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Special report: development sales income jumps 10% in a year

Insight09 Apr 2020Chloe Stothart and Gavriel Hollander

Despite a 10 per cent rise in housing associations’ income from development sales in the last financial year, sales revenue is likely to remain flat over the coming years as a result of the property market downturn. Chloe Stothart and Gavriel Hollander report

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Despite a 10 per cent rise in housing associations’ income from development sales in the last financial year, sales revenue is likely to remain flat over the coming years as a result of the property market downturn #ukhousing #socialhousingfinance

Special report: development sales income jumps 10% in a year #ukhousing #socialhousingfinance

Housing associations’ income from development sales jumped 10 per cent in the last financial year, driven in large part by a significant uplift in proceeds from first tranche shared ownership sales.

However, a number of factors are likely to keep sales revenue flat, at least in the coming years. These include the continuing downturn in the London and South East property market, housing associations’ increased spend on repairs and maintenance as a result of the fire safety and zero-carbon agendas, and the uncertainty in the markets caused by the coronavirus crisis.

Summary of first tranche and non-social housing development sales-related income, 2018/19

	First tranche sales		Non-social housing development		Total development sales income		Development activities as a share of total turnover
	Income, £m	Change on year	Income, £m	Change on year	Income, £m	Change on year	2018/19	2017/18
89 housing associations above £4m	1,322.2	16%	1,393.3	5%	2,715.4	10%	17%	16%
79 housing associations below £4m	114.1	16%	12.6	-48%	126.7	3%	3%	3%
Total	1,436.2	16%	1,405.9	4%	2,842.2	10%	14%	13%

Richard Donnell, research and insight director at Zoopla, said the slowdown in the residential property market in London and the South East in particular means that, for now, the majority of the increase in sales activity would likely come through shared ownership.

“Over the past four years the value of transactions in London and the South East has fallen back,” he said. “Smaller associations in particular have reduced their risk appetite.”

Mr Donnell added that the major decrease in non-social housing sales among those associations with less than £4m total sales income could be fuelled by them moving some outright sale units to shared ownership in an effort to de-risk.

“I wouldn’t be surprised if there was some transfer involved in that [number],” he said. “It’s all about sales risk. As soon as you get into the private sales market it’s a different dynamic. You really have to compete with the house builders and it takes you further up the risk curve. Given transaction volumes in London and the South East are down 10 to 20 per cent in the past three to four years and prices have flatlined, it was not a surprise that [housing associations] have slowed down or shifted.”

Summary of first tranche and non-social housing development sales-related surplus, 2018/19

	First tranche sales			Non-social housing sales			Total development sales income
	Surplus, £m	2018/19 margin	2017/18 margin	Surplus, £m	2017/18 margin	2016/17 margin	Surplus, £m	2018/19 margin	2017/18 margin
89 housing associations above £4m	332.5	25%	29%	146.3	11%	19%	478.9	18%	24%
79 housing associations below £4m	33.2	29%	29%	1.9	15%	21%	35.1	28%	27%
Total	365.8	25%	29%	148.2	11%	19%	514	18%	24%

We also tracked surplus generated by the 168 associations in the study. Overall margins on both first tranche shared ownership and open market sales were down for all sizes of association.

In 2018/19, the 168 associations we analysed produced an 18 per cent margin on £514m of total surplus. That compares to a 24 per cent margin in 2017/18. On outright sale alone, total surplus was £148.2m, generating a margin of 11 per cent, down from 19 per cent in the previous year. First tranche sales held up slightly better on this basis, with the £365.8m surplus generating a 25 per cent margin, down from 29 per cent in 2017/18.

The associations with smaller overall development income (under £4m) performed better than those with larger development income in terms of surplus. Overall, they produced a margin of 28 per cent on all sales, compared with 18 per cent for their larger peers. On outright sale, the smaller cohort managed a margin of 15 per cent compared with 11 per cent for the larger providers. Margins were broadly similar on first tranche sales: 29 per cent for the under £4m group and 25 per cent for those over £4m.

