But housing association says amount “significantly” below what it had been planning originally

Peabody has increased its annual spend on development, investing £550m in new homes in 2022/23 despite cutting back on original new build plans.

In an unaudited trading update published on Friday, the £1.1bn turnover housing association, which has recently merged with Catalyst, said it built 2,399 homes overall in 2022/23, up from the 1,435 homes completed by the two organisations the previous year.

Peabody Thamesmead SOUTHMERE_phase 2 binsey

Peabody’s Southmere scheme, part of the Thamesmead regeneration project in South-east London

Its spend of £550m on new homes is a 14% increase on the total amount spent on development in 2021/22 by Peabody and Catalyst, which invested £355m and £128m respectively.

However, Antony Marriott, director of treasury and corporate finance at Peabody, told Building’s sister title Housing Today the figure is much lower than the amount it had originally envisaged to spend.

He added: “While still a substantial investment building on our successful sales activity during the year, it is significantly below what was anticipated at merger.

“This reflects a rebalancing of our expenditure to focus on existing homes and respond appropriately to the current economic environment. We are carefully managing our development programme and maintaining appropriate flexibility on the level of future spend and commitments.”

>> See also: Taking his place in the spotlight: meet the new Peabody boss

>>See also: Why are housing associations merging?

In 2021, the late Bob Kerslake, then chair of Peabody, said the combined organisation would target 3,000 homes a year. But in April, chief executive Ian McDermott said the organisation was scaling back development due to rising inflation and interest rates.