by Kim Pidgeon | Jun 30, 2024 | News
The housing association releases full-year unaudited results
Peabody Group invested £374m into their existing stock during the year, and plan to spend around £2bn over five years.
The not-for-profit housing association, which has 107,000 homes across London and the Home Counties, has released their unaudited results ahead of its Annual Report.
The £374m spend on existing homes includes investing £135m in improving the condition and environmental performance of residents’ homes. Almost 80 percent of which are now EPC C rated following further upgrades. A further £64m on fire safety as remediation work progresses. £175m went on planned maintenance and responsive repairs.
This is the housing association’s second year of trading incorporating Catalyst Housing Limited and its subsidiaries as part of the Peabody Group. It’s the first year of trading following the transfer of engagements of Catalyst Housing Limited into Peabody Trust and Rosebery Housing Association Limited into Town & Country Housing.
Ian McDermott, Peabody chief executive said: “This has been a year of good progress, but we know there is much work to do. We’re transforming our services and investing in homes and sustainable places for the long-term.
“Our local focus and commitment to getting the basics right remains a strategic priority. Our plan is to spend around £2bn over five years – or around £1m a day – on improving and maintaining residents’ homes. This is the right thing to do and will bring material benefits. Over time it will help to reduce the volume of responsive repairs and complaints and improve residents’ satisfaction with our landlord services.
“We also want to support local government in tackling London’s homelessness emergency by providing new social homes where we can. New homes of all tenures are essential infrastructure for the country, and we’ll continue to work with public and private partners on regeneration and new supply. All this activity clearly puts pressure on financial metrics, but we remain determined to use our balance sheet and liquidity as well as exploring new, innovative ways to invest in the things that support our goal of helping people flourish.”
Peabody invested £553m in its new homes programme over the last 12 months, completing 1,381 new homes.
The tenure mix is:
- Social rent: 322
- London Affordable rent: 313
- Affordable rent: 91
- Intermediate Market Rent: 16
- Shared Ownership: 478
- Market Sale: 161
The housing association, which made 1,157 starts on site during the year, says it’s “carefully managing” their development programme, “maintaining appropriate flexibility on the level of future spend and commitments which has limited the extent of expected write downs to around £10m in the period.”
The report states Peabody’s access to liquidity remains very strong with almost £1.3bn of cash and undrawn facilities. In addition they have continued to improve liquidity post year end with an additional £150m in bank facility.
Peabody’s balance sheet remains strong, with fixed assets of over £11bn and gearing at around 40 percent. Their turnover for 2023-24 was £992m. Turnover from core operations increased to £855m, including £774m from social housing lettings.
Overall revenues reduced due to a planned lower level of sales in the year (£130m) plus £7m other development income. A further £30m of contracted sales were anticipated but these have carried over to Q1 2024-25 due to delays on-site. Sales margins in 2023-24 improved to 12 percent, up from 10 percent previously.
Despite the significant cost pressures experienced throughout the year, and a challenging operating environment, Peabody expect their overall operating margin to be at a level similar to last year (23 percent).
Their social housing operating margin will be lower than the prior year, with their low rents below target/regulated levels. The average Peabody rent is now £138 per week and their rent collection for the year was 99.4 percent, improving as the year progressed.
Financing costs, excluding break costs incurred, increased to £170m. This reflects the full year impact of increased interest rates but, as the report states, was within their budget for the year and has allowed Peabody to maintain a healthy level of headroom over their banking covenant, whilst continuing to invest substantially in residents’ homes, in line with their commitment to spend £2bn on existing homes over five years.
In conclusion, the report says the results demonstrate that whilst facing a challenging environment, Peabody is in a strong, financially resilient position to support significant further investment for the long term.
by Kim Pidgeon | Mar 29, 2024 | News
New analysis says Britons pay more for less when it comes to housing
Britain housing stock offers the worst value for money of any advanced economy, according to the Resolution Foundation, who have published their new findings.
The data looked at housing costs, floorspace, quality and price levels to compare nations, finding high costs and low quantity in the UK.
The Foundation’s latest Housing Outlook uses OCED (Organisation for Economic Co-operation and Development) data to compare various housing metrics across advanced economies. The analysis assessed the scale and uniqueness of the UK’s much-discussed housing crisis compared to other similar economies – many with their own housing problems.
The report notes that the share of household income spent on housing is the most common way to assess housing costs but this measure is less useful for international comparisons due to being affected by a country’s share of outright (mortgage-free) owners, who don’t have ongoing housing costs.
For example, Italy (61%), Spain (49%) and the UK (36%) have a far greater share of outright owners than Germany (26%) and the Netherlands (9%).
Therefore to make an international comparison of the actual market cost of housing, the analysis examines what it would cost to rent all homes – incorporating the imputed rents, or what owners would pay if they rented their home at market rates – to show how the market price of housing varies across a range of countries.