Margin on HAs’ first tranche income: top 30 (2018/19)

	First tranche 2018/19			First tranche 2017/18
Registered provider	Income, £m	Surplus, £m	2018/19 margin	Income, £m	Surplus, £m	2017/18 margin
Saffron Housing Trust	0.1	0.2	172%	0.3	0.1	19%
Poplar Harca	1.5	1.0	68%	3.2	2.1	68%
North Devon Homes	0.2	0.1	59%	0.0	0.0	n/a
Hundred Houses Society	0.9	0.5	58%	2.1	1.1	51%
Ongo	0.3	0.2	57%	0.0	0.0	n/a
Leeds & Yorkshire HA	0.8	0.4	54%	0.7	0.4	53%
Johnnie Johnson Housing	0.1	0.0	53%	0.9	0.5	48%
Housing Solutions	6.3	3.3	52%	5.0	2.6	52%
BPHA	25.8	12.8	50%	21.4	11.8	55%
Gateway HA	1.2	0.6	49%	0.8	0.5	59%
Castles & Coasts HA	0.8	0.4	48%	0.6	0.2	31%
United Communities	1.3	0.6	47%	0.7	0.4	60%
Bernicia Homes	0.4	0.2	46%	1.1	0.2	16%
Leeds Federated	4.4	2.0	45%	2.3	1.2	53%
Trent & Dove Housing	2.5	1.1	45%	1.3	0.6	48%
Freebridge Community Housing	0.8	0.3	44%	0.1	0.0	28%
Solon South West HA	1.0	0.4	44%	0.0	0.0	n/a
Flagship Homes	7.1	3.1	44%	74.0	0.8	1%
Broadacres	4.6	2.0	43%	1.7	0.8	47%
NSAH (Alliance Homes)	3.1	1.3	43%	2.2	-0.1	-5%
Newlon Housing Trust	4.7	2.0	43%	2.7	1.2	43%
Aspire	5.9	2.5	42%	3.6	1.5	42%
Thrive Homes	2.3	1.0	42%	1.2	0.5	42%
Cross Keys Homes	14.0	5.9	42%	16.0	5.8	36%
Selwood Housing	6.5	2.7	42%	4.3	1.4	33%
Suffolk Housing	0.4	0.2	42%	0.9	0.5	56%
The ExtraCare Charitable Trust	17.5	7.1	41%	14.8	4.4	30%
Beyond Housing	0.2	0.1	41%	1.1	0.5	50%
Howard Cottage HA	3.1	1.3	41%	0.6	0.3	58%
Islington & Shoreditch HA	2.9	1.1	40%	1.9	1.1	57%

As reported in Social Housing in February, the total sales-related surplus of the 150 housing associations with the largest turnovers in England fell by 10 per cent in 2018/19, from £1.47bn to £1.33bn. This decline was driven in particular by a 42 per cent fall in surplus from outright sale of non-social housing units. These generated £147.9m in 2018/19 compared with £255m the previous year.

Individual performance

The number of associations pulling in at least £100m in total development income grew from five to six between 2017/18 and 2018/19, with London-based providers still dominating the table. Indeed, of the top 10 in our table (see page 27), seven are members of the G15 group of London’s largest associations.

However, Places for People moved to the top of the list, having placed third in 2017/18. It brought in total sales income of £192.1m, 18 per cent up on its previous year’s haul of £163.3m. The vast majority of that income (£186.9m) came from outright sale.

Margin on HAs’ non-social housing development activity: top 30 (2018/19)

