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Clarion plots 10,000-home sale amid growing rationalisation
The UK’s largest housing association is making plans to sell up to 10,000 units over the coming years, as social landlords step up stock rationalisation amid an efficiency drive.
Clarion Group has said it is reviewing its 125,000-unit portfolio, and although the programme is at an early stage, the landlord could sell up to 10,000 properties that are isolated from the majority of its stock. The landlord – which was formed by a mega-merger between Circle and Affinity Sutton – currently owns stock across 160 local authority areas, which chief executive Keith Exford described as “arguably too many”.
He added: “We definitely will do it; it was always part of our strategy. We initially thought we would sell 5,000-10,000 but it looks likely that it will be closer to 10,000. We don’t have to be the biggest housing association.”
Under Clarion’s modelling it assumes the sales will be completed within 10 years.
The shift is part of a trend among housing associations looking to narrow their geographical footprints in order to become more efficient. Agency JLL predicts stock rationalisation will more than double this year.
Your Housing Group and Moat are actively selling stock, and other landlords are expected to bring large portfolios to the market in 2017.
Exclusive Inside Housing research into Homes and Communities Agency data shows 204 housing associations have 50 properties or fewer in multiple local authorities.
Meanwhile, 43 operate in local authorities where they own just a single property and 28 housing associations have 10 properties or fewer in five or more local authority areas. Clarion’s planned rationalisation will be the biggest overall.
It plans to sell the homes generally to smaller, more local housing associations which will effectiely allow Clarion to utilise the balance sheets of smaller providers. It will be carried out after “full consultation” with tenants, Mr Exford added.
Mr Exford said that besides increasing its efficiency, the sales would release liquidity to help it develop 50,000 new homes across all tenure types over the next 10 years, of which two-thirds will be affordable.
He said there was “no urgency” as the organisation already has £1bn of available funding to spend on its development pipeline.
Clarion has a combined turnover of £827m, a surplus before tax of £233m and existing assets worth £20bn.
Charles Cleal, head of stock rationalisation at JLL, said: “Holding low numbers of units in a local authority area is one of the most obvious drivers for rationalisation.”
UPDATE: At 9.30am on 21.4.2017
This story has been updated with more information
