You are viewing 1 of your 1 free articles
Bromford pulls out of two council areas as it narrows focus
West Midlands landlord Bromford has offloaded its housing stock in two council areas and is aiming to sell more properties as part of an ongoing rationalisation strategy.
In a half-year update, the 43,000-home housing association revealed it has ended its presence in Newcastle-under-Lyme and Staffordshire Moorlands after selling 86 homes in the regions.
As part of a four-year strategy, Bromford, which recently completed a merger with Merlin and acquired neighbour Severn Vale, is aiming to focus on four key areas: South Gloucestershire, the Cotswolds, Tewkesbury and Lichfield.
Speaking to Inside Housing, Imran Mubeen, head of treasury at Bromford, said: “We wanted to come out of areas where we have only a limited stock and peripheral involvement.
“It was deemed to be much more efficient and strategically beneficial.”
Mr Mubeen declined to say how many homes it will eventually sell.
READ MORE
It comes as Bromford reported a 7% rise in post-tax surplus to £30m in the six months to the end of September, up from £28m at the same point in 2018. Turnover rose 10% from £124m to £137m.
The group also revealed that its market sales are down against budget in the first half of its financial year. Net margin on this tenure also fell to 15% from 20% in the same period last year.
The association was downgraded to an A2 rating by Moody’s in June and had its outlook changed to negative from stable. The downgrade reflected Bromford’s “increasing market sales exposure”, the agency said.
However, Mr Mubeen said he was confident it would be near its target of market sales by the end of this year.
Of the 497 homes Bromford completed in its half year, 46 were for open market sale. A total of 121 were for social rent, 149 for affordable rent and 181 for shared ownership.
Its turnover from social housing lettings rose 11% from £97m last year to £108m and contributed to 79% of total revenue, the group said. Operating margin on social housing lettings was 35%, down from 41% last year.
In total, Bromford is aiming to deliver 13,100 new homes by 2028. Of these, around 15% are expected to be for open market sale.
The group is looking to cut risk through joint ventures with Homes England and developers. In April it secured a £66m grant with Homes England to deliver around 1,400 new homes.
The association has also launched a £160m tie-up with developers Galliford Try, Lovell, EG Carter and Speller Metcalfe to build around 400 homes a year.
It has also agreed a deal with Taylor Wimpey to developer 455 new homes at a site in Gloucestershire.
Bromford’s total debt at the end of September was £1.6bn, with drawn debt of around £1.2bn.
However, Mr Mubeen said he was comfortable with this position. He said: “We still have very low gearing.
“It’s something we monitor on a monthly basis and every time we go out to market to acquire new funding.”