	Non-social housing development sales, 2018/19			Non-social housing development sales, 2017/18
Registered provider	Income, £m	Surplus, £m	Margin, 2018/19	Income, £m	Surplus, £m	Margin, 2017/18
Southern Housing	35.41	16.96	48%	7.1	2.1	30%
The Abbeyfield Society	3.91	1.40	36%	2.2	0.6	27%
Radian	10.90	3.47	32%	15.1	2.5	17%
Citizen	4.92	1.44	29%	4.1	0.8	20%
Sanctuary *	11.70	3.40	29%	8.3	2.2	27%
Acis	0.16	0.05	28%	2.6	0.5	18%
Peabody	90.00	22.00	24%	135.1	35.5	26%
Yorkshire Housing	5.94	1.45	24%	0.0	0.0	n/a
Vivid	46.65	10.64	23%	26.1	5.0	19%
Town & Country Housing	6.85	1.53	22%	0.0	-0.1	-538%
Flagship Homes	5.28	1.18	22%	0.6	0.0	0%
Anchor Hanover	53.55	11.59	22%	61.2	11.9	20%
Broadacres	5.19	1.11	21%	12.3	1.6	13%
Broadland	1.52	0.30	20%	0.0	0.0	n/a
Sovereign	20.03	3.94	20%	16.1	4.2	26%
Catalyst	32.69	6.42	20%	60.4	17.6	29%
Home Group	33.27	6.49	20%	20.6	3.8	18%
Curo Group (Albion)	18.08	3.42	19%	22.8	4.7	21%
Octavia Housing	8.55	1.61	19%	7.5	0.0	0%
LiveWest	29.12	5.45	19%	28.5	5.4	19%
Together Housing	0.19	0.03	18%	8.6	2.3	26%
Orbit	43.50	7.80	18%	55.6	9.4	17%
Great Places Housing Group	4.07	0.72	18%	2.2	0.5	24%
Hyde	118.96	19.59	16%	25.9	1.0	4%
Bromford	5.83	0.96	16%	0.004	-0.5	-11,700%
Beyond Housing	0.56	0.09	16%	0.2	0.1	24%
Notting Hill Genesis	91.40	14.00	15%	121.4	30.4	25%
Castles & Coasts	1.00	0.15	15%	0.3	0.1	48%
Paradigm	2.70	0.40	15%	14.49	5.071	35%
Metropolitan Thames Valley ***	23.9	3.5	15%	0	0	n/a

Notes: * EU IFRS, 0 either no income in 2018 or sales income was not stated; *** No 2018 data available due to merger

L&Q, which topped last year’s table with £200m of total sales, moved down to second, having seen income from sales drop seven per cent to £186m. The landlord is likely to see that figure drop again in the coming years, having revealed last summer that it was upping spend on existing homes at the expense, in part, of its market sale programme.

A number of the other biggest associations are also likely to scale back for-sale development in light of the London-focused slowdown. Ratings agency Standard & Poor’s (S&P) downgraded the credit ratings of The Guinness Partnership and Notting Hill Genesis (NHG) over the course of the past year, as well as that of L&Q. In each case, however, the agency said that the landlord had reduced its respective risk exposure, having cut back on development plans.

Karin Erlander, director and lead analyst in S&P’s international public finance team, told Social Housing that 25 of the 41 associations rated by the agency “have quite large development programmes for sale”, with nine generating between a third and half of their revenue from sale, and one generating more than 50 per cent.

The two newest members of the £100m-plus club were Hyde and A2Dominion, with Orbit dropping down the list after seeing total development income fall from £128.8m to £78.8m.

Hyde posted the biggest increase of all associations. Its total development income grew to £175.7m – a 133 per cent rise from £75.3m in 2017/18. The majority of that increase came from its non-social housing outright sales, income from which more than quadrupled from £25.9m to £119m.

Guy Slocombe, chief investment officer at Hyde, said the downturn in the market in London in 2019 would not impact the landlord’s cross-subsidy strategy. He said income from sales would “probably be a bit down” in 2019/20 but that was because of “fluctuations in our development programme” rather than difficulties in selling. Hyde has just 49 unsold homes out of around 1,300 developed for sale in the financial year, he said.

“Hyde has no intention of scaling back its development programme,” Mr Slocombe told Social Housing. “I know some in the sector have suggested that the cross-subsidy model is broken. I fundamentally disagree. If you know your market, then private sale works.”

