association’s annual accounts reveal it wrote down £25 million on the value of its land bank last year. The huge drop dwarfs the previous highest write-down in housing association history of £13.5 million - made by Affinity Sutton in 2008/09.
The last quarterly survey of housing associations accounts, published by the Tenant Services Authority in September, said it was anticipating £120.1 million of impairment charges from all English associations this year.
PfP’s accounts also reveal that it spent £4.1 million on severance pay over the past two years. This sum, paid out following a major restructure, was almost double the next highest figure recorded in a survey of redundancy and compensation payments made by 25 of the largest housing associations.
David Cowans, chief executive of PfP, said its future plans involved large-scale developments and that it had ‘secured enough land to build more than 20,000 homes over the next 15 years’.
The association posted a pre-tax profit of £23 million - although it would have posted a deficit without £36 million of assets arising from its merger with Cotman housing association.
A spokesman for PfP said that the value of the group’s land holdings which are not currently under development ‘went down as land prices across the UK fell’. He added. ‘The land will be used to develop new homes which, in time, we anticipate will generate a profit for the group. Some of these developments will span up to three economic cycles of good times and bad and will be subject to changing economic environments.’
The spokesman added that the severance pay had been made because of a group-wide restructure designed ‘to make sure we are best positioned to deliver on the large scale communities we are creating, building and managing’.
Jonathan Pryor, director of assurance and business services with Smith & Williamson, said that in general he had seen ‘almost no impairment in 2010 accounts’. Gary Moreton, partner and head of auditor Baker Tilly’s social housing group, said impairment was still a key audit focus and deprived areas have typically seen the biggest fall in land values.
Reduction in land value 2009/10
Severance pay 2008 to 2010
Total group profit before tax