NHG posts large deficit after £164m in exceptional charges

The deficit has increased from £82m in 2023-24, which was similarly impacted by “building safety liabilities and asset impairments” of £110m and lower sales figures.

Turnover increased by 1% to £717m, with growth driven by inflationary rent increases. This was partially offset by a year-on-year reduction in new home sale revenues, down 25% compared with the previous full financial year due to the phasing of the development programme. 

Due to what the landlord described as “disciplined cost control”, operating costs decreased year on year, resulting in a 14% increase in operating surplus before movement in fair value and exceptional items to £115m.

NHG was downgraded to a G3 grade for governance by the English regulator and handed a C3 rating for consumer standards following “serious failings”.

The 67,500-home association is the first G15 landlord to be given a C3 rating. Its financial viability rating remains unchanged at V2.

On NHG’s governance, the Regulator of Social Housing said it had found “insufficient evidence that NHG has an appropriate and robust business-planning, risk and control framework that allows it to adequately manage and address risks”.

The judgement added: “Currently, the delegation of health and safety risks between three different committees is not effectively managed, resulting in the board not having comprehensive assurance on the health and safety of tenants in their homes.”

In its latest accounts update, the percentage of blocks with an in-date fire risk assessment and no overdue actions increased more than 10% to 86.2%.

NHG told the stock market: “Our building safety programme remains on track and within budget, with a focus on the highest-risk buildings and 36.6% of buildings are now complete or with works underway. Twenty-two buildings were completed during the period and work has started on a further 16.”

The number of damp and mould visits completed by the landlord within 10 working days increased more than 8% to 79.9%.

NHG also highlighted that its annual home visit programme reached its highest level yet, with the percentage of homes visited within the past 12 months increasing to 85.7%, up from 77.9%.

The landlord’s dedicated repairs hub has helped increase customer satisfaction with repair work by a couple of percentage points to 81.7%.

It completed its stock condition survey target of 8,500 for the year by 317 homes. At the same time, £116m was spent on day-to-day repairs in 2024-25 and 147,000 repairs were completed.

A further £110m was spent on improvements and refurbishments, including 503 upgraded kitchens and bathrooms.

The landlord did not disclose the amount of new homes it started and completed in the reported period, only that it sold 191 homes, down from 211, and that it remains “on track to deliver a further 986 completions in the year ahead”.

In addition, £118m was invested across the association’s regeneration schemes.

Patrick Franco, chief executive of NHG, said: “We have made good operational and strategic progress in the year, despite the challenging economic and market conditions. The regulatory review outcome was disappointing, but we have responded positively and accelerated the transformation which was already underway.

"Notting Hill Genesis is an organisation undergoing significant change and investment. It will take time to deliver the results our residents expect, but I am confident in our plan and our progress. None of this would be possible without the effort and dedication of our team and I pay tribute to their commitment.”

Earlier this year, Mr Franco told Inside Housing about his plan to transform NHG.