Vivid delivers record number of new homes, while surplus falls

The landlord entered into contracts for 2,021 new homes, an increase from 1,790 in the previous year. It reported having 9,413 homes in the pipeline, compared with 11,624 in 2022-23.

Vivid said it had delivered almost 8,500 new homes since it was formed through a merger in 2017, and this commitment includes the aspiration to build 25 per cent of new homes at social rent and 35 per cent at affordable rent.

During the year, the housing association also invested £87.5m in maintaining and improving customers’ homes, a rise from £82.1m in its previous year.

Mark Perry, chief executive of Vivid, said that the housing association remains “unwavering” in its focus on increasing the supply of new affordable homes to address the country’s continuing housing emergency. He highlighted that meeting customers’ needs and expectations was the landlord’s “absolute priority”.

“We’re fully committed to improving the level of service and maintaining our homes to the standard that our customers expect,” Mr Perry said.

“We’re also determined to continue building a substantial number of new homes to meet the acute housing need in our area for current and future generations.

“And we’re driven to maintain our financial strength against a backdrop of volatile interest rates, high inflation and a fragile housing market. This really matters to us, because we want to be able to continue doing all of this, even in difficult times and for the long term,” he said.

Vivid’s pre-tax surplus fell from £72.1m in 2022-23 to £54.3m in the last financial year.

Turnover rose from £332.9m to £357.9m and operating surplus grew from £106.2m to £109.9m.

Operating costs climbed from £130.9m to £151.3m. Interest and financing costs increased from £43.4m to £61.2m, and the actuarial loss in respect of pension schemes widened from £583,000 to £2.6m.

Gross sales proceeds fell from £18.1m to £10.8m and the surplus on sales of properties fell from £8.1m to £4.5m.

Mr Perry told Social Housing there were a number of factors influencing the drop in surplus.

“We chose to use the additional turnover to increase the investment in our existing homes, maintaining rather than growing our operating surplus,” Mr Perry said.

“There was a hike in interest and financing costs, which rose by 41 per cent to £61.2m in 2023-24. Over the past 18 months, the interest volatility has had an impact in the market.” 

Elsewhere, Vivid reported liquidity of £563m as of 31 March, a drop from £655m as of 31 March 2023. The housing association’s gearing ratio rose from 48 to 52 per cent.

In April this year, Vivid secured a £75m sustainability-linked 10-year facility from Nationwide to improve its existing homes and build new energy-efficient homes, and in August last year obtained £110m in total from two unsecured private placements.

Update: at 10.00am, 21.08.24

This story was updated to include a comment from Mark Perry about the drop in surplus.