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South West landlord increases development pipeline as affordable handovers drop 25%
The largest housing association in South West England has reported a 25% drop-off in completions for the six months up to the end of September.
LiveWest, which operates 39,000 homes across South West England, handed over 295 affordable homes, down from 398 during the comparable period in 2022.
Its latest trading update also showed an increase in its development pipeline, up to 2,294 affordable homes from 2,006 in March 2023.
An unaudited group turnover of £150m for the reporting period was similar to 2022, with higher rental and social income of £12m being offset by lower sales receipts from current assets of £13m.
LiveWest said: “While we are experiencing a more challenging sales market, we remain confident that we will meet our profit targets.
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“Operating costs are £3m lower in the period. We have incurred slightly higher maintenance costs of £2m, which offsets lower cost of sales for shared ownership and open market home sales.”
The association said this had resulted in a small increase in its operating margin to 25%, with a slightly reduced surplus of £24m.
This reduction was primarily due to a lower surplus on disposal of housing fixed assets and increased interest costs.
Sales of open market and shared ownership homes totalled 182, down from 213 in 2022.
LiveWest maintained that its sales and margins on housing sales continue to perform well despite the challenging market. However, the landlord said it is “monitoring the impact of increased mortgage rates”.
In its annual report in August last year, the association said it was seeing around 75 applicants for every rental that becomes available, with the overall shortage exacerbated by second homes being converted to holiday lets.
The issue of second homes in coastal towns and cities has intensified as owners looked to take advantage of the surge in domestic holidays during the pandemic.
Recent estimates suggested that around 4,000 second homes in the South West have been flipped to holiday lets since the pandemic.
Research by Generation Rent in June warned that the recent growth in holiday lets and second homes is nearly cancelling out the supply of new homes in some parts of the country.
The research found that 80% of the growth in holiday homes during and since the coronavirus pandemic was concentrated in just 25 local authorities.
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