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Large housing association sees shared ownership sales 54% lower than expected as EWS issues bite
PA Housing has seen first tranche shared ownership sales come in 54% lower than budgeted for, with the association blaming the ongoing External Wall System (EWS) crisis as the reason for the sluggish sales.
According to the landlord’s unaudited financial results for the year, shared ownership first tranche sales stood at just £12.4m, but PA had budgeted for £27.3m, leaving it 54% behind budget in this area.
The 23,000-home association, which is currently exploring a merger with Accent Group, said the coronavirus pandemic has had a short-term impact on operations.
“In particular, our reletting processes, new build completions and shared ownership sales have been affected, with the latter also being impacted by the national delays with provision of EWS1 documents,” it said.
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As a result, turnover from sales and lettings fell 11% behind budget to £18.1m.
Large parts of the property market have been paralysed by the EWS crisis, which involves mortgage lenders requiring an EWS1 form to ensure a building has now fire safety defects before lending to prospective buyers.
In total, PA’s operating surplus dropped from £54.6m in 2019/20 to £40.3m in 2020/21 – a fall of 26%.
Its turnover was £156.8m in the year, though the landlord had budgeted for a turnover of £175m.
The housing association said: “PA Housing’s long-term financial outlook is stable, in line with our business model which focuses on core social housing activities.
“There has been some short-term disruption due to COVID-19, but we have been working to ensure continued delivery of operations. Our liquidity position remains strong and we continue to pursue strategic funding opportunities to support our growth plans.”
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