Corporate report

Homes England Annual Report 2024 to 2025 — Financial Statements, accessible version

Updated 19 November 2025

Applies to England

4. Financial Statements

Group Statement of Comprehensive Net Expenditure – Year ended 31 March 2025

	Note	2024/25 £’000	2023/24 (restated)* £’000
Expenditure
Grants	4	3,286,126	2,594,518
Cost of land and property disposals	5	55,771	75,082
Programme costs	6	87,644	74,137
Staff costs	7a	74,338	79,831
Pension costs	7a	14,185	21,177
Administration expenses	8	31,799	28,293
Write-down of land and property assets	16	178,264	134,242
Decrease/(reversal of decrease) in fair value below initial cost of financial assets measured at fair value through profit or loss	12g	(141,290)	187,902
Impairment/(impairment reversal) of financial assets measured at amortised cost	12g	(29,714)	63,645
Increase/(decrease) in provisions		(1,096)	(2,569)
		3,556,027	3,256,258
Income
Proceeds from disposal of land and property assets	5	104,338	119,632
Increase/(reversal of increase) in fair value above initial cost of financial assets measured at fair value through profit or loss	12g	297,657	(15,594)
Gain/(loss) on disposal of financial assets	12g	(6,047)	36,735
Interest income	12g	119,329	118,132
Other operating income	9	199,505	151,489
		714,782	410,394
Net operating expenditure		2,841,245	2,845,864
Interest payable		599	428
Share of losses/(profits) of associates and joint ventures	10	7,767	5,317
Impairment of investments in associates and joint ventures	11b	6,678	-
Pension fund finance (income)/costs	18d	(338)	(11,315)
Net expenditure before tax		2,855,951	2,840,294
Income tax charge/(credit)		832	6,407
Net expenditure for the year		2,856,783	2,846,701
Other comprehensive expenditure
Actuarial loss/(gain) from pension fund	18e	3,784	8,439
Income tax on items in other comprehensive expenditure		(946)	(2,110)
		2,838	6,329
Total comprehensive expenditure for the year		2,859,621	2,853,030

*See Note 1s in the Notes to the Financial Statements for information regarding the retrospective restatement applied to recognise pension asset ceiling adjustments. In the Statement of Comprehensive Net Expenditure, the restatement affects the income tax charge and items of other comprehensive expenditure.

The Group Financial Statements incorporate those of the Agency and the investees controlled by the Agency. No Statement of Comprehensive Net Expenditure is presented for the Agency as this is not materially different to that presented for the Group.

All activities above derive from continuing operations. Net expenditure is financed by Grant in Aid as explained in accounting policy Note 1e, with the exception of non-cash expenditure, for example depreciation, amortisation, provisions and impairments.

Group Statement of Financial Position – Year ended 31 March 2025

	Note	2024/25 £’000	2023/24 31 March 2024 (restated)* £’000	2023/24 01 April 2023 (restated)* £’000
Non-current assets
Intangible assets		24,938	21,502	9,282
Property, plant and equipment		13,343	9,234	11,000
Investments in associates and joint ventures	11b	56,948	59,303	61,932
Pension assets	18a	189	1,553	1,795
Trade and other receivables	12b	122,222	140,774	176,780
Financial assets held at amortised cost	12d	873,638	832,731	846,979
Financial assets held at fair value through profit or loss	12d	16,633,466	18,097,486	19,622,677
		17,724,744	19,162,583	20,730,445
Current assets
Land and property assets	16	1,156,089	1,064,633	1,069,359
Trade and other receivables	12b	212,289	286,289	368,300
Financial assets held at amortised cost	12d	543,214	354,343	570,566
Financial assets held at fair value through profit or loss	12d	78,765	107,502	109,670
Cash and cash equivalents	12a	388,501	166,687	217,485
		2,378,858	1,979,454	2,335,380
Total assets		20,103,602	21,142,037	23,065,825
Current liabilities
Trade and other payables	17	(466,521)	(495,425)	(555,453)
Provisions		(150)	(301)	(3,889)
		(466,671)	(495,726)	(559,342)
Non-current assets plus net current assets		19,636,931	20,646,311	22,506,483
Non-current liabilities
Trade and other payables	17	(26,974)	(20,195)	(25,324)
Provisions		(4,418)	(5,443)	(4,821)
Pension liabilities	18a	(2,710)	(3,223)	(5,858)
		(34,102)	(28,861)	(36,003)
Assets less liabilities		19,602,829	20,617,450	22,470,480
Reserves
Income and expenditure reserve		19,602,829	20,617,450	22,470,480
Taxpayers’ equity		19,602,829	20,617,450	22,470,480

*The Group has applied a retrospective restatement to its Financial Statements to recognise pension asset ceiling adjustments. In the Statement of Financial Position, the restatement materially affects both pension assets and the income and expenditure reserve. Please refer to Note 1s for further information on this restatement, including the nature of the restatement and all financial statement line items affected.

In accordance with International Accounting Standard 1 Presentation of Financial Statements (IAS 1), as the restatement has a material impact on the Statement of Financial Position at the beginning of the preceding period, a restated Statement of Financial Position at this point has been provided.