HAs’ first tranche and non-social housing development activities: income above £4m, 2018/19

	Total turnover		First tranche sales		Non-social housing development sales		Total development-related activity		Development activities, share of total turnover
Total	15,858	3%	1,322.2	16%	1,393.3	5%	2,715.437	10%	17%	16%
Registered provider	Income, £m	Change on year	Income, £m	Change on year	Income, £m	Change on year	Income,£m	Change on year	2018/19	2017/18
Places for People	827	10%	5.2	-10%	186.9	19%	192.1	18%	23%	22%
L&Q	937	-9%	69.0	-14%	117.0	-3%	186.0	-7%	20%	19%
Hyde	450	33%	56.8	15%	119.0	359%	175.7	133%	39%	22%
Notting Hill Genesis	671	-4%	43.5	14%	91.4	-25%	134.9	-16%	20%	23%
Peabody	565	-7%	42.0	-15%	90.0	-33%	132.0	-28%	23%	30%
A2Dominion	372	24%	13.2	13%	99.3	116%	112.5	95%	30%	19%
Clarion	816	-2%	57.1	4%	37.1	-12%	94.2	-3%	12%	12%
Metropolitan Thames Valley ***	411	-1%	59.7	n/a	23.9	n/a	83.6	n/a	20%	0%
Orbit	316	-11%	35.3	-52%	43.5	-22%	78.8	-39%	25%	36%
Sovereign	402	6%	55.2	45%	20.0	24%	75.2	39%	19%	14%
Vivid	250	9%	25.5	-4%	46.6	79%	72.2	37%	29%	23%
Southern Housing Group	230	15%	24.9	-10%	35.4	396%	60.3	73%	26%	17%
One Housing Group	213	-1%	24.8	-31%	32.0	6%	56.7	-14%	27%	30%
Anchor Hanover	526	-1%	1.1	-31%	53.6	-12%	54.7	-13%	10%	12%
Bromford	257	16%	48.1	87%	5.8	145,650%	54.0	109%	21%	12%
Home Group	367	1%	20.2	40%	33.3	62%	53.5	53%	15%	10%
Platform Housing Group	274	12%	30.2	31%	21.9	327%	52.1	85%	19%	12%
Riverside	364	5%	13.3	81%	38.8	6%	52.1	18%	14%	13%
LiveWest	233	1%	21.6	-5%	29.1	2%	50.7	-1%	22%	22%
Catalyst	180	-16%	17.9	-24%	32.7	-46%	50.6	-40%	28%	39%
Gentoo	177	-3%	0.7	n/a	44.8	15%	45.6	17%	26%	21%
Aster	212	4%	42.2	16%	2.2	136%	44.4	19%	21%	18%
Longhurst	167	15%	20.1	49%	24.0	31%	44.1	39%	26%	22%
Radian	168	4%	24.6	29%	10.9	-28%	35.5	4%	21%	21%
Paradigm	130	5%	31.7	75%	2.7	-81%	34.4	6%	26%	26%
Midland Heart	219	13%	9.9	66%	19.7	1,040%	29.6	285%	14%	4%
Optivo	314	-1%	28.7	32%	0.0	-100%	28.7	-17%	9%	11%
Moat Homes	130	5%	28.5	14%	0.0	n/a	28.5	13.67%	22%	20%
Network Homes	275	17%	23.4	186%	3.9	-92%	27.4	-53%	10%	25%
BPHA	125	6%	25.8	21%	0.0	n/a	25.8	21%	21%	18%
Sanctuary *	735	4%	13.7	63%	11.7	41%	25.4	52%	3%	2%
Curo (Albion)	93	-6%	3.7	-17%	18.1	-21%	21.8	-20%	23%	28%
Stonewater	191	2%	20.7	1%	0.0	n/a	20.7	1%	11%	11%
Hightown	85	22%	20.7	97%	0.0	n/a	20.7	97%	24%	15%
Aldwyck Housing (Catalyst)	96	21%	2.7	-34%	16.6	172%	19.3	90%	20%	13%
The ExtraCare Charitable Trust	123	31%	17.5	18%	0.0	n/a	17.5	18%	14%	16%
Wandle	69	3%	15.5	-5%	0.0	n/a	15.5	-5%	23%	25%
Great Places Housing Group	109	8%	11.0	44%	4.1	84%	15.0	53%	14%	10%
The Guinness Partnership	361	-4%	14.6	342%	0.2	-99%	14.8	-34%	4%	6%
Cross Keys Homes	73	1%	14.0	-12%	0.0	n/a	14.0	-12%	19%	22%
