Together Housing Group slips into deficit amid bumper year for development

That is triple the 346 new homes completed last year, meaning Together is now 115 homes ahead of where it needs to be to meet its target of 2,500 new homes by 2026.

Turnover for 2023-24 rose to £242.1m, up from £209.5m in 2023. Sales income was £19.9m, up from £13.1m in 2023, largely from sales within its SP Plus Development business.

The landlord sold a record 226 shared ownership homes, generating an income of £17.6m, largely because of development catch-up and in-year completions.

However, operating costs rose to £201.9m, up 15% from £174.9m the previous year. Sales costs rose to £32.7m, up from £17.1m in 2023, mainly from sales within SP Plus Developments, plus an increase in first-tranche homeownership sales.

Together also booked an impairment loss of £6.3m. It said the loss referred to two “general needs high-rise blocks” which had “significant remediation works” identified during the year.

Also, further general needs units were identified for demolition as part of placeshaping works in the Brighouse area.

Interest costs rose to £17.9m, up from £15.3m. Operating surplus fell to £5.3m, down from £24.6m in 2023. At the same time, Together invested £75.6m in refurbishing its existing stock during the year, up from £50.5m in 2023.

It said its strategy was to maintain “minimal cash balances”, drawing funds from its loan facilities only as needed. The level of cash held at year-end was £61m, up from £39.7m in 2023. The Regulator of Social Housing downgraded Together to a V2 financial viability rating in 2022.

The housing association also admitted that it “continued to have challenges” with its capacity to deliver against some service standards, leading to key performance indicators for repair completions, average days to relet and void loss to be below target.

David Procter, chair of Together, said: “The group has the capacity, both financially and operationally, and the financial resilience to survive continuing economic uncertainty.”

He believes the landlord has debt facilities which provide “adequate resources to finance committed reinvestment and development programmes, along with day-to-day operations”.

Mr Procter added that the group had a “long-term business plan” which showed “it is able to service these debt facilities while continuing to comply with lenders’ covenants within 12 months from date of signing and longer term”.

In addition, green-loan funding of £50m from RBS was finalised in April 2024, and the group is in the process of increasing the size of its bank facilities by a further £150m to both “increase available liquidity and offer margin improvements”.