The accompanying Notes are an integral part of these Financial Statements. Approved by the Board on 14 July 2025 and signed on their behalf by:

Eamonn Boylan
Interim Chief Executive and Accounting Officer

Agency Statement of Financial Position – Year ended 31 March 2025

	Note	2024/25 £’000	2023/24 31 March 2024 (restated)* £’000	2023/24 01 April 2023 (restated)* £’000
Non-current assets
Intangible assets		24,938	21,502	9,282
Property, plant and equipment		13,343	9,234	11,000
Investments in subsidiaries	11a	100,000	100,000	50,000
Investments in associates and joint ventures	11b	13,906	14,184	20,615
Pension assets	18a	189	1,553	1,795
Trade and other receivables	12b	122,222	140,774	176,780
Financial assets held at amortised cost	12d	873,638	832,731	846,979
Financial assets held at fair value through profit or loss	12d	16,633,466	18,097,486	19,622,677
		17,781,702	19,217,464	20,739,128
Current assets
Land and property assets	16	1,156,089	1,064,633	1,069,359
Trade and other receivables	12b	212,289	286,289	368,300
Financial assets held at amortised cost	12d	543,214	354,343	570,566
Financial assets held at fair value through profit or loss	12d	78,765	107,502	109,670
Cash and cash equivalents	12a	388,501	166,687	217,485
		2,378,858	1,979,454	2,335,380
Total assets		20,160,560	21,196,918	23,074,508
Current liabilities
Trade and other payables	17	(511,074)	(551,748)	(571,170)
Provisions		(150)	(301)	(3,889)
		(511,224)	(552,049)	(575,059)
Non-current assets plus net current assets		19,649,336	20,644,869	22,499,449
Non-current liabilities
Trade and other payables	17	(26,974)	(20,195)	(25,324)
Provisions		(4,418)	(5,443)	(4,821)
Pension liabilities	18a	(2,710)	(3,223)	(5,858)
		(34,102)	(28,861)	(36,003)
Assets less liabilities		19,615,234	20,616,008	22,463,446
Reserves
Income and expenditure reserve		19,615,234	20,616,008	22,463,446
Taxpayers’ equity		19,615,234	20,616,008	22,463,446

*The Agency has applied a retrospective restatement to its Financial Statements to recognise pension asset ceiling adjustments. In the Statement of Financial Position, the restatement materially affects both pension assets and the income and expenditure reserve. Please refer to Note 1s for further information on this restatement, including the nature of the restatement and all financial statement line items affected.

In accordance with International Accounting Standard 1 Presentation of Financial Statements (IAS 1), as the restatement has a material impact on the Statement of Financial Position at the beginning of the preceding period, a restated Statement of Financial Position at this point has been provided.

The accompanying Notes are an integral part of these Financial Statements. Approved by the Board on 14 July 2025 and signed on their behalf by:

Eamonn Boylan
Interim Chief Executive and Accounting Officer

Group Statement of Cash Flows – Year ended 31 March 2025

	Note	2024/25 £’000	2023/24 £’000
Net cash (outflow)/inflow from operating activities	(a)	(1,593,554)	(1,032,546)
Cash flows from investing activities
Purchase of property, plant and equipment		(1,140)	(1,489)
Purchase of intangible assets		(14,457)	(14,075)
(Investment)/divestment made in group companies	11b	(12,090)	(2,688)
Net cash outflow from investing activities		(27,687)	(18,252)
Cash flows from financing activities
Grant in Aid from sponsor department	SoCTE*	1,845,000	1,000,000
Rent payments reducing finance lease liabilities		(1,986)	-
Rent receipts reducing finance lease assets		41	-
Net cash inflow from financing activities		1,843,055	1,000,000
Increase/(decrease) in cash and cash equivalents in the period		221,814	(50,798)
Cash and cash equivalents at 1 April	12a	166,687	217,485
Cash and cash equivalents at 31 March	12a	388,501	166,687

a) Reconciliation of net operating expenditure to net cash flow from operating activities

	Note	2024/25 £’000	2023/24 £’000
Net operating expenditure	SoCNE**	(2,841,245)	(2,845,864)
Financial assets:
Financial asset investments made by the Agency	12e, 12f	(542,676)	(312,195)
Proceeds from disposal of financial asset investments	12e, 12f, 12g	2,354,613	1,927,638
(Gain)/loss on disposal of financial assets	12g	6,047	(36,735)
(Valuation gains)/reversal of gains above cost on financial assets held at fair value through profit and loss	12g	(297,657)	15,594
Valuation losses/(reversal of losses) below cost on financial assets held at fair value through profit and loss	12g	(141,290)	187,902
Increase/(decrease) in impairment of financial assets measured at amortised cost	12g	(29,714)	63,645
Interest added to financial assets held at amortised cost	12f	(87,992)	(88,310)
Land and property:
Additions to land and property assets	16	(322,476)	(202,273)
Cost of land and property assets disposed	5	52,756	72,757
Increase in write-downs of land and property	16	178,264	134,242
Other:
Depreciation and amortisation	8	8,062	5,111
Impairment of intangible assets		6,312	-
Carrying value of disposed property, plant and equipment, with no cash proceeds received		1,712	-
Pension costs	18d, 18f	(2,595)	483
Payments of income tax		(4,500)	(10,263)
		(1,662,379)	(1,088,268)
Decrease/(Increase) in receivables		94,157	118,310
(Decrease)/increase in payables		(24,156)	(59,622)
(Decrease)/increase in provisions		(1,176)	(2,966)
Net cash outflow from operating activities		(1,593,554)	(1,032,546)

*SoCTE: Statement of Changes in Taxpayers’ Equity
**SoCNE: Statement of Comprehensive Net Expenditure

The Group Financial Statements incorporate those of the Agency and the investees controlled by the Agency. No Statement of Cash Flows is presented for the Agency as this is not materially different to that presented for the Group.

Group Statement of Changes in Taxpayers’ Equity – Year ended 31 March 2025

	Note	2024/25 £’000	2023/24 (restated)* £’000
Balance at 1 April		20,617,450	22,470,480
Net expenditure for the year		(2,856,783)	(2,846,701)
Actuarial gain/(loss) from pension fund	18e	(3,784)	(8,439)
Income tax on items in other comprehensive expenditure		946	2,110
Total comprehensive expenditure for the year		(2,859,621)	(2,853,030)
Grant in Aid from sponsor department	1e	1,845,000	1,000,000
Balance at 31 March		19,602,829	20,617,450

*See Note 1s in the Notes to the Financial Statements for information regarding the retrospective restatement applied.

