Genesis write downs come to an end

In its 2011/12 financial statement, seen exclusively by Inside Housing, the 33,000-home landlord revealed that the estimated value of its land had increased by £1.8 million.

This came after Genesis wrote down the value of its land bank by £20.7 million in 2010/11 - a figure that accounted for nearly 30 per cent of the sector’s total write downs for the year, according to the Tenant Services Authority.

The London-based association also lost between £5.8 million and £6.9 million in write downs in each of the three years from 2007/08 to 2009/10 having built up a sizeable land bank in the run-up to the credit crunch.

Rob Kerse, financial director at Genesis, said the situation had improved after the landlord sold off a number of sites for which it did not have development plans. The total value of the landlord’s undeveloped land is now just £31 million, as opposed to around £300 million in 2006/07.

‘The risk of any future loss is pretty low,’ added Mr Kerse. ‘Our core strategy to 2015 is to put the organisation in a much stronger [financial] position so we can provide more homes and services in the future.’

The landlord has a reduced building programme over the next three years, with just 193 new affordable homes planned in 2014/15, compared with 1,744 in 2009. However, Mr Kerse said Genesis hoped to build 600 affordable homes annually after 2015, even without government subsidy.

Overall turnover for the association was down slightly from £220.9 million in 2010/11 to £213.1 million, but its operating surplus climbed from £35.2 million to £46.7 million on the back of a £22 million reduction in costs.

This was helped by the consolidation of the former Genesis Housing Group into a single organisation, which Mr Kerse said allowed it ‘to generate operational efficiencies’, including a redundancy programme which resulted in 200 job losses in March 2011. Genesis also wound up most of its joint venture investments in the early part of 2011/12, while housing management contracts with Hackney and Westminster councils also came to an end this year.