Notting Hill Genesis expects full-year surplus to exceed budget

NHG said this approach “significantly” reduces initial issues encountered by residents upon moving in and minimises disruptions from planned maintenance work during the early years of their tenancy. Repair costs are also lower in the medium term because void improvements are completed to a higher standard, the housing association added.

NHG said its remediation programme for properties with building safety issues continues to progress. The landlord said it has also made “steady progress” during 2022-23 to ensure it meets new legal requirements around building safety.

The social landlord estimates that around 12,000 homes will require investment to reach Energy Performance Certificate (EPC) Band C or better. These improvements are scheduled to be delivered by 2030 and are expected to cost just over £20m, it added.

This marks progress in the year after the housing association identified £142m to invest in improving its existing homes between now and 2030 in last year’s financial results.

The latest unaudited results showed that NHG estimates it will cost £700m to reach net zero by 2050 but said that the costs and technology to be deployed are still uncertain. So, it has factored these costs, as well as the £20m to reach EPC C, into the final 20 years of its 30-year business plan.

NHG added that it aims to develop new affordable and sustainable homes, as well as improving the sustainability of its existing homes. The group previously published a sustainable finance framework.

“Through our strategic objectives we will carry out our mission to ‘build and maintain quality affordable homes, creating diverse and thriving communities’. The needs and well-being of our residents remain core to everything we do,” the group said.

NHG has recently concluded a research and insight project to ensure it is shaping its future resident services around resident priorities. It has developed an in-house app to enhance the management of service charges and implemented various measures to address cases of damp and mould.

The landlord has also completed a 12-month pilot to review how it designs and manages its estates.

During the financial year, NHG withdrew from providing extra-care services and sold 415 extra-care units to Housing 21.

The housing association said: “The transfer has released funds for reinvestment elsewhere in our business at the same time as ensuring a better overall service for residents and greater opportunities for extra-care colleagues who are now employed by a more specialist provider able to offer more bespoke support and better career development options.”

As at 31 March 2023 NHG had £1.15bn of liquidity, comprising £1.1bn of undrawn available loan facilities and £47.1m in cash. The group’s average life of drawn debt is 15.2 years and its average cost of drawn debt is 4.12 per cent.

Development and sales

The results showed that NHG scaled back its development in 2022-23 but is set to increase the amount it spends on it next year.

In the year ending 31 March 2023, the housing association delivered 459 new homes and started on site for a further 459. This compares with the 1,346 it delivered last year, which was four more than in 2020-21 and above its 1,224 target.

NHG said the overall amount of money spent on new homes in 2022-23 was £267m, a £68m drop from the £335m it spent in 2021-22. However, the housing association is forecasting an increase to £399m in 2023-24.

In the last financial year, the housing association acquired 697 homes, comprising 336 low-cost rentals, 317 shared ownership homes and 44 joint ventures. This was a fall from 886 homes acquired in 2021-22.

NHG said: “We remain committed to building much needed new homes and meeting our sustainability goals… We plan to continue to expand our business through development growth.”

The landlord has set a target to deliver 5,000 new homes by 2028 by delivering around 1,000 homes per year.

It is on track to achieve this goal, it said, with 1,465 under construction and capacity for a further 6,000 homes within the landbank. The programme is targeted to deliver 70 per cent regulated affordable homes.

NHG started the financial year with 275 unsold homes and took handover of an additional 60 homes during the year. As at 31 March 2023, only 32 homes were unsold and the group’s average sales time was 13.2 weeks. 

The housing association is currently graded G1/V2 by the Regulator of Social Housing.