Agency Statement of Changes in Taxpayers’ Equity – Year ended 31 March 2025

	Note	2024/25 £’000	2023/24 (restated)* £’000
Balance at 1 April		20,616,008	22,463,446
Net expenditure for the year		(2,842,936)	(2,841,109)
Actuarial gain/(loss) from pension fund	18e	(3,784)	(8,439)
Income tax on items in other comprehensive expenditure		946	2,110
Total comprehensive expenditure for the year		(2,845,774)	(2,847,438)
Grant in Aid from sponsor department	1e	1,845,000	1,000,000
Balance at 31 March		19,615,234	20,616,008

*See Note 1s in the Notes to the Financial Statements for information regarding the retrospective restatement applied.

Notes to the Financial Statements – Year ended 31 March 2025

1. Statement of Accounting Policies

a) Statutory basis

The Homes and Communities Agency, trading as Homes England (hereafter, the Agency), is an executive non-departmental public body and statutory corporation created by the Housing and Regeneration Act 2008 (as amended by the Localism Act 2011). Homes England is sponsored by the Ministry of Housing, Communities and Local Government (MHCLG).

The Financial Statements of Homes England are governed under the provisions of the Housing and Regeneration Act 2008 and by the Accounts Direction given by the Secretary of State, with approval of HM Treasury under the Act. The Direction issued on 24 March 2023 reflects government policy that the Financial Statements should, insofar as appropriate, conform to the accounting and disclosure requirements contained in Managing Public Money and the Government Financial Reporting Manual (FReM). The Financial Statements have been prepared in accordance with the 2024/25 FReM issued by HM Treasury.

The accounting policies contained in the FReM apply International Financial Reporting Standards (IFRS) as adapted or interpreted for the public sector context. Where the FReM permits a choice of accounting policy, the accounting policy which is judged to be most appropriate to the particular circumstances of the Agency for the purpose of giving a true and fair view has been selected. The policies adopted by the Agency are described below. They have been applied consistently in dealing with items that are considered material to the Agency’s accounts.

b) Accounting convention

The Financial Statements are prepared under the historical cost convention modified by the revaluation of certain assets and liabilities as determined by the relevant accounting standards (which, for these Financial Statements, includes financial assets held at fair value through profit or loss, financial assets held at amortised cost and some land and property assets held at net realisable value).

c) Basis of preparation and consolidation

The Group Financial Statements incorporate those of the Agency and the investees controlled by the Agency. No Statement of Comprehensive Net Expenditure is presented for the Agency as this is not materially different to that presented for the Group. No Statement of Cash Flows is presented for the Agency as this is not materially different to that presented for the Group.

Unless specified, all Notes to the Financial Statements apply to both the Group and Agency.

The Group’s associated undertakings are all undertakings in which the Group has a participating interest and over whose operating and financial policy it exercises significant influence. The Group’s joint ventures are all undertakings in which the Group exercises joint control. In the Group Financial Statements, investments in associates and joint ventures are accounted for using the equity method, wherein an investment is initially recorded at cost and subsequently adjusted to reflect the investor’s share of the net assets of the associate or joint venture. The consolidated Statement of Comprehensive Net Expenditure includes the Group’s share of profits and losses of associates and joint ventures, while its share of net assets of associates and joint ventures is shown in the Group Statement of Financial Position.

The share of net assets and profit information is based on unaudited financial statements or management information to 31 March 2025 for most associates and joint ventures. Where this information is not available, financial statements with a different reporting date have been used, where this reporting date is within three months of that of the Agency and where this does not produce significantly different results. Adjustments have been made on consolidation for significant transactions following the reporting date of the information used.

English Cities Fund Limited Partnership prepares its annual financial statements up to 31 December, the same reporting date as its investee partner.

Countryside Maritime Limited prepares its annual financial statements up to 30 September, which is the reporting date of the joint venture partner.

Tilia Community Living LLP prepares its annual financial statements up to 31 March, which is the same reporting date as the Agency.

Newton Development Partners LLP prepares its annual financial statements up to 31 March, the same reporting date as the Agency.

Habiko LLP prepares its annual financial statements up to 31 December, which is the reporting date of the joint venture partners. The entity was incorporated on 25 October 2024 and will produce its first set of audited accounts for the period ending 31 December 2025.

MADE Partnership LLP prepares its annual financial statements up to 30 June, which is the reporting date of the joint venture partners. The entity was incorporated on 6 September 2024 and will produce its first set of audited accounts for the period ending 30 June 2025.

Juniper JVCO Limited prepares its annual financial statements up to 31 December, which is the reporting date of the joint venture partner. The entity was incorporated on 18 October 2024 and will produce its first set of audited accounts for the period ending 31 December 2025.

d) Investments in subsidiaries, associates and joint ventures

Investments in subsidiaries, associates and joint ventures, as recorded in the Agency’s own Statement of Financial Position, are accounted for at cost (subject to an annual assessment for impairment).

e) Funding

The Agency’s activities are funded in part by income generated from operations and in part by Grant in Aid provided by the Ministry of Housing, Communities and Local Government for approved and budgeted expenditure.

Grant in Aid received to finance activities and expenditure which support the statutory and other objectives of the Agency is treated as financing and credited to the income and expenditure reserve in full, because it is regarded as a contribution from a controlling party. The net expenditure for the period is transferred to this reserve.

f) Critical accounting judgements

In the process of applying its accounting policies, the Agency makes various judgements, apart from those including estimates (which are detailed in Note 1g), that can significantly affect the amounts it recognises in its financial statements.

Critical judgements, apart from those including estimates, are as follows:

Defined benefit pensions
The Agency applies asset ceiling adjustments to the carrying value of its pension assets on the basis that government pension regulations apply conditions to the realisation of surpluses. This means the Agency has no unconditional right to gain equivalent economic benefit from surpluses that have built up. The asset ceilingadjustments ensure that no net pension assets are recognised in relation to surpluses that can’t be unconditionally realised.

The decision to apply asset ceiling adjustments is a critical accounting judgement which is material to these Financial Statements. While the Agency consults with actuaries to try and ensure the reasonableness of its judgement, the realisation of government pension scheme surpluses is a complex area that is subject to change.

