Peabody Group, one of the UK's largest housing associations managing over 110,000 homes, has published its unaudited consolidated trading update for the six months ending 30 September 2026. The group reported a net surplus of £73m, up £18m on the same period last year, with total turnover rising to £537m from £522m. The update also highlights a sharp improvement in its EBITDA MRI interest cover to 88% from 59%, alongside continued investment in residents' homes and services, as the group navigates a challenging shared ownership sales market.

Key Points

  • Peabody Trust (46QW) — part of Peabody Group, a major London-based housing association
  • Net surplus increased to £73m for the six months to 30 September 2026, up from £55m in the prior year period
  • 1,274 homes completed in the period; 2,809 homes under construction at the half year; operating margin fell to 26% from 30%
  • Investors may be watching the progress of shared ownership sales, Awaab's Law compliance costs, and the planned acceleration of capital works in H2

Turnover Growth and Operating Margin Compression Reflect Increased Maintenance Spending

Total turnover for the six months to 30 September 2026 reached £537m, an increase of £15m compared with the same period last year. Core operating turnover rose by £21m, though revenue from sales fell by £6m to £42m. The operating surplus declined to £141m from £156m, with the operating margin contracting to 26% from 30%, reflecting higher expenditure on responsive and planned maintenance, leaseholder property improvements, and communal gas works. Repairs and maintenance spending reached £124m, up from £104m in the prior year period, the announcement states.

Disposal Programme Generates £93m as Portfolio Is Rationalised for Long-Term Investment

Peabody Group continued a strategic property disposal programme during the period, generating £93m in proceeds. This included £61m from the sale of 174 empty properties deemed unsuitable for sustainable improvement, £24m from unused land, and £8m from non-core housing assets. The group also benefited from £22m in one-off loan break gains following a simplification of historic bank borrowing facilities, a process expected to complete in the second half of the financial year. Staircasing income, generated as shared owners purchased additional equity stakes in their homes, contributed £46m to revenues during the period.

Peabody Completes 1,274 New Homes but Shared Ownership Sales Remain Under Pressure

The group invested £246m in new home construction during the first half, completing 1,274 homes — nearly double the 658 completed in the same period last year. However, 2,809 homes remained under construction at the half year, down from 5,175 a year earlier. The sales market remains challenging, particularly for shared ownership properties in London, where affordability pressures and mortgage costs are affecting demand. The group disclosed that unsold properties, valued at approximately £135m, include 263 homes awaiting release due to snagging issues. Peabody's CFO Phil Day noted the group is managing the impact of slower sales carefully.

Strong Liquidity Position and Credit Ratings Maintained Amid Board and Executive Changes

Peabody Group reported available liquidity of over £1.2bn at the half year, comprising cash and undrawn borrowing facilities, with gearing of 44% and 67% of borrowing on a fixed-rate basis. The Regulator of Social Housing reconfirmed the group's G1 governance and V2 financial viability ratings, while Moody's, Fitch, and S&P maintain stable credit ratings of A3, A-, and BBB+ respectively. The announcement also confirmed board changes: Martyn Burke stepped down in October 2026, Christine Turner joined the Peabody Trust Board, and Chief Operating Officer Elly Hoult will depart at the end of March 2027 to become Chief Executive of Lifestone Homes.