Octavia Housing	59	-12%	4.2	34%	8.6	14%	12.7	20%	22%	16%
Flagship Homes	156	16%	7.1	-90%	5.3	802%	12.4	-83%	8%	56%
CHP	65	-15%	9.4	25%	2.8	-85%	12.2	-53%	19%	34%
Settle	68	-13%	6.5	42%	5.5	-68%	12.0	-44%	18%	28%
PA Housing	160	-3%	11.2	-27%	0.6	-82%	11.8	-37%	7%	11%
Torus62	194	2%	11.2	44%	0.0	n/a	11.2	44%	6%	4%
Thirteen	180	13%	10.6	433%	0.0	n/a	10.6	433%	6%	1%
Yarlington	64	13%	10.5	193%	0.0	n/a	10.5	193%	16%	6%
Golding Homes	51	11%	8.2	90%	2.1	26%	10.3	72%	20%	13%
Grand Union	74	1%	10.3	-6%	0.0	n/a	10.3	-6%	14%	15%
GreenSquare Group	81	-3%	6.5	36%	3.6	-62%	10.1	-29%	12%	17%
Town & Country Housing	65	8%	3.2	-39%	6.9	32,524%	10.1	90%	16%	9%
Soha Housing	49	7%	9.9	43%	0.0	-100%	9.9	29%	20%	17%
Broadacres	44	-8%	4.6	170%	5.2	-58%	9.8	-30%	22%	29%
WHG	109	3%	9.6	39%	0.0	n/a	9.6	39%	9%	7%
Citizen	154	3%	4.2	460%	4.9	20%	9.1	88%	6%	3%
Hexagon	42	24%	5.1	88%	4.0	n/a	9.0	236%	22%	8%
Swan	81	-11%	0.1	-92%	8.8	-58%	8.9	-61%	11%	25%
Trafford Housing Trust	57	-11%	2.3	54%	5.7	-58%	8.0	-47%	14%	24%
Advance Housing and Support	38	11%	7.9	93%	0.0	n/a	7.9	93%	21%	12%
Wakefield and District Housing	156	0%	7.8	36%	0.0	n/a	7.8	36%	5%	4%
B3 Living	35	25%	7.8	306%	0.0	n/a	7.8	306%	22%	7%
Knowsley Housing Trust	68	11%	7.5	7,316%	0.0	n/a	7.5	7,316%	11%	0%
MHS Homes	61	16%	7.3	165%	0.0	n/a	7.3	165%	12%	5%
Nottingham Community HA	77	3%	6.5	9%	0.0	n/a	6.5	9%	8%	8%
Selwood Housing	42	8%	6.5	49%	0.0	n/a	6.5	49%	16%	11%
Housing Solutions	46	6%	6.3	28%	0.0	n/a	6.3	28%	14%	11%
Silva (Bracknell Forest Homes)	45	6%	6.3	39%	0.0	n/a	6.3	39%	14%	11%
Yorkshire Housing	113	12%	0.0	-100%	5.9	n/a	5.9	68%	5%	4%
Connexus	60	7%	1.6	-33%	4.3	n/a	5.9	145%	10%	4%
Aspire	53	7%	5.9	61%	0.0	n/a	5.9	61%	11%	7%
CHS Group	33	5%	3.7	116%	2.1	-23%	5.9	30%	18%	15%
Wythenshawe Community Housing	68	2%	5.7	84%	0.0	n/a	5.7	84%	8%	5%
Estuary Housing	40	6%	5.3	82%	0.0	n/a	5.3	82%	13%	8%
Greenfields Community Housing	48	1%	5.1	-7%	0.0	n/a	5.1	-7%	11%	12%
Ocean Housing	39	9%	5.0	84%	0.0	n/a	5.0	84%	13%	8%
Vale of Aylesbury Housing	50	10%	4.9	387%	0.0	n/a	4.9	387%	10%	2%
Plymouth Community Homes	80	16%	4.8	225%	0.0	n/a	4.8	225%	6%	2%
West Kent HA	53	5%	4.7	28%	0.0	n/a	4.7	28%	9%	7%
Newlon Housing Trust	80	6%	4.7	75%	0.0	n/a	4.7	75%	6%	4%
Rooftop Housing Group	42	11%	4.7	228%	0.0	n/a	4.7	228%	11%	4%
Cottsway Housing	33	6%	4.6	38%	0.0	n/a	4.6	38%	14%	11%
Leeds Federated	26	11%	4.4	89%	0.0	n/a	4.4	89%	17%	10%
Watford Community Housing	35	10%	4.2	260%	0.0	n/a	4.2	260%	12%	4%
Futures Housing Group	51	1%	3.5	137%	0.7	-77%	4.2	-8%	8%	9%
Coastline Housing	29	-1%	4.2	-30%	0.0	n/a	4.2	-30%	14%	20%
Greatwell Homes	26	14%	4.2	218%	0.0	n/a	4.2	218%	16%	6%
Two Rivers Housing	25	3%	4.1	107%	0.0	-100%	4.1	2%	16%	16%
Havebury Housing Partnership	42	16%	4.0	198%	0.0	n/a	4.0	198%	10%	4%