The value of asset ceiling adjustments applied can be seen in Note 18. The judgement to apply asset ceiling adjustments was made during 2024/25 and has resulted in a prior period adjustment. Details of the prior period adjustment can be seen in Note 1s.

Financial asset investments
As highlighted more extensively in Note 1n, the Agency applies the criteria laid out in International Financial Reporting Standard 9 Financial Instruments (IFRS 9) to determine whether an investment should be measured at amortised cost, fair value through other comprehensive income or fair value through profit or loss. The basis of measurement for a financial asset investment can significantly affect its carrying value in the Agency’s Financial Statements.

While for most investment contracts it is relatively straight-forward for the Agency to determine the correct measurement basis, for a small number of more complex agreements a degree of judgement is required. The Agency ensures that members of staff with extensive knowledge and experience of IFRS 9 and its practical application are involved in determining the measurement bases for its financial asset investments.

g) Key sources of estimation uncertainty

The Agency’s key sources of estimation uncertainty are impacted by the macroeconomic uncertainty in the current markets and alternative economic scenarios are considered in the Performance Report, within the Impact of Macroeconomic Uncertainty section.

Financial assets measured at fair value
Where assets are to be measured at fair value, this is performed with reference to the requirements of International Financial Reporting Standard 13 Fair Value Measurement (IFRS 13), applying considerations which follow the three hierarchies set out under the standard for determining fair value.

The majority of financial assets measured at fair value are investments in homes, such as those under the Help to Buy scheme, as analysed in Note 12e. These assets are valued with reference to regional house price indices, supplemented by experience adjustments, which are calculated by comparing the Agency’s actual disposals occurring in the three months leading up to the year end, to the comparable expected disposal values computed with reference to regional house price indices alone. Together, these provide a reasonable estimate of the fair value of these assets because house price indices alone cannot accurately predict the value of individual homes; and disposal proceeds to date, although a good indicator of market performance, may not occur at the same level in the future. As the Agency’s security over the Help to Buy investment is via a second charge over the property with the main mortgage provider holding the first charge, if the amount needed to settle the homeowner’s main mortgage does not leave sufficient sale proceeds available to settle our original percentage share, then the Agency will not receive its full percentage share of the proceeds. Instead, it will receive the available remaining cash after the first charge has been settled. In an economic scenario where there was a significant decrease in house prices, there is a risk that the Agency may not recover the full amount of its equity loan balance due to this first charge effect.

The valuation of investments in homes (through equity loan programmes such as Help to Buy) is highly sensitive to changes in assumptions about market prices. Investments in homes are also the Agency’s most significant asset category so the judgement exercised by management, both in the application of indexation to the home equity portfolio and in the experience adjustments applied, is a source of material estimation uncertainty in the Agency’s Financial Statements.

Analysis showing the sensitivity of the valuation of these assets to changes in market prices, and therefore to management’s judgement in estimating this valuation, is shown in Note 14a. In addition, Note 15a outlines the Agency’s analysis of the sensitivity of the valuation of the Help to Buy portfolio to key modelling assumptions.

Other financial assets measured at fair value are generally valued with reference to cash flow forecasts, which are by their nature based on estimates. A particular source of estimation uncertainty within these forecasts is the value of receipts projected to be collected by the Agency in future periods. The projected values of receipts are integral to the calculations that underpin the relevant fair values recognised within these Financial Statements. An exception to this is the Agency’s investment in the PRS REIT plc, which is valued with reference to quoted unit prices on the London Stock Exchange.

More information on the Agency’s application of IFRS 13 to support fair value measurement is set out in Note 12d and Note 13.

Expected credit losses
The Agency is required to calculate an expected credit loss allowance for financial assets measured at amortised cost. The majority of the assets the Agency measures at amortised cost relate to funding the Agency has provided as loans, and a small number of non-current trade receivables. The Agency also calculates a simplified expected credit loss allowance for current trade receivables as permitted under International Financial Reporting Standard 9 Financial Instruments (IFRS 9).

The expected credit loss allowance at 31 March 2025 is analysed in Note 12i. There are various key assumptions applied to the expected credit loss model to which the calculation is highly sensitive, therefore the assumptions applied are a key judgement of management.

The key assumptions applied are as follows:

• Probability of default: Probability of default values are determined with reference to current economic conditions, notably with reference to the ongoing conflict in Ukraine and uncertainty stemming from protectionist trade policies. The probability of default values are applied to each investment in relation to their individual credit risk rating (CRR).

• Economic scenarios and relative weightings: IFRS 9 requires the Agency to consider alternative economic scenarios in the calculation of the expected credit loss allowance. These scenarios consist of an upside, downside, and base case and are detailed in the Performance Report within the Impact of Macroeconomic Uncertainty section. For each identified scenario, variations are made to the probability of default values applied based on an individual investment’s CRR. The amount of change applied is dependent on the scenario. Weightings are applied to the expected credit loss calculations for each scenario, determined in relation to the Agency’s view of the probability of each scenario occurring, with reference to current market and credit risk expectations.

• Loss given default (LGD) floor: The Agency has determined that available historic default data is insufficient to provide an evidence base for anticipated losses on default. As a result, a minimum percentage value has been applied to the LGD calculation with reference to individual investments. This floor has been derived on the basis of management judgement and interpretation of Prudential Regulation Authority guidance. At 1 April 2024 and 31 March 2025, the LGD floor applied was 35%.

• Moderated security values (MSVs): To reflect the expected value which might reasonably be realised from the sale of security in the event of default, MSV percentages are applied to gross security values to determine a measure of LGD (when compared against the estimated exposure on default). The MSVs are varied depending on the type of security held. A lower MSV percentage results in a higher discount applied to the determined security values.

Changes to these assumptions can have a significant impact on the expected credit loss allowance calculation. A sensitivity analysis has been performed in relation to these assumptions in Note 15b.

Note 12i provides an analysis of the movements in the expected credit loss allowance between 1 April 2024 and 31 March 2025, including the impact of changes in credit risk assumptions over the period.

