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South East landlord plans to cut back development by 20 per cent

News20 Mar 2023Michael Lloyd

Paradigm Housing plans to cut development by 20 per cent due to investment needed on other priorities, its chief executive has said. 

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Matthew Bailes (pictured left) speaking on a panel session at the Housing Finance Conference
Matthew Bailes (pictured left) speaking on a panel session at the Housing Finance Conference
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Paradigm Housing plans to cut back development by 20 per cent due to investment in other areas, its chief executive has said #UKhousing #SocialHousingFinance

Speaking at the Housing Finance Conference in Liverpool, Matthew Bailes, chief executive of Paradigm, said that the 16,000-home landlord is reducing development by “something of the order of 20 per cent”.

 

The conference, run by the National Housing Federation, took place on 15 and 16 March. 

 

Mr Bailes said: “Everyone is having to invest more in assets, partly because of the carbon agenda, partly because we need to make sure that we’re offering the quality,” he said.

 

“We are fortunate in being relatively financially strong, but we are still going to reduce development by something of the order of 20 per cent.” 

 

He added: “We’re certainly not stopping anything, but we’re going to turn things down a little bit.”

 

In its last reported full year to March 2022, Paradigm reported a group deficit of £11.2m, partly due to £32.5m of debt refinancing costs. On an operating basis, it reported a surplus of £50m on revenue of £116.8m.

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The Buckinghamshire-based landlord previously said it was committed to completing 2,250 homes between 2021 and 2026. 

 

A spokesperson for Paradigm told Social Housing that its corporate plan target, for 2021 to 2026, was to build 500 homes a year and its intention was to build at least a similar number in the years following the end of this corporate plan.

 

The housing association said that it is cutting 20 per cent from the final 18 months of the plan.

 

A spokesperson said: “Our development pipeline for the remaining corporate plan period is for the most part already contracted.

 

“However, taking into account the rent cap and inflationary pressures, we are working on what might still be delivered over the whole corporate plan period. It is expected that we may have to cut back in the final 18 months of the plan but are expecting to reach 2,000 to 2,100 over the five-year period. 

 

“This would be equivalent to 20 per cent fewer units during those 18 months, but averaged over the whole corporate plan period would be closer to 10 per cent.”

Lately, other social landlords have revealed that they have made, or plan to implement, changes to their development programmes.

 

Orbit has scaled back its development ambitions, while Platform has cut its housebuilding targets from delivering 2,000 homes a year by 2023-24 to now aiming for annual completions to reach a “steady output” of 1,600 in 2025.

 

In 2021, L&Q revealed that it was cutting its long-term housebuilding target by 70 per cent. 

 

Housing associations have previously warned of the seven per cent social rent cap leading to a decline in housebuilding.

Asset managementDecarbonisationDevelopmentEnergy efficiencyHousing Association/RPRepairs and maintenanceSouth East
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