Source: housing association audited accounts for year ended March 2019; Notes: * EU IFRS, 0 either no income in 2018 or sales income was not stated; *** No 2018 data available due to merger

A2Dominion brought in £112.5m in total development income in 2018/19. Although that is recorded as a 95 per cent increase, much of that rise is down to the fact that a large chunk of 2017/18 sales were of joint venture developments and so not recorded in the figures. Including joint venture figures, A2Dominion’s sales for 2017/18 would have been around £300m, said Anne Waterhouse, executive director of central and financial services.

She added that the landlord has still designated around 40 per cent of its 6,000-strong development programme for private sale, despite the difficult market conditions.

“In 2019/20, we are selling most of what is coming to the market,” she said. “We have not been as impacted in terms of the stagnation and uncertainty. [Our total sales will be] relatively close to the 2019 figure.”

Top 30 first tranche margins

Saffron Housing Trust came top for margin generated on first tranche sales in 2018/19, although this was on an income of just £100,000. Its surplus on first tranche sales exceeded its turnover because of a prior year adjustment of £114,000 to the cost of disposal for a scheme.

Among larger associations, with first tranche income of at least £1m, Poplar Harca had the widest margin (68 per cent), followed by Housing Solutions (52 per cent) and BPHA (50 per cent).

Bedford-based BPHA was one of just three associations in the top 30 by margin that generated more than £10m in first tranche income. The others were Cross Keys Homes, which managed a 42 per cent margin on £14m of sales, and The ExtraCare Charitable Trust, which made a surplus of £7.1m on £17.5m revenue (41 per cent margin).