Land and property assets
Determination of the value of land and property assets involves a significant amount of estimation uncertainty, particularly given the complexity of some of the Agency’s properties and the range of anticipated routes to disposal. Valuations are performed by independent qualified valuation experts. Most land and property assets, by value, are assessed by these independent valuation specialists. However, as the assets are held under International Accounting Standard 2 Inventories (IAS 2) and carried at the lower of cost and net realisable value, the estimation uncertainty involved in property valuations only affects carrying value where a write-down is identified. Of the £1,156m carrying value of land and property assets at 31 March 2025, £397m is held at cost and £759m is held at net realisable value.

Defined benefit pensions
The value of the Agency’s defined benefit pension assets and liabilities have been assessed by qualified independent actuaries. In making these assessments, it is necessary for actuarial assumptions to be used which include future rates of inflation, salary growth, discount rates and mortality rates. Differences between those estimates used and the actual outcomes will be reflected in taxpayers’ equity in future years.

As the assets managed under the Agency’s pension scheme are predominantly quoted investments there is less uncertainty surrounding their valuation than unquoted assets held elsewhere on the Agency’s Statement of Financial Position. There are some investments that are unquoted, including in private equity, real estate, infrastructure, other equity securities, investment funds and unit trusts that may be subject to valuation uncertainty, but these represent a small proportion of scheme assets, 16.82% (16.13% in 2023/24). Similarly, the discount rates used for scheme liabilities are derived from bond markets and so determined with reference to published figures at the Statement of Financial Position date.

h) Grants

Payments of capital and revenue grants to registered providers of social housing (RPs) and other bodies are accounted for on an accruals basis, with the grant expenditure being recognised at the point RPs and other bodies have met relevant criteria and become contractually entitled to grant payments.

Payments of Affordable Housing grants may be paid in one, two or three instalments depending on scheme and provider eligibility: an acquisition tranche, a start on site tranche and a completion tranche. In the two years disclosed, the tranches for Affordable Housing schemes were as follows:

• 40% on acquisition (where eligible), 35% on start on site (where eligible; this tranche may increase to 75% if the scheme is not eligible for an acquisition payment), 25% on completion;

• For those RPs who have been selected for continuous market engagement, payment flexibility of up to 95% against eligible expenditure can be claimed at acquisition and/ or start on site;

• Affordable Housing grant under Strategic Housing Partnerships are paid quarterly in arrears, in line with total eligible development expenditure.

Housing Infrastructure Fund grants and Brownfield Infrastructure and Land grants are paid in line with development costs incurred in the financial year.

Cladding Safety Scheme grants for works packages are paid in line with costs incurred in the financial year.

Cladding Safety Scheme grants for pre-tender support are calculated as 15% of the estimated cost of works and are paid once eligibility has been confirmed.

i) Grant recoveries

Recoveries of Affordable Housing grants from RPs are accounted for when the amount due for repayment has been agreed with the RP and invoiced. RPs may retain grant recoverable from sales within their own accounts for recycling, with the funds becoming due back to the Agency if unused within three years. Recoveries of other grants are accounted for when the repayment becomes contractually due. While judgement is involved in the calculation of the recoverable amount, this is not deemed to be material to the Financial Statements.

j) Revenue recognition

Homes England recognises revenue from its contracts with customers in line with International Financial Reporting Standard 15 Revenue from Contracts with Customers (IFRS 15).

Income from the disposal of land and property assets is recognised when there is a legally binding sale agreement, which has become unconditional and irrevocable by the end of the reporting period. The transaction price is the amount of the consideration to which the Agency expects to be entitled in exchange for transferring the risks and rewards of ownership of the asset. Payment terms for such transactions may vary depending on the nature of the agreement. Where payment is on deferred terms the associated receivable is discounted to reflect the net present value of the receipt.

Income from rent and other property income is recognised over the period to which it relates and is invoiced in line with the terms of the lease. Invoices are payable upon issue.

Income from homeowner fees is recognised in the period to which it relates and is paid monthly in arrears. The fee accrues daily after the financial instrument reaches a defined maturity and the income is recognised to the extent that it has accrued at the reporting date.

Income from projects where the Agency acts as developer, where external contractors manage build and sales on behalf of the Agency, is recognised when a performance obligation in the contract is met. This is normally at legal completion and measured at the fair value of the consideration received or receivable for the property. Where income is based on a contract and recognised over time, it is recognised by reference to the stage of completion of the contract activity at the Statement of Financial Position date. This is normally measured by compliance inspector reports of work performed to date. A contract asset is recognised when the Agency has completed a proportion of the contract activity prior to payment being received. A contract liability is recognised where cash has been received in advance of the contract activity being completed. The only income stream through which the Agency acts as a developer is Direct Commissioning sales, as reflected in Note 5.

All of the income reflected in the Statement of Comprehensive Net Expenditure, with the exception of increases in fair value above initial cost of financial assets measured at fair value through profit or loss, interest income and gains on the disposal of financial assets, arises from contracts with customers.

k) Income tax

The income tax charge represents the sum of current tax and deferred tax, both of which are wholly in relation to UK corporation tax. Both current and deferred tax are recognised in the Statement of Comprehensive Net Expenditure except to the extent that they relate to items recognised directly in taxpayers’ equity, in which case they are recognised in taxpayers’ equity.

Current tax is the expected tax payable on the taxable surplus for the year, based on tax rates that have been enacted or substantively enacted by the end of the reporting period, and any adjustment to tax payable in respect of previous years.

Deferred tax is the tax expected to be payable or recoverable in the future arising from temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax is calculated at the tax rates expected to apply in the period when the liability is settled or the asset realised, based on tax rates that have been enacted or substantively enacted by the end of the reporting period.

