Large national landlord bucks trend with 17% rise in completions

In its latest year, Home Group handed over 760 properties for affordable and social rent, 156 shared ownership homes, 136 for outright sale, and 232 through joint ventures.

The group said it worked “closely” with contractors and its partners to deliver projects on time, but “construction costs continue to create challenges for new schemes”.

Despite this, Home Group still spent £149m on improving homes in its 2023-24 financial year, but this was down on the previous year’s figure of £152m.

Operating costs rose by 5%, which Home Group said was partly due to “unprecedented volume for responsive repairs and maintenance jobs”.

The landlord has been on a recruitment drive to boost its customer service. In June, it appointed a new customer experience director, and the month before announced the appointment of five new regional directors.

Writing in the group’s annual report, John Cridland, chairman of Home Group, also revealed it had reported its tenant satisfaction measures (TSMs) to the regulator. He admitted there was “plenty of room for improvement”, despite the TSMs being “relatively pleasing”.

Overall, Home Group’s post-tax surplus fell 5%, to £23.5m, in its last full year, as higher interest rates added to its finance costs.

Turnover rose by 9% to £493.2m, driven by rent rises and taking on more homes.

A 20% drop in the number of homes sold (to 466) was blamed on the group having fewer units available to sell.

The group’s overall operating margin was 12.7%, which was down on its target, but up from 10.7% the year before.

Helen Meehan, chief financial officer of Home Group, said the business environment had remained “challenging” in the year.

“High interest rates and inflation have maintained pressure on finances, along with an unprecedented demand for our responsive repair and maintenance services,” she said.

However, she added there were “promising signs of recovery” and Home Group’s surplus was ahead of target.

As of March 2024, the group reported net debt of £1.2bn, of which £314m is undrawn.

Home Group currently has a G1/V2 rating with the English regulator. It was downgraded to V2 in late 2022, among a wave of landlords, due to economic conditions.

Last week, Home Group retained its A- credit rating and stable outlook with S&P.

The credit rating agency said the landlord’s decision to “de-risk its development program”, an expected improvement in economic conditions and its ability to “secure grant funding for investments in new and existing homes would support the projected recovery in the group’s financial indicators”.