It finds that housing represents a greater share of consumption on this basis in the UK than in any other advanced economy bar Finland.
In theory, these high housing costs could reflect the cost of a superior quantity or quality of housing in the UK, but the Foundation reports that is not the reality – people instead pay more and get less.
The report shows that English homes actually have less average floorspace per person (38 m2) than many similar countries, including the US (66 m2), Germany (46 m2), France (43 m2) and even Japan (40 m2).
The findings show English homes even have less floor space, on average, than homes in New York City (43 m2).
Overall Brits get 24% less housing per person than Austrians and 22% less than Canadians, both of whom have similar consumption levels overall.
It’s noted, the UK’s housing stock is also the oldest of any of European countries, with a greater share of homes built before 1946 (38%) than anywhere else. For example, just 21% of homes in Italy, and 11% in Spain, were built before the end of the war.
Older homes tend to be poorly insulated, leading to higher energy bills and a higher risk of damp, remarks the Foundation.
UK households pay 57% more for the same (quality-adjusted) housing as their counterparts in Austria, for example, and 36% more than those in Canada. Housing in New Zealand offers the second worst value for money, followed by Australia and Ireland – all countries also gripped by housing crises.
Adam Corlett, principal economist at the Resolution Foundation, said: “Britain’s housing crisis is likely to be a big topic in the election campaign, as parties debate how to address the problems of high costs, poor quality and low security that face so many households.
“Britain is one of many countries apparently in the midst of a housing crisis, and it can be difficult to separate rhetoric from reality. But by looking at housing costs, floorspace and wider issues of quality, we find that the UK’s expensive, cramped and ageing housing stock offers the worst value for money of any advanced economy.
“Britain’s housing crisis is decades in the making, with successive governments failing to build enough new homes and modernise our existing stock. That now has to change.”
by Kim Pidgeon | Nov 15, 2023 | News
Report shows increase in all types of empty homes since the pandemic
The number of long-term empty homes has increased nationally by nearly 10 per cent since 2018, according to a new report commissioned by the Local Government Association (LGA) and the Empty Homes Network.
The increase – of nearly 60,000 homes since 2018 – is the equivalent of just over one per cent of the country’s housing stock.
The findings, which come at a time of critical housing need, reveal that the numbers across all definitions, types and tenures of empty homes have risen steadily since the pandemic and have largely exceeded the figures seen in 2018.
More than one million properties across England in 2022 were unoccupied, 4.01 per cent of all dwellings.
The rise comes despite the introduction of an empty homes premium in 2013, aimed at encouraging owners to bring empty properties back into use.
The report states many of the empty homes are yet to have reached a stage of deterioration that prompts concern or encourages decline but every empty home removes a property from the housing market.
The rise comes amid the wider background of frozen Local Housing Allowance (LHA) rates, the rising cost of living, the closure of Afghan bridging hotels, wider asylum and resettlement pressures, and an insufficient supply of affordable housing – all driving increases in homelessness and reducing councils’ ability to source suitable accommodation.
The data shows there are currently more than one million people on council housing waiting lists and 104,000 households living in temporary accommodation.
Councillor Darren Rodwell, housing spokesperson for the LGA said: “At a time when we face a chronic housing shortage across the country it is wrong for so many homes to be left empty.
“Councils work hard to address the issue, but the existing measures are clearly falling short. This report, and the best practice proposals and recommendations within it, aim to support councils in their efforts to reduce the numbers of empty homes, increase housing supply, encourage inward investment, and provide a better quality of life for residents and neighbours affected by the issues empty homes cause.
“Councils share a collective national ambition to tackle local housing challenges. The Government should also support this ambition by using the Autumn Statement to implement our six-point action plan so that councils can resume their historic role as a major builder of affordable homes.”
Adam Cliff, secretary and policy lead for the Empty Homes Network, said: “Empty Homes are a hugely wasted resource, and at over one million empty homes nationally, this figure represents the equivalent to the number of total dwellings in the city of Manchester.
“At a time where the demand for housing is so high, working to bring empty homes back into use can not only support meeting this need, but can encourage inward investment, improve communities and enhance the lives of those who currently live near empty homes.
“This report aims to set a standard from which councils can build a solid foundation to deal with empty homes, and provides practical and evidence based ideas which will undoubtedly prove useful to councils and their officers.
“While the numbers across all empty homes categories have shown an increase over the past five years, the report aims to address this by equipping councils and officers with tools to assist in data cleansing, case progression and the overarching empty homes journey through the case progression flowchart.”
Empty homes are divided into five categories: less than six months empty, long-term empty, empty homes premium, second homes and unoccupied. By definition, an empty home is one that has no permanent occupier or can be defined as a property where the main resident lives elsewhere.
As a standard practice, empty homes that have remained unoccupied for over six months from the moment of being informed by the owner are labelled as long-term empty.
Given their category, these are the most likely to warrant concern and/or investigation by the council.