A deferred tax asset is recognised only to the extent that it is probable that future taxable surpluses will be available against which the temporary differences can be utilised.

l) Land and property assets

Valuation
Land and property assets are shown in the Statement of Financial Position at the lower of cost and net realisable value (NRV). Cost comprises direct costs that have been incurred in bringing the land and property assets to their present location and condition, including the capitalisation of staff time where appropriate. NRV is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs necessary to make the sale, including marketing, legal and panel solicitor fees. NRV is an entity specific valuation methodology which reflects Homes England’s circumstances, the purpose for which the asset is held and the future disposal strategy for the asset. This is different from fair value methodology which is a market based measurement and which establishes a value based on a price that would be received to sell an asset in an orderly transaction between market participants.

A NRV at each reporting period will be obtained for land and property assets if there is evidence of a change in NRV, brought about by certain trigger events and in all cases, where the NRV of the asset was more than or equal to £5m in the preceding year. Such trigger events include the receipt of planning permission, significant capital expenditure or a change in expected disposal strategy. If no trigger event occurs and the NRV of the asset was less than £5m in the preceding year, the asset will retain the NRV from the last assessment. This is subject to a requirement for each asset to be revalued at least once in every five year period.

However, last year, in light of the economic environment in the period leading to the valuation date (increases in base rates, below average buyer demand for new build homes, inflationary pressures), the decision was made to revalue all assets, even where no trigger events had occurred.

An estimate of the NRV at the reporting period is obtained in accordance with the current edition of RICS Valuation – Global Standards, effective from 31 January 2022 and the RICS Valuation – Global Standards 2017 UK national supplement, (collectively known as ‘The Red Book’), as amended, extended or updated from time to time. In establishing a NRV for each asset, the following will be taken into account: there is a willing buyer and seller; the transaction is at arm’s length; each party has acted knowledgeably, prudently and without compulsion; the reasons for Homes England holding the asset and future disposal plans for the asset.

Following the determination of NRV at the reporting period, each asset is individually assessed to calculate a write-down expense/ reversal of write-down expense. A reversal of a write-down expense for previously written-down assets may occur where the NRV increases. Increases are limited to an amount which results in assets being carried at their historic cost. Any movements in the valuation of land and property assets are shown in the Statement of Comprehensive Net Expenditure as a write-down expense/credit.

The valuation of land on which the Agency acts as developer, where external contractors manage build and sales on behalf of the Agency, is based on the value of the contract and progress to date. The contract value is adjusted to reflect any costs expended and any sales achieved in year.

Disposal of land and property assets
Where proceeds are receivable over a period of more than 12 months after the end of the reporting period, the proceeds are discounted at a rate prescribed by HM Treasury to reflect the net present value of the receipt. The rate applied during the year was 2.15% (2023/24: 2.05%), in accordance with HM Treasury’s PES (Public Expenditure System) (2024) 9, Discount Rates for General Provisions, post-employment benefits, financial instruments and leases (under IFRS 16); Announcement of rates. This paper was issued by HM Treasury on 3 December 2024.

Some land sale agreements contain overage clauses, which is where the seller can become entitled to additional sale proceeds, in addition to the agreed purchase price, if certain conditions relating to the disposed asset are met at a later date. Where a land sale agreement includes an overage clause, IFRS 9 requires that any associated receivable is measured (discounted to reflect the net present value of the receipt as described above) and disclosed as a financial asset at fair value through profit or loss (FVTPL). Over time, the initial discount unwinds through the Statement of Comprehensive Net Expenditure as a valuation gain. The associated overage clause is measured and disclosed separately as a financial asset at FVTPL (Level 3 hierarchy).

Where no overage clause exists, the receivable is measured and disclosed as a financial asset at amortised cost. Accounting policy n) financial assets, under sub-heading Impairment, sets out the factors to be considered when measuring financial assets at amortised cost. Over time, the initial discount unwinds through the Statement of Comprehensive Net Expenditure as interest income.

m) Provisions

Provisions are made for environmental liabilities where the Agency is under a statutory, contractual, or constructive obligation to remediate land to relevant standards. The amounts provided are the best estimate of the expenditure required to settle the obligation, based on circumstances existing at the reporting date. Expenditure expected to be incurred in future years is discounted in accordance with HM Treasury’s PES (Public Expenditure System) (2024) 9, Discount Rates for General Provisions, post-employment benefits, financial instruments and leases (under IFRS 16); announcement of rates. This paper was issued by HM Treasury on 3 December 2024. The rates applied during the year for short, medium and long-term provisions were 4.03%, 4.07% and 4.81% respectively (2023/24: 4.26%, 4.03% and 4.72%).

Provisions are recognised for other liabilities as appropriate and discounted in line with the HM Treasury’s guidance if applicable.

n) Financial assets

Recognition and derecognition
Financial assets are recognised in the Statement of Financial Position when the Agency becomes a party to the contractual provisions of the instrument (this is usually when cash is initially advanced to the counterparty, but for home equity assets this is at the point of legal completion of the underlying property purchase) and are measured at fair value on recognition.

Where differences between the fair value at initial recognition, as calculated using the methods described in Note 12d and Note 13, and the price paid by the Agency to acquire the instrument are significant, they are either:

• recognised as grant expenditure where fair value is estimated to be below cost, in accordance with IAS 20 Accounting for Government Grants and Disclosure of Government Assistance; or

• deferred and released over the expected life of the instrument, in accordance with IFRS 9.

The Agency fully derecognises a financial asset only when the contractual rights to the cash flows for the asset expire, or it transfers the financial asset and substantially all the risks and rewards of ownership to another entity. Partial derecognition occurs where parts of the contractual cash flows are received – for example where a homeowner chooses to partially redeem their equity loan. Here, the element of the asset which relates to the repayment is derecognised.

Cash and cash equivalents
Cash comprises cash on hand and demand deposits. Third party cash comprises cash held by solicitors at year end in relation to deals which were in progress and cash received by the Agency’s mortgage administrator for home equity redemptions. This cash is under the control of the Agency at the year end and only in the custody of third parties due to the timing of deals in progress and the processing of onward transfers of cash to the Agency by the mortgage administrator. The Agency has no cash equivalents.

