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Fast-growing housing association Hightown has reported a rise in annual surplus and revenue and expects to add an extra 1,000 homes to its estate by 2021.
The 6,300-home landlord, which owns properties across Hertfordshire, Bedfordshire and Buckinghamshire, revealed that its surplus rose 12% to £18.7m in the year to the end of March 2019 off the back of revenue of £84.7m. Revenue in the prior year was £69.4m.
The group’s overall operating margin was down slightly at 30.9%, compared with 31.7% the prior year.
“Our finances remain in good shape despite the third year of rent cuts,” Bob Macnaughton, chair of Hightown, said in the association’s annual report.
Social landlords have been forced to reduce rents by 1% a year since former chancellor George Osborne reversed rising rents in the summer 2015 Budget.
Earlier this year, the group secured a £60m loan to build new homes, its biggest-ever funding deal.
The group invested £98.6m in building 408 new homes in the year, with 65% of these at “affordable rent”. Only 28 homes were built at social rent, which Hightown blamed on the “low level of social housing grant available to subsidise this tenure”.
The group’s gearing rose to 54.5% from 53.2% the year before, as a result of completing new homes and forward-funding planned projects.
Around 37% of its properties are let at social rent, the group revealed, down from 39% the year before.
Of the 1,000 new homes it plans to build, around 40% of these will be on sites bought by Hightown, with the rest under Section 106 on developer-owned sites. It plans another 1,000 homes by 2023.
The association is a member of the Homes for Cathy group. Of 549 properties it let last year, 200 of these were to homeless people.
In June, Hightown reached a settlement with two contractors on a scheme after suing them over a 35ft-wide sinkhole that opened up underneath some of its homes
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