HAs’ housing development-related surpluses, 2018/19

	First tranche sales			Non-social housing sales			Total development income
Registered provider	Surplus, £m	2018/19 margin	2017/18 margin	Surplus, £m	2018/19 margin	2017/18 margin	Surplus, £m	2018/19 margin	2017/18 margin
Peabody	16	38%	46%	22.0	24%	26%	38	29%	32%
Hyde	16	28%	28%	19.6	16%	4%	36	20%	20%
Notting Hill Genesis	10	23%	34%	14.0	15%	25%	24	18%	27%
Southern Housing	4	16%	18%	17.0	48%	30%	21	35%	20%
Vivid	9	36%	35%	10.6	23%	19%	20	28%	27%
Sovereign	12	22%	18%	3.9	20%	26%	16	21%	20%
Orbit	7	20%	23%	7.8	18%	17%	15	19%	20%
BPHA	13	50%	55%	0.0	n/a	n/a	13	50%	55%
Clarion	16	27%	30%	-3.4	-9%	30%	12	13%	30%
Anchor Hanover	0	18%	29%	11.6	22%	20%	12	22%	20%
Bromford	11	22%	22%	1.0	16%	-11,700%	12	21%	20%
LiveWest	5	22%	19%	5.4	19%	19%	10	20%	19%
Paradigm	9	30%	32%	0.4	15%	35%	10	28%	33%
Metropolitan Thames Valley ***	6	10%	n/a	3.5	15%	n/a	10	12%	n/a
Home Group	3	16%	22%	6.5	20%	18%	10	18%	20%
Optivo	10	33%	40%	0.0	n/a	38%	10	33%	39%
Platform Housing Group	9	29%	22%	0.6	3%	20%	9	18%	22%
Radian	6	24%	29%	3.5	32%	17%	9	26%	23%
Longhurst	7	33%	22%	1.9	8%	11%	9	19%	16%
Catalyst	2	11%	33%	6.4	20%	29%	8	17%	30%
Sanctuary *	5	34%	42%	3.4	29%	27%	8	32%	34%
Aster	7	17%	15%	0.2	10%	15%	8	17%	15%
The ExtraCare Charitable Trust	7	41%	30%	0.0	n/a	n/a	7	41%	30%
L&Q	16	23%	34%	-9.0	-8%	23%	7	4%	28%
A2Dominion	5	36%	44%	1.9	2%	8%	7	6%	15%
Gentoo	0	0%	n/a	6.3	14%	14%	6	14%	14%
Network Homes	7	29%	22%	-0.7	-19%	35%	6	22%	33%
Cross Keys Homes	6	42%	36%	0.0	n/a	n/a	6	42%	36%
Hightown	5	26%	29%	0.0	n/a	n/a	5	26%	29%
Wandle	5	34%	48%	0.0	n/a	n/a	5	34%	48%
Midland Heart	2	18%	18%	2.9	15%	13%	5	16%	17%
Stonewater	5	22%	25%	0.0	n/a	n/a	5	22%	25%
Curo	1	26%	42%	3.4	19%	21%	4	20%	24%
Flagship Homes	3	44%	1%	1.2	22%	0%	4	35%	1%
Moat Homes	4	15%	20%	0.0	n/a	n/a	4	15%	20%
PA Housing	4	33%	40%	0.0	5%	38%	4	32%	40%
Riverside	1	10%	4%	2.4	6%	11%	4	7%	10%
Grand Union Housing Group	4	35%	33%	0.0	n/a	n/a	4	35%	33%
Housing Solutions	3	52%	52%	0.0	n/a	n/a	3	52%	52%
CHP	3	30%	36%	0.3	10%	12%	3	25%	19%
Soha Housing	3	31%	37%	0.0	n/a	63%	3	31%	40%
Broadacres	2	43%	47%	1.1	21%	13%	3	32%	17%
B3 Living	3	38%	46%	0.0	n/a	n/a	3	38%	46%
Aldwyck Housing (Catalyst)	1	29%	21%	2.1	12%	8%	3	15%	13%
Octavia Housing	1	28%	51%	1.6	19%	0%	3	22%	15%
Selwood Housing	3	42%	33%	0.0	n/a	n/a	3	42%	33%
Golding Homes	2	29%	40%	0.3	13%	9%	3	25%	31%
Citizen	1	28%	37%	1.4	29%	20%	3	29%	23%
Aspire	2	42%	42%	0.0	n/a	n/a	2	42%	42%
Great Places Housing Group	2	16%	10%	0.7	18%	24%	2	16%	14%
Yarlington	2	22%	29%	0.0	n/a	n/a	2	22%	29%
Town & Country Housing	1	25%	36%	1.5	22%	-538%	2	23%	33%
GreenSquare Group	2	33%	30%	0.1	3%	9%	2	23%	16%
Settle	2	35%	32%	0.0	0%	0%	2	19%	7%
WHG	2	22%	30%	0.0	n/a	n/a	2	22%	30%
Newlon Housing Trust	2	43%	43%	0.0	n/a	n/a	2	43%	43%
Leeds Federated	2	45%	53%	0.0	n/a	n/a	2	45%	53%
Silva (Bracknell Forest Homes)	2	30%	38%	0.0	n/a	n/a	2	30%	38%
The Guinness Partnership	2	13%	15%	-0.1	-50%	24%	2	12%	22%
Vale of Aylesbury Housing	2	37%	30%	0.0	n/a	n/a	2	37%	30%
Greenfields Community Housing	2	33%	41%	0.0	n/a	n/a	2	33%	41%
Watford Community Housing	2	38%	25%	0.0	n/a	n/a	2	38%	25%
Torus62	2	14%	10%	0.0	n/a	n/a	2	14%	10%
Rooftop Housing Group	1	31%	16%	0.0	n/a	n/a	1	31%	16%
Yorkshire Housing	0	n/a	21%	1.5	24%	n/a	1	24%	21%
Havebury Housing Partnership	1	35%	41%	0.0	n/a	n/a	1	35%	41%
West Kent HA	1	28%	28%	0.0	n/a	n/a	1	28%	28%
Two Rivers Housing	1	33%	13%	0.0	n/a	25%	1	33%	19%
Greatwell Homes	1	30%	38%	0.0	n/a	n/a	1	30%	38%
Futures Housing Group	1	34%	17%	0.1	9%	10%	1	30%	12%
MHS Homes	1	17%	25%	0.0	n/a	n/a	1	17%	25%
Cottsway Housing	1	26%	21%	0.0	n/a	n/a	1	26%	21%
Ocean Housing	1	23%	16%	0.0	n/a	n/a	1	23%	16%
Wythenshawe Community Housing Group	1	21%	22%	0.0	n/a	n/a	1	21%	22%
Places for People **	1	19%	21%	0.0	0%	0%	1	1%	1%
Nottingham Community HA	1	14%	12%	0.0	n/a	n/a	1	14%	12%
Connexus	0	24%	22%	0.3	8%	n/a	1	12%	22%
CHS Group	1	15%	12%	0.1	5%	3%	1	11%	7%
Thirteen	1	6%	58%	0.0	n/a	n/a	1	6%	58%
Coastline Housing	0	12%	17%	0.0	n/a	n/a	0	12%	17%
Swan	0	20%	25%	0.5	5%	22%	0	5%	22%
Knowsley Housing Trust	0	5%	74%	0.0	n/a	n/a	0	5%	74%
Hexagon	0	1%	10%	0.3	8%	n/a	0	4%	10%
Wakefield and District Housing	0	3%	-4%	0.0	n/a	n/a	0	3%	-4%
Estuary HA	0	4%	17%	0.0	n/a	n/a	0	4%	17%
Plymouth Community Homes	0	2%	3%	0.0	n/a	n/a	0	2%	3%
Trafford Housing Trust	0	5%	-7%	-0.2	-3%	16%	0	-1%	13%
Advance Housing and Support	0	-1%	-2%	0.0	n/a	n/a	0	-1%	-2%
One Housing Group	8	31%	36%	-9.6	-30%	22%	-2	-4%	30%
Total	333	25%	29%	146.3	11%	19%	479	18%	24%

