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G15 landlord spends £22m buying back homes on development evacuated over safety issues
A G15 member has spent more than £20m buying back leaseholder properties on a development it was forced to evacuate late last year due to fire safety issues.
In its unaudited accounts for 2020/21, Notting Hill Genesis (NHG) said it has purchased 73 of the 105 homes on the Paragon Estate in west London, which was evacuated in October last year after an intrusive survey identified several building safety concerns.
NHG evacuated roughly 1,000 residents, including students living in student accommodation, while further investigative work was undertaken.
It said this investigative work, which will “establish the full extent of any required structural and fire safety works”, is not yet complete and in the meantime NHG has offered to buy back the homes of leaseholders, including shared owners.
In its accounts, NHG also estimated that the total cost of post-Grenfell fire remediation work on the buildings it owns will cost around £230m.
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NHG expects to recover some of this from the government’s Building Safety Fund, the National House Building Council and leaseholders, leaving a likely net cost of £173m, which has been included in the housing association’s business plans.
The update said: “Following the events at Grenfell Tower and in response to subsequent guidance and legislation, we have comprehensively assessed potential risks in our buildings. We have initially focused on buildings that are over 18m high, as well as more recently completed buildings where we may still have a claim against contractors. Most contractors have been positively engaged in rectifying any faults related to them.”
Last week the Regulator of Social Housing published a report that showed social landlords have increased repairs and maintenance spend by 15% in response to the building safety crisis.
Large London-based landlords like NHG have been especially hit, with some increasing fire safety spending by over 50% in the past year.
NHG’s unaudited accounts show that it has continued to reduce spending on development for the third year in a row.
When Notting Hill merged with Genesis in 2018 it set out plans to build 2,800 homes a year, however the landlord was forced to scale back its development plans after a housing market slowdown led to an increasing number of unsold homes on its books.
Development spend by NHG has fallen 49% from £654m in 2018/19 to £335m in 2020/21 and the organisation is now aiming to develop 1,400 homes a year.
Its development plans include a stronger focus on affordable rent tenures with a reduction in the share of private sale or shared ownership homes it aims to deliver.
As of 1 April this year NHG still had 548 unsold homes, compared to 605 at the end of 2019/20.
Update: at 09.33am, 19.05.21 This article has been changed to state that NHG has 548 unsold homes in April this year. The article originally stated the number was 610.
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