Karbon Homes looking for potential partners to launch for-profit provider

Karbon said the government’s proposed rent settlement of the Consumer Price Index plus one per cent for five years, as well as its clear intention to increase housebuilding are “welcome announcements”.

However, the association said that development of new social housing in the current climate “remains difficult”.

G15 landlord Hyde became the first traditional housing association in 2022 to register a for-profit provider with the regulator. In September this year, a Hyde execute revealed that it has three more for-profits in the pipeline.

Elsewhere, Karbon’s results also showed that pre-tax surplus fell year-on-year from £21.9m to £16.9m in the six months ending 30 September.

Turnover grew from £98m to £108m. On an operating basis, including asset sales, the landlord’s surplus rose from £26.3m to £27.2m.

The results showed that in the first six months of the year, Karbon spent £16.6m on responsive repairs – a rise from £13.6m in the same period in the previous year.

In addition, the association reported that since September 2023 it has added 255 homes. Progress is slightly behind target this year, reducing capital expenditure but also reducing income from completed homes, it said.

In July, Karbon took on 770-home Newcastle-based provider Leazes Homes as a subsidiary.

In the update, Karbon said these homes and teams are “now fully integrated” into the group and the half-year results include a £1.3m goodwill adjustment to income. This reflects the differences between the fair values of the properties and loan facilities acquired and their historic costs. 

The housing association posted a gearing figure of 35 per cent in the first half of the year, a slight drop from 35.7 per cent in the same period in 2023-24. Over the same period, interest cover fell from 218.3 to 199 per cent.