Source: HA audited accounts for year ended March 2019, Notes: * EU IFRS, 0 means either no income in 2018 or sales income or surplus was not stated; ** gave income but not profit on non-social sales; *** No 2018 data available due to merger

Top 30 non-social housing margins

Southern Housing led the way on margins on for-sale properties. It generated £16.96m in surplus from £35.41m of sales. That 48 per cent margin was up from 30 per cent in 2017/18.

Among the larger landlords, the other high-performing players included Radian, which generated a 32 per cent margin on £10.9m revenue; Sanctuary, which produced a 29 per cent margin on its sales of £11.7m; and Peabody, which made sales totalling £90m and a margin of 24 per cent.

Besides Southern and Peabody, the only other G15 landlords in the top 30 were Catalyst (20 per cent), Hyde (16 per cent), NHG (15 per cent) and Metropolitan Thames Valley (15 per cent), suggesting that profit has become harder to generate in the capital.

Unsold stock and risk warnings

Despite S&P’s assessment that some landlords are reducing risk by scaling back on for-sale activity, there is still evidence that, overall, the sector will continue to make use of market sale to drive affordable housing development.

According to ratings agency Moody’s latest report for housing associations, published in November 2019, revenue from market sale will continue to grow and “reach a peak of 25 per cent of turnover in 2021”.

The latest quarterly survey from the Regulator of Social Housing (RSH) for Q3 2019/20 also carried a warning for associations reliant on outright sale. It found that the number of unsold properties increased by 14 per cent to 2,537 – the highest total since data was first collected in June 2014.

In its most recent Sector Risk Profile report, published in November 2019, the RSH said: “The increased focus on sales income, both from shared ownership and outright sale, makes it increasingly important that providers understand the markets in which they operate and can effectively mitigate the risks of a slowdown in sales or reduction in market prices. In particular, there is increased risk of overtrading and cash shortages if there is a shortfall in market receipts.”