Clarion Funding plc
29 July 2026
Clarion Funding plc
CLARION HOUSING GROUP Q1 2026/27 PERFORMANCE UPDATE
Clarion Housing Group's Quarterly Performance Update covering the period to 30 June 2026
Financial performance
Clarion has continued its strong performance into the first quarter of 2026/27, with improved surpluses compared to the previous year enabling continued investment in both new and existing homes.
Group turnover for the quarter was £261.8 million (Q1 2025/26: £260.5 million), with the positive impact of the long-term settlement on rental income being partly offset by lower development sales.
Operating surplus reached £103.6 million (Q1 2025/26: £85.5 million), which was reflective of an increase in disposal surplus following the completion of a large stock transfer during the quarter, along with increased rental income.
Net surplus before taxation and fair value adjustments was £69.8 million (Q1 2025/26: £50.2 million).
During the quarter we continued our programme of capital investment, with £118.4 million invested in building new homes (Q1 2025/26: £132.6 million) along with £27.2 million invested in Clarion's existing homes (Q1 2025/26: £25.5 million). The lower investment in new homes in the quarter was due to the planned phasing of schemes throughout the year.
The book value of housing fixed assets was £9.30 billion (Q1 2025/26: £8.91 billion), reflecting our continued investment in new homes along with improvements to existing properties.
Drawn debt was £4.65 billion at the quarter end (Q1 2025/26: £4.59 billion) with the increase reflective of spending on our planned capital investment programme. Liquidity remains strong at £0.95 billion at the end of the quarter (Q1 2025/26: £1.13 billion), with this liquidity held primarily through undrawn committed facilities with our relationship banks.
Operational performance
Operational performance was positive during the quarter, with continued improvement across customer service and repairs. Customer satisfaction was 86.1% (Q1 2025/26: 84.9%) and repairs satisfaction was 91.7% (Q1 2025/26: 91.3%), with both measures progressing during the first quarter of the financial year.
Tenant arrears stood at 5.40% at the end of June (Q1 2025/26: 6.12%), broadly in line with the level at the end of March. We continue to prioritise supporting residents with their tenancies and reducing arrears, with a new pilot team ensuring our focus continues to be on helping those residents most in need of support.
The Group completed 150 homes in the quarter (Q1 2025/26: 280), comprising 124 affordable and 26 private homes, with all private completions delivered through our joint ventures. This lower figure is reflective of several modest delays on certain sites, which will push delivery to later quarters of the financial year, but are not expected to impact full year completion numbers.
Sales income was £16.8 million in the quarter (Q1 2025/26: £22.4 million), while sales margins were minus 3.6% (Q1 2025/26: 2.5%). This sales margin is partly due to the sale of lower margin legacy stock and regeneration schemes in the early part of the year, but also reflects the continued challenges seen widely in the market at this time.
The development pipeline stood at 23,337 units at the end of the quarter (Q1 2025/26: 20,277), an increase of 452 units from the end of March.
Clarion continued to make good progress on development activity during the quarter, with some major milestones achieved on several schemes. The Hill Group were appointed as the main contractor to deliver 145 new social rent homes at Clarion's Clare House redevelopment in Tower Hamlets, with construction due to begin in April 2027. Clarion also secured planning approval from the London Borough of Bromley to deliver all 228 homes at the Blenheim Centre in Penge as social rent, up from an original affordable requirement of 35%, supported by grant funding from the Greater London Authority.
We continued our planned stock rationalisation programme, with over 800 homes in Luton transferred to housing association BPHA in May. The first quarter sales represent a significant proportion of our planned programme for the financial year.
Sustainability
During the quarter it was announced that Clarion's development arm Latimer has been named the UK's most sustainable housebuilder by the NextGeneration Benchmark 2025. This reflects our continued focus on sustainability and continues the improvement from positions of fourth in 2023 and second in 2024. The benchmark aims to drive change in the industry by promoting transparency and identifying best practice; it is described as "a comprehensive corporate sustainability benchmark for the largest 25 homebuilders in the UK, alongside any smaller homebuilders that want to voluntarily participate." Latimer also secured the NextGeneration Crystal Award, which recognises that we place clearly stated sustainability targets, performance data and case studies in the public realm. Achieving a Gold Award overall, Latimer ranked first for communities and placemaking, socio-economic development, and circular economy, with over 96% of homes delivered over the past year being fossil fuel free.
Progress continued in reducing Scope 1 emissions from Clarion workplaces in the quarter, with decarbonisation works at nine sites being completed. This involved replacing 325kW of gas-fired boilers with 166kW of direct electric heating and hot water systems, which is expected to result in reduced emissions of 40 tonnes of carbon dioxide equivalent (tCO2e).
During the quarter, Clarion also advanced its voltage optimisation programme, assessed home charging solutions for operatives, explored shared electric vehicle charging networks, progressed plans for superfast charging infrastructure at several sites, and expanded trials of new electric van models to support operational needs and driver comfort.
Supporting our residents and communities
Clarion continued to help residents build skills, find work and strengthen their communities during the quarter. Clarion supported 268 people into employment (Q1 2025/26: 251), 1,762 residents to access training or skills development opportunities (Q1 2025/26: 1,784), and helped 26 individuals set up their own business (Q1 2025/26: 10).
Money guidance and financial inclusion services delivered 3,410 interventions during the period (Q1 2025/26: 2,439), supporting residents to manage their finances, maximise income and access the financial help they need.
The quarter saw the first round of grants being awarded to 46 voluntary, community, and social enterprise (VCSE) organisations through our Community Catalyst Programme, with awards totalling £454,684. The Community Catalyst Programme is funded and delivered by a consortium of housing associations and organisations, including the Fusion21 Foundation, Places for People, Peabody and Metropolitan Thames Valley Housing. Clarion Futures is the lead partner of the consortium, responsible for administering the funding.
A total of £879,563 (Q1 2025/26: £226,581) was awarded in new grant funding during the period, a significant increase compared to the previous year primarily due to the Community Catalyst Programme.
Clarion has also joined Sovereign Network Group, Peabody, the Fusion21 Foundation and social movement Camerados to create 100 'public living rooms' across England over the next two years, creating welcoming community spaces where residents can connect, build relationships and reduce social isolation.
ENDS
For more information, please contact:
Andrew Hill, Director of Treasury and Corporate Finance, Clarion Housing Group - 0203 840 0164 / andrew.hill@clarionhg.com
Olly Clitheroe, Communications Manager, Clarion Housing Group - 07858089815 / oliver.clitheroe@clarionhg.com
Disclaimer
The information contained herein (the "Trading Update") has been prepared by Clarion Housing Group Limited (the "Parent") and its subsidiaries (the "Group"), including Clarion Funding plc, Affinity Sutton Capital Markets plc, Circle Anglia Social Housing Plc and Circle Anglia Social Housing 2 Plc (the "Issuers") and is for information purposes only.
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