In full audited accounts, the UK’s biggest social landlord revealed a post-tax surplus of £121.5m in the year to end of March 2021, compared with £168.4m the prior year.
Clarion, which operates around 125,000 homes, partly attributed the drop to a decision to freeze a long-running stock sell-off programme. As a result, the G15 landlord’s annual surplus from selling properties more than halved to £25m.
“Reflecting uncertain market conditions at the start of the pandemic, a decision was made to pause the planned sales in the current year,” Clarion said in its annual report. House prices initially fell sharply when COVID-19 first hit last year.
The landlord said that if those sales had gone through, its operating surplus, which dropped from £293m to £258m, would have increased by £3m.
Clarion has been embarking on a major stock rationalisation programme after it said in 2017 that it planned to sell 10,000 homes to shrink its footprint. In March last year, it sold 1,175 homes to Riverside.
The annual report also revealed that Clarion has upped its forecasted spend on fire safety to £150m over the next four years. Last year, the association said it expected to invest £100m up to 2025.
As a collective, the G15 has estimated that its 12 members will spend around £3bn on post-Grenfell fire safety works over the next decade.
So far Clarion has spent £77m on fire safety remediation, with £27m of this coming in the past financial year. It spent £18.9m in the prior year on a comparable basis.
The landlord owns 69 buildings that are taller than 18 metres and it said inspections of all these properties were completed in 2020. It also upgraded fire doors and and other fire safety features in 178 supported housing schemes, it revealed.
On buildings below 18 metres, it said that due to the lack of government funding, “many people who own or part-own flats may have to pay for their part of the bill”.
But Clarion added: “In every case, we are committed to exhausting all possible options for financing remedial work before asking leaseholders to make a contribution.”
On completions, the association bucked the trend by reporting a slight increase. A total of 2,126 homes were handed over compared with 2,101 the prior year. Of these, 90% were classed as affordable tenures.
However, total spend on new homes fell to £607m, compared with £632m the year before.
The landlord’s overall turnover rose 12% to £944.1m. This was helped by a 3% increase in income from social housing lettings to £687.4m due to the end of the government’s cap on rent rises and an increase in the number social homes managed by Clarion.
But its operating margin on social housing lettings fell to 31%, compared with 32.4% the year before. Void losses were £12.6m, compared with £9.6m the previous year.