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LiveWest seeing 75 applicants for every rental as second-home flipping drives shortage
South West England’s largest housing association is seeing around 75 applicants for every rental that becomes available, with the overall shortage exacerbated by second homes being converted to holiday lets.
LiveWest, which operates 39,000 homes across South West England, has warned that it is seeing the sharp end of a sector-wider shortage of housing supply as demand soars.
Writing in the group’s annual report, LiveWest’s chief executive Paul Crawford and chair Linda Nash said: “We are seeing over 75 applicants for every property that becomes available for rent.
“This desperate shortage of housing has been worsened by private market rent volumes reducing as owners convert to holiday lets in the South West, making our social strategy to invest sustainably and deliver a long-term programme of new homes even more important.”
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The issue of second homes in coastal towns and cities has intensified as owners have looked to take advantage of the surge in domestic holidays during the pandemic.
Around 4,000 second homes in the South West have been flipped to holiday lets since the pandemic, according to latest figures.
The warning from LiveWest came as it announced that it missed its affordable homes development target for the year. The landlord, which has homes stretching from Cornwall to Gloucestershire, had aimed to hand over 1,100 homes in the year to the end of March 2022 but completed only 800 affordable homes. This included 272 homes for social rent, 270 for affordable rent and 258 for shared ownership.
“The development programme continued to be impacted by COVID-19 and material and labour shortages which resulted in significant handover delays,” Mr Crawford and Ms Nash said.
In addition it completed 111 market sale homes, bringing its total completions to 911 – a 16% rise on the previous COVID-hit year.
Looking ahead, LiveWest said it expects completions to be “significantly higher” in the current financial year. Over the next five years it aims to build 7,000 homes across all tenures.
The group saw its social housing lettings operating margin drop to 25.7%, compared to 30.3% the previous year.
The 25.7% figure is the lowest for LiveWest since 2015 or earlier. The group blamed the fall on “increased property maintenance, building safety and energy efficiency spend” on homes.
Social housing lettings accounted for 71% of turnover.
However it said it anticipated that its social housing margin will improve to 27% in the current year with “further increases in future years”.
LiveWest’s overall operating margin in its last year was 23%, down from the 25% the prior year.
Despite the hit to its margins, the group posted a 15% rise in post-tax surplus to £52.7m, driven by higher shared ownership and open market sales and a reduction in its interest costs.
Turnover rose 11% to £270.8m.
Revenue from social housing lettings rose £6m to £192m, while income from shared ownership and market sales increased 36% to £79m, helped by what LiveWest called a “buoyant property market”.
As of 31 March 2022, the group had £946m in drawn debt, up from £936m the year before, and £402m in undrawn facilities, compared to £426m the prior year.
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