Housing association puts new development on hold after slew of contractor insolvencies

At the end of the year, it had 12 active sites with new homes under construction. 

The impairment charge of £5.2m relating to insolvencies, and increased fire remediation costs of £6m, pushed the landlord’s overall operating costs to £166.2m for the year, up from £154.5m the year before.

The landlord said the impairment had also affected its annual surplus, which after tax was £3.4m. However, this is an improvement on last year’s results, when the landlord made an annual loss of £2.2m. 

While new projects were paused, in the year to March 2025 the landlord completed 407 new homes, its highest ever number. The majority were completed in London but it also finished schemes in Surrey, Northamptonshire and Nottingham.

Of these, 168 were affordable or social homes and 239 were for shared ownership. Next year, the landlord is preparing to hand over schemes including a major regeneration of Laurelwood Place in Elmbridge, Surrey, which replaces an outdated block of flats built in 1972 with 97 new homes.

Sales revenue for the year was slightly down, at £23m from the sale of 175 new homes, and the landlord had a higher number of unsold homes due to a number of schemes handing over later in the year. 

Overall turnover increased to £224.1m in 2024-25 from £207m in 2023-24, driven by social housing lettings income, which increased by 10.6% to £193.1m.

Last year, PA Housing invested £28.6m in its existing homes, up from £15.5m the year before. At the end of the year, 81% of homes had an Energy Performance Certificate of Band C or above. 

The landlord said it had made “considerable” progress on negotiations with building contractors for blocks where significant fire remediation works are required. It also managed to recover £3.4m on waking watch costs from the responsible contractors.

The total cost of remediation works is currently estimated at £84m, and the landlord said a high proportion is expected to be “recoverable” from contractors. 

In a judgement from the Regulator of Social Housing this week, PA Housing received G1 and V2 governance and viability grades, and its first consumer grading of C2.

Jessica Friend, PA Housing’s chief financial officer, who joined the organisation in March, said: “Our financial performance in 2024-25 was challenged by increased costs in some areas and this did mean that we missed our targets on some financial metrics, particularly operating margins.

“However, our investment in homes and services has facilitated an improvement in tenant satisfaction measures and overall financial results were robust.”

Ms Friend said that while the broader macro-economic and political landscape still requires careful navigation, there have been some “real positives” such as Spending Review announcements on the new Affordable Homes Programme and a longer-term rent settlement.