You are viewing 1 of your 1 free articles
Large landlord cuts target on shared ownership completions
PA Housing is cutting its development of shared ownership homes to 30% of its overall completions amid continuing uncertainty in the housing market.
In a market update, the 23,000-home landlord said it was taking a “cautious view” on sales activity and would not be relying on profits from the tenure to meet its loan covenants.
In its last full year, PA Housing handed over 104 shared ownership homes, which was 37% of its overall completions. The part-buy, part-rent tenure was 58% of its total completions the year before.
The landlord previously stated that it was cutting its overall target for housebuilding to 5,000 from 6,000, until 2030.
Other large landlords have also announced plans to cut their development targets to focus on improving current stock and boost resident service standards.
READ MORE
Earlier this year, PA Housing came under fire for what the Housing Ombudsman called “unacceptable” failings, which led to its boss being summoned to a meeting.
The landlord was also one of 14 providers that housing secretary Michael Gove wrote to in August as part of a ‘naming and shaming’ exercise.
In its update, PA Housing said improving standards remained its “top focus” and it had carried out an organisational overhaul to “enhance resources within key customer-facing teams and improve service responsiveness”.
The group moved its London and Surrey repairs service, covering two-thirds of its homes, to a new contractor in June.
However, it said some maintenance work was behind schedule due to procurement delays. “We are targeting catch-up through the second half of the year,” the filing said.
“There is a risk that some work will slip into the next financial year, but all Decent Homes and building safety commitments will be met.”
PA Housing, which operates primarily in London, Surrey and the East Midlands, has also faced concerns over the amount it needs to spend on fire safety remediation.
In June, its S&P credit rating was downgraded, while last year the regulator lowered its rating for financial viability to V2 because of the group’s increased fire safety investment.
In its latest update, the landlord said the direction of travel on fire safety remediation was “positive”. The “majority” of costs are now expected to be footed by contractors, following negotiations, with the net cost to the landlord estimated to be £26m.
In the six months up to 30 September, PA Housing reported that its net surplus nearly tripled to £11.6m, as sales had exceeded its budget and operating costs were lower than budgeted.
Turnover rose 15% to £104.1m. The group’s half-year operating margin was 29%, compared with 22% last year.
The group added: “PA faces the next few years from a stable base having successfully navigated the difficult economic headwinds over the past 12 months.
“We will continue our focus on various workstreams to drive up service standards and improve the quality of our homes and estates.”
Sign up for our development and finance newsletter
Already have an account? Click here to manage your newsletters