Trade and other receivables
Trade and other receivables may be measured at fair value or amortised cost depending on the nature of the individual balance. Where the balance is measured at amortised cost, the carrying value is subject to an expected credit loss calculation. Land sale agreements that contain clauses for the recovery of overage are measured at FVTPL.

Financial asset investments
The Agency follows IFRS 9 for all investments, subject to interpretations and adaptations for the public sector context as defined in the FReM.

Classification and measurement of financial assets
Two criteria are used to determine how financial assets should be classified and measured under IFRS 9:

• the business model for managing the asset; and

• the contractual cash flow characteristics of the financial asset.

The measurement categories reflect the nature of the cash flows and the way they are managed. The three categories are:

• financial assets measured at amortised cost (AC);

• financial assets measured at fair value through other comprehensive income (FVTOCI); and

• financial assets measured at fair value through profit or loss (FVTPL).

The contractual cash flow characteristics are either:

• financial assets held to collect cash flows only; or

• the assets are held to collect cash flows and to sell.

Financial assets are measured at AC if they are held within a business model whose objective is to hold financial assets to collect contractual cash flows and their contractual cash flows represent solely payments of principal and interest. The Agency’s loan agreements which do not contain an equity element fall under this category.

Financial assets are measured at FVTOCI if they are held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and their contractual cash flows represent solely payments of principal and interest. Currently, the Agency has no assets which meet the requirements to be recognised under this classification.

All other financial assets are measured at FVTPL. All of the Agency’s other financial assets, excluding loan agreements which do not contain an equity element, are therefore measured at FVTPL. This comprises home equity loans, loans receivable with an equity element and various other investments as presented in Note 12d.

Business models are determined on initial application. The Agency assesses the business model at a portfolio level. Information that is considered in determining the business model includes:

• policies and objectives for the relevant portfolio; and

• how the performance and risks of the portfolio are managed, evaluated, and reported to management.

Financial assets managed on a fair value basis are held at FVTPL with no elections made to classify as FVTOCI.

In assessing whether contractual cash flows are solely payments of principal and interest, terms that could change the contractual cash flows so that it would not meet the condition for solely payments of principal and interest are considered, including:

• contingent and leverage features;

• non-recourse arrangements; and

• features that could modify the time value of money.

Assets measured at fair value
Most of the Agency’s financial assets are measured at fair value. Under IFRS 9 the Agency is required to value assets in accordance with IFRS 13. The practical application of this standard is explained with reference to the Agency’s asset portfolios in Notes 12d and 13, with detail regarding the key assumptions which support the Agency’s most significant fair value estimate set out in Note 15a.

When determining the fair value hierarchy level under which a financial asset should be disclosed under the requirements of IFRS 13, the Agency considers the observable inputs used within the valuation of the asset.

The Agency considers relevant factors as outlined in IFRS 13 in determining whether there have been any transfers between levels of the fair value hierarchy. These factors include changes in the availability of observable inputs or it becoming necessary to adjust observable inputs with unobservable inputs. These factors are considered at least annually for particular asset groups or where there has been a contractual change for an individual asset. There were no transfers between levels in 2024/25 (2023/24: none).

Assets measured at amortised cost
Assets are valued by applying effective interest rates, calculated to recognise interest in accordance with IFRS 9 requirements to capitalise transaction costs and recognise fee income as finance income, spread over the life of the investment. Valuation of assets is subject to the impairment requirements of IFRS 9 for recognising write-off adjustments, modification adjustments and expected credit loss allowances.

Recognition of gains and losses on financial assets
For all categories of financial assets measured at fair value through profit or loss (as presented in Note 12), gains and losses are determined as follows:

• valuation gains or losses arise due to the change in the fair value between the reporting date and the prior year reporting date, and;

• for assets that are disposed during the year, gains or losses on disposal arise, being the difference between the value of proceeds received and the carrying value at the point of disposal.

For all categories of financial assets measured at amortised cost (as presented in Note 12), gains and losses are determined as follows:

• Write-offs and write-backs result in the recognition of losses and gains, and;

• Movements in expected credit loss allowances between the reporting date and the prior year reporting date give rise to gains and losses, and;

• Modification gains or losses arise as a result of adjusting the gross carrying amounts of assets where there has been a renegotiation of contractual cash flows.

Impairment
IFRS 9 requires the Agency to recognise expected credit losses anticipated within the next 12 months based on unbiased forward-looking information. Where a significant increase in credit risk is identified, the Agency is required to recognise total lifetime expected credit losses.

The measurement of expected credit loss involves increased complexity and judgement including estimation of probabilities of default, loss given default, a range of future economic scenarios, estimation of expected lives, estimation of exposures at default and assessing significant increases in credit risk.

Key concepts and management judgements
The impairment requirements are complex and require management judgements, estimates and assumptions. Key concepts and management judgements include:

Determining a significant increase in credit risk since initial recognition
As aforementioned, IFRS 9 requires the recognition of 12 month expected credit losses (the portion of lifetime expected credit losses from default events that are expected within 12 months of the reporting date) if credit risk has not significantly increased since initial recognition (Stage 1), and lifetime expected credit losses for financial instruments for which the credit risk has increased significantly since initial recognition (Stage 2) or which are credit impaired (Stage 3).

The Agency assesses when a significant increase in credit risk has occurred based on quantitative and qualitative assessments for individual investments. These assessments can include the monitoring of counterparty financial performance, monitoring to identify the occurrence of an event of default or breach of covenants, and identifying any insolvency events of the counterparty or its key customers or suppliers.

Where term loans are issued, it is often sensible to apply an assumption that any missed monthly repayments which are not remedied within a 30-day timeframe are indicative of a significant increase in credit risk. However, because the Agency does not issue term loans with monthly repayment terms and loans are usually repayable either on development milestones or in full at a contractual long-stop date, the 30-day measure is not considered to be helpful as an indicator of significant increases in credit risk for the Agency’s loan portfolio.

