Despite the increasing financial pressures on social housing providers and our customers, our underlying approach to value for money remains unchanged – it’s embedded in everything we do.
Value for money (VFM) recognises the need to balance factors such as available resources, risks and other duties that we must comply with (ie health and safety requirements) to ensure long-term financial viability, while securing the best value for our customers and communities.
We consider the quality of our homes and services, as well as how much it costs us to deliver them – we want better outcomes for customers that deliver good value. Our principles are:
- Effectiveness: Better for customers: the extent to which objectives are achieved and the relationship between intended and actual impacts
- Efficiency: Smarter for colleagues: the relationship between the output from goods or services and the resources to produce them
- Economy: Good value for everyone: minimising the cost of resources used while having a regard to quality.
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Business health
- Our operating margin (excluding impairment charges) was 23.7% (2024/25: N/A)
- Our social housing lettings margin was 16% (2024/25: 25.4%)
Our margin has remained strong, outperforming our peers and internal targets, despite inflationary pressures on costs. We’ve continued to invest in the quality of our homes and how we deliver services. We don’t expect these pressures to ease, however our plans continue to see a steady improvement in our margin in future years.
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Outcomes delivered
Customer satisfaction with our services was 83.5%, which is higher than last year (81.4%) as we’ve worked hard to enhance services and engage with our customers. It remains higher than the G15 median.
This year we focused on communications and engagement, reflected in improvements in customers’ satisfaction that we listen to their views and act upon them; that we keep them informed on things that matter to them; and that we treat them fairly and with respect.
Our communities are also realising the benefits from wider investments we’ve made such as improvements to community centres, school uniform vouchers and, social value of £14.8m delivered through our supply chain partners.
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Asset management
Return on capital employed (ROCE) indicates how efficiently we’ve reinvested our surpluses. Including impairment (the Regulator of Social Housing’s (RSH) definition), ROCE is 1.8%, demonstrating that we’re performing well against a challenging financial backdrop and similarly to our G15 peers.
Consistent with our margin trends, we’re performing well against the challenging financial backdrop, with a higher return than our peers, after adjustments. This metric will improve as we see a gradual increase in our margins.
Our occupancy rate for the year remained strong, reflecting the demand for our housing and continued strong performance to turnaround voids (an average of 41 days across the year).
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Funding
Gearing measures the level of net debt compared to our housing properties. Gearing was 44.1% (2024/25: 45.0%). We continue to perform better than our peers, as we strike a balance between keeping our debt as low as possible, while still building homes.
Our interest cover ratio remains one of the strongest among our peer group, as we’ve reduced our interest costs, as a result of successfully refinancing our debt over the last few years.
Our EBITDA MRI interest cover ratio of remains one of the strongest among our peer group, as we’ve reduced our interest costs, by successfully refinancing our debt over the last few years. Including impairment, our interest cover is 93.4% (2024/25: 90.3%).
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Social housing lettings and operating efficiency
Our social housing costs per home have broadly stayed the same; £6,498 this year (2024/25: £6,594) as continue to invest in the quality of our homes and how we deliver services.
Our rent collections also remain strong at 96.4% (2024/25: 99.7%), with bringing THCH in during the year, and despite the cost-of-living pressures on customers, demonstrating the support we provide is helping them to manage their finances.
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Development
We completed 1,008 homes (including our share through joint ventures) (2024/25: 602). This is higher than the previous year and as some delayed schemes completed and reflects our continued commitment to development. We’re managing our development programme carefully, as we reduce our exposure to market risks, by delivering more homes through our strategic partnerships.
We’re a Tier 1 strategic partner for the current Greater London Authority and Homes England grant programmes, enabling us to access government funding to build affordable homes.