Landlords must be prepared to justify their record surpluses
The annual financial reporting season begins this week with London & Quadrant posting what is believed to be the largest ever surplus by a housing association of £95 million.
L&Q is joined by Bromford Group which increased its surplus by 29 per cent to £22 million, and other large landlords are expected to follow suit. This begs the question of why such large surpluses are necessary, and this will rightly be asked by tenants and, based on previous experience, politicians. Landlords need to be prepared to answer this or they will end up in a fight over whether there should be surpluses at all.
L&Q and Bromford argue that the ability to generate a surplus implies a financially sound business. This ability to attract investment, therefore, allows landlords to continue to deliver large development programmes which would otherwise be impossible. Then there is support for employment and training - vital if people are to be helped off benefits and into work. Questions will come and landlords must be ready with the answers.