You are viewing 1 of your 1 free articles
Places for People sees affordable housing development grow by 72% as it cuts private sale exposure
Giant landlord Places for People has revealed a 72% jump in the amount of affordable housing it built in its last financial year as it cuts its exposure to the private sale market.
The 209,000-home landlord built 1,466 new affordable homes in the year to 31 March 2020, which was 615 more than the prior year.
In total, the national group built and acquired 2,680 new homes over the 12 months.
In the landlord’s annual report, chief executive David Cowans said it had shifted the “balance of our new build programme in favour of rental homes to reduce our exposure to the housing for sale market”.
He added: “We have also increased the volume and proportion of new affordable housing we develop as part of our partnership with Homes England.”
The group was chosen as a strategic partner by Homes England in 2018 to deliver 2,603 affordable homes by 2024.
Many landlords, particularly in London and the South East, have reported problems selling homes for private sale partly due to Brexit uncertainty.
READ MORE
The coronavirus pandemic is also expected to take its toll on private sales. In July, Moody’s warned that exposure to the private property market will be the most significant area of risk for housing associations in the current financial year.
The COVID-19 crisis is also expected to hit Places for People’s affordable housing delivery in the current year. Its annual report said: “In the last month of our financial year, our affordable housing delivery was significantly impacted by the coronavirus crisis, which is likely to impact our 2020/21 targets.”
It came as Places for People reported a 4.5% drop in pre-tax surplus from £95.5m the previous financial year to £91.2m in 2019/20.
Meanwhile the landlord reported a 2.6% drop in its operating margin to 25%, which it said was “due to higher proportion of development for sale activity”.
The association’s turnover hit £866.7m, up from £827.1m, which it partly attributed to a rise in social housing lettings income. The group manages around 71,000 social and affordable rented homes.
The number of properties Places for People operates rose from 197,000 in the previous year to 209,000, which is largely down to the group taking on management of properties owned by for-profit provider Sage Housing.
Places for People also revealed that it netted 44.7% of its income from affordable housing and 22.2% from its development activity.
The group started 1,982 homes in the financial year, of which 1,329 were affordable.
On fire safety, Places for People highlighted that it has pledged to install sprinklers in all its blocks above six storeys. Its annual report confirmed it has installed “fire suppression systems” in 10 of its high rises, which accounts for 566 residents.
A further 953 residents will get the systems installed over the next 18 months, but it did not disclose how many blocks this covers.
The landlord said it is “continuing to review external cladding” systems on its homes to ensure they are safe, but did not offer more detail.
Places for People’s cash reserves grew from £562.4m to £662m over the year.
Meanwhile its debt rose to £3.9bn, of which £2.9bn is drawn, an increase of £0.3bn on the prior year.
