It is almost a year on from the introduction of our new settle brand. During that time we have made significant progress as a modern social landlord for our colleagues and customers.
We are building increasing numbers of affordable homes (80 last year, 120 this year with a target of 180 by the end of the 2019/20 financial year). We know we can and need to do more but I want our growth to be prudent and sustainable. We are financially strong and as a result are able to continue to invest in our people and communities.
At settle we’re clear on our purpose – to help people who are struggling to find a place to live, and to help them live comfortably in their homes. This is never more important than at times of change. We are aware of the pressures our residents and suppliers face due to economic and political change, such as the continued roll out of Universal Credit and the impact of Brexit.
We also need to be sure we are challenging ourselves to look to the future. Especially in the current climate, where we are seeing other organisations reducing their forecast surplus and, rightly, recent coverage in the housing sector press about what this means for organisations like settle.
So what are we doing to help manage these changes?
The board and leadership team at settle continually monitor the delivery of our key business plan aims to ensure we are on track. We stress-test the business to ensure we are resilient and have a number of mitigating actions in place to trigger if or when needed to protect settle, our customers and our aims. Where we see pressure or risks to achieving our aims we consider our options and, where necessary, act.
We are currently updating our strategy and supporting customers is at the heart of this work. Our plans will see us increase both development of new homes and investment in existing properties. Next year we’ll continue increasing investment in current homes in line with our programme of stock condition surveys that ensure we understand where we need to make planned investments. From the £2.7m we spent during 2017/18, we have significantly increased that expenditure this year to a forecast £4.4m and look to spend over £7.5m on this next year.
Our commitment to development remains absolute. In previous years we have derived a significant amount of income from market sale properties. And we wouldn’t want to deny this – those funds have enabled us to deliver many much-needed homes – but we changed our approach a couple of years ago and our focus has been on trading out rather than developing a pipeline.
As settle, our development strategy has evolved. At a time when it is increasingly difficult for our customers to access the housing market, we need to play our part. We will do this by increasing both the number of properties we deliver and the percentage of these that are affordable. Our new strategy will be clear on this: over the five years from 2019-2024, we will be aiming to deliver around 1,250 homes, moving from our previous target of 66% of these being affordable, to around 90%.
The cash generative nature of our core landlord business means we can comfortably afford to increase our development ambitions and be less reliant on market sales. In 2017/18, 22% of turnover was derived from market sale. We are forecasting that in 2018/19 this will drop to 9% and in our 2019/20 budget that this will be 3%.
As a modern social landlord, we are ambitious for colleagues, customers and communities. We want to do all we can to ensure our residents and partners can look to the future with confidence. In our first year as settle, I believe we are well on the way to helping create that secure future – the hard work of all colleagues is beginning to bear fruit.