Page 22 - Housing Solutions Annual Report

Operating Margins

Operating margins have been steadily reducing generating higher level of leads and interest for
due to the annual rent reduction of 1% over the properties available for sale. We have also made
last 5 years. In 2020 there was a 50% reduction enhancements to the property sales part of our
on the forecast surplus from first tranche shared website, creating an online sales process.
ownership sales, in itself reducing our operating
margin by 3.1%. This was largely due to the general Despite the reduction in first tranche sales, we
slowdown in sales in the second and third quarter remain at the top quartile when compared to the
of the year. Interest in and reservations of new sector for operating margin on social housing
homes improved over the last quarter of the lettings and throughout the Covid-19 pandemic
financial year and into 2020/21 and we are seeing we have had sustained interest in our properties.
improvements in transactions, despite the Covid-19 Initial indications are that 2020/21 sales will
lockdown. be significantly better than anticipated when
setting our expectations at the early stages of the
As more shared ownership properties have handed pandemic. In the interim period during the Covid-19
over, we have increased the capacity within our restrictions we have worked closely with our local
sales and marketing team. This enables us to authority partners to offer vacant properties as
continuously monitor and review market trends and short term temporary lettings.
focus our marketing across our areas of operation,

Operating margin (social housing lettings only) %

45%
40%
35% 39.5% 39.3%
34.9%
30% 34.6% 33.6%
25% 28.3% 29.2%
20% 23.1%

15%
10%
5%
0%
Peer Lower Peer Middle Peer Upper Sector Lower Sector Middle Sector Upper Housing Housing
Quartile Quartile Quartile Quartile Quartile Quartile Solutions Solutions
2019 2019 2019 2019 2019 2019 2018/19 2019/20

Operating margin as % of turnover

60%
50%
50.2%
40% 46.0% 42.6%
30% 34.6%
20%
10%
0%
2016/17 2017/18 2018/19 2019/20

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