Peabody’s annual spend on existing homes jumps to £374m

Ian McDermott, chief executive of Peabody, branded it a “year of good progress”, but said there is still “much work to do”.

Peabody has been among a number of landlords criticised by outgoing housing secretary Michael Gove following multiple severe maladministration findings from the Housing Ombudsman. Mr Gove has written to Mr McDermott three times in 2024 voicing his concerns. 

In its update this week, Peabody pointed to its plans to spend around £2bn over the next five years on improving and maintaining homes, which equates to around £1m a day. 

“This is the right thing to do and will bring material benefits,” Mr McDermott said. “Over time it will help to reduce the volume of responsive repairs and complaints and improve residents’ satisfaction with our landlord services.”

In its last financial year, the housing association said it spent £135m on improving the condition and environmental performance of homes, which means nearly 80 per cent are now Energy Performance Certificate Band C. 

Peabody also invested £64m in fire safety, compared to £66m in the 2022-23 financial year. 

Elsewhere in its unaudited results, the group revealed that its annual turnover was £992m, which is an 11 per cent fall on the previous year. 

Peabody blamed the drop on “planned” lower sales income of £130m, compared to around £300m the year before. 

Turnover from core operations increased to £855m, which included £774m from social housing rental income, Peabody said. 

On completions, the landlord reported a 42 per cent drop as 1,381 homes were handed over, compared to 2,399 the previous year. 

Peabody, which has a G1/V2 rating with the regulator, said it expected its overall operating margin to be “similar to last year” at around 23 per cent, despite “significant cost pressures” and the “challenging operating environment”. 

The group reported nearly £1.3bn of cash and undrawn facilities, but did not disclose a current debt figure. It has fixed assets of more than £11bn and gearing at around 40 per cent.

Eamonn Hughes, chief financial officer at Peabody, is leaving at the end of this week, as previously announced last October. He is being replaced by The Guinness Partnership’s current finance boss Phil Day, who will join in September. 

Mr Day will be making a return to Peabody, having previously spent nearly eight years at the group up until 2010 as its assistant director of finance.