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High level of staircasing adds £20m to G15 landlord’s budgeted surplus
A higher-than-expected level of staircasing has pushed Notting Hill Genesis’ (NHG) net surplus for the past financial year to more than £102m.
The G15 landlord’s latest annual report, which was published this month after a delay, shows it had budgeted for a surplus of £82.7m in 2021-22, but demand for staircasing meant NHG ended the year with an actual surplus of £102.3m.
Staircasing is the process where shared owners exercise the right to buy a larger stake in their shared ownership home.
Despite the uptick in this process, the 67-000 home association’s turnover was lower than in 2020-21, which it said was mainly due to smaller sales revenues.
Turnover fell more than £72m compared with 2020-21 to £836.9m as sales revenues dropped nearly £80m to £253.2m. Turnover from social housing lettings totalled £486.6m.
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Throughout the financial year, NHG started 1,385 homes and completed a similar number of 1,346.
The association noted that it had entered the financial year with a total of 548 unsold homes and completed an additional 387 properties for sale.
Of these, its accounts explained that it took a strategic decision to transfer 76 homes to various rental tenure types, as well as transfer 15 units between sales types.
This is alongside the sale of 424 homes to individual purchasers and the disposal of 160 units in a bulk sale, which meant the landlord ended the year with 275 unsold properties.
In addition, more than 153,000 repairs were raised with NHG throughout the financial year. The accounts showed that satisfaction with repairs was just under 85%.
As in previous years, the landlord said its surplus will be used to invest in its existing homes as well as continuing its programme to build more new homes across London.
The surplus will also contribute to the £173m provided for in its strategic plan to address building safety issues.
In his conclusion to the association’s financial performance, chief financial officer Yomi Okunola described the year as one of “reducing risk at NHG”.
He said: “In 2018, we decided to reduce the amount of money spent on new housing because we found that the housing market in London was not buoyant enough to absorb the number of private and shared ownership homes being completed by NHG.”
He explained that the amount spent on new housing has reduced since 2018-19 as a result from £654m to £315m in the past financial year.
Mr Okunola told Inside Housing: “Once again, our annual results show NHG to be a financially sound organisation with substantial liquidity. This is of particular relevance given rising costs across the board and increased pressure on our residents.
“I hope that the results give our residents, investors and other stakeholders confidence in our ability to withstand challenges within the housing sector, but also to continue to deliver homes for a range of needs across London and surrounding areas.”
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