Default
Default is deemed to have occurred when a borrower has materially defaulted on their obligations and / or there is evidence that a counterparty is experiencing financial difficulty and their ability to repay is impaired. Homes England rebuts the presumption that exposures where payments past due exceed 90 days results in default. This is rebutted on the basis Homes England primarily advances development loans where interest is accrued and capitalised and repayment primarily comes from the sale of developed collateral (dwellings or land) and a delay in a sale or repayment is not always reflective of a significant increase in credit risk (SICR) or default.

In determining whether a counterparty and resultantly a financial asset is classified as being in default, Homes England assesses a range of factors including, but not limited to:

• whether a significant breach of lending terms and obligations has occurred i.e. a breach in financial covenants, legalisation or litigation has occurred;

• the availability of ‘Cure’, ‘Remedy’ or ‘Standstill’ periods and whether these have lapsed. These provisions, where agreed with the borrower at the outset, provide an opportunity (during a restricted time period) for the borrower to rectify a default before enforcement action is taken. These provisions are commonly used by lending institutions;

• whether there is a realistic prospect for any distress to be remedied by the counterparty or beneficial owners without significant lender intervention and contract modification; and

• where relevant, if another lender to the counterparty has recognised a default resulting in a SICR regardless of whether this triggers cross default provisions.

As Homes England’s loans and advances which meet the requirements to be measured at amortised cost are broadly consistent in nature, all being commercial loans and advances to companies involved in housing investment and development, a consistent approach to default is taken across the organisation.

Counterparties and associated financial assets which are deemed to be in default are only considered to have cured and returned to Stage 2 or Stage 1 following completion of a restructure which has resulted in the counterparty’s ability to repay their obligations no longer being impaired. Any restructure which consequently results in Homes England absorbing a loss will result in the financial asset being classified as in default.

Homes England does not utilise probation periods when assessing the staging of a financial asset and therefore assets can move upwards through the stages without restriction. The approach reflects the nature of Homes England’s activities which are heavily concentrated in development finance and whereby distress and default is ordinarily only reversed through significant intervention or modification or a fundamental change in economic conditions. In the absence of these factors our expectation is that defaulted assets will remain in default until exited.

Forward-looking information
Credit losses are cash shortfalls from what is contractually due over the life of the financial instrument. Expected credit losses are a measure of unbiased probability-weighted credit losses which might reasonably be expected, determined by evaluating a range of possible outcomes and considering future economic conditions. When there is a non-linear relationship between forward- looking economic scenarios and their associated credit losses, a range of forward-looking economic scenarios, currently expected to be a minimum of three, will be considered. This is to ensure a sufficient unbiased representative sample of the complete distribution is included in determining the expected loss.

Homes England assigns a CRR to all counterparties with whom the organisation has provided financial assets that are measured at amortised cost. The CRR utilises a combination of qualitative and quantitative information including previous financial performance and strength, projected cash flows and leverage alongside more qualitative factors such as management experience. This assessment culminates in a single CRR figure and associated probability of default being applied based on the overall credit assessment of the given counterparty. This rating takes into consideration past financial performance (where evident), expected performance of a given counterparty and, critically, the underlying project.

The probability of default values associated with each CRR under the most likely central scenario have been determined by Homes England by adjusting the average probability of default values, which have been established using methodology applied in previous years by MHCLG using macroeconomic indicators. Prior to 2024/25, this methodology was also combined with an overall subjective opinion to produce estimates of the final adjusted probability of default values. In 2024/25, a Vasicek approach has been implemented to calculate the adjusted probability of default values. This moves the approach for calculating PDs from a predominately judgement- based methodology to a more quantitative approach.

To ensure compliance with IFRS 9, Homes England has adopted an additional probability weighted assessment of expected credit losses, utilising two plausible alternative economic scenarios. As Homes England operates in a single sector (housing) the loans and advances made are greatly concentrated, and as a result, defaults may be more greatly correlated in comparison to a loan portfolio which benefits from sector diversification.

The alternative economic scenarios adopted during 2024/25 are derived from the macroeconomic forecast scenarios provided by the Office for Budget Responsibility. Sensitivity analysis regarding this judgement is provided in Note 15b.

The decision on how to weight these scenarios against the central scenario is primarily derived from expert judgement within Homes England. Alternative scenarios and weightings are reviewed on a minimum of a six-monthly basis and are scrutinised through the Agency’s forums and committees.

Expected life
Lifetime expected credit losses must be measured over the expected life of individual agreements. For modelling purposes, this is restricted to the maximum contractual life of investments. Potential future modifications of contracts are not considered when determining the expected life or exposure at default until they occur.

Discounting
Expected credit losses are discounted at the effective interest rate at initial recognition, or an approximation thereof. For loan commitments, the effective interest rate is the rate that is expected to apply when the loan is drawn down and a financial asset is recognised. For variable / floating rate financial assets, the spot rate at the reporting date is used and projections of changes in the variable rate over the expected life are not made to estimate future interest cash flows or for discounting.

Modelling techniques
Expected credit losses are calculated at the individual financial instrument level by multiplying three main components, being the probability of default, loss given default and the exposure at default, discounted at the original effective interest rate. The methodology and key assumptions are outlined in detail in Note 15b.

Write-offs
Homes England manages distressed financial assets through a specialist team with experience in restructuring and insolvency.

Most of Homes England’s loans and advances have the benefit of security. Write-offs take place once all such security has been realised or there is no realistic prospect of recovery and the amount of the loss has been determined.

Events that typically result in a write-off ahead of security being fully realised include, but are not limited to:

• the financial asset is subject to insolvency proceedings and the only funds that will be received are the amounts estimated by the Insolvency Practitioner;

• security (typically property) is disposed of and a decision is made that no further funds will be received;

• independent professional advice (typically third party valuations or assessments) shows a significant shortfall with limited evidence that any shortfall will be recouped.

Any further recoveries of amounts previously written off are generally considered fortuitous gains and reduce the amount of impairment losses recorded in the Statement of Comprehensive Net Expenditure.

o) Financial liabilities

Financial liabilities are recognised in the Statement of Financial Position when the Agency becomes a party to the contractual provisions of the instrument.

All of the