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Midlands housing association sees major repairs spend grow by more than 50% per property
East Midlands landlord EMH Group has reported an increase in its maintenance spending, with major repairs costs rising by 51.7% per property.
The landlord’s latest annual report, covering the period to 31 March 2024, revealed a further 5.7% increase in responsive maintenance costs.
EMH said this was “as expected” and added it was undertaking a stock condition review programme to help it come up with “a more detailed and precise programme of works alongside the Energy Performance Certificate [Band] C programme”.
Overall, the landlord reported a 16% increase on its social housing cost per unit, which reached £4,173.
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EMH said it sees this increase “as a positive outcome with the investment in maintenance and major repairs, including decarbonisation works, being evident”.
It noted that it had also seen increased costs for void properties, including larger, non-capital works. “Work is under way to establish causes of this and mitigate where possible.”
Service charges increased by 11% during the year.
EMH missed its development target for the year of 500 homes, building 388 new units compared to 466 last year.
It also developed nine properties for market sale and seven properties were remodelled for temporary accommodation.
It said the slowdown in development was “common in the sector as schemes are held in planning, contractors become less viable and competition for land increases”.
In 2021-22, the housing association built just 60% of its 550-home target for the year, blaming ongoing impacts of the pandemic and the Ukraine crisis for delayed starts.
The 22,000-home landlord said in its most recent report that it had “a strong pipeline of schemes”, with 1,090 new homes on site.
It said it is “well into the second phase” of its strategic partnership with Homes England, and has been awarded a further £112m to develop 1,450 homes.
EMH also reported a higher operating surplus for the year of £34.5m, up from £31.4m in 2022-23, with a slightly lower operating margin of 23%.
Despite the increased surplus, “the operating margin is in line with our 2023 margin as we have seen both income and costs rise proportionately as a group”, EMH said.
The operating surplus on its social housing lettings activities was £28.2m, £6m higher, while the surplus on other social housing activities was 33% lower at £3.7m.
This was because sales overall were “at a slightly lower margin”, the landlord explained.
EMH added that it was finding “continued low margins” associated with its care and support activities, and described this part of the business as “the most fragile”. It posted a £130,000 deficit for this segment, of which £103,000 was due to pension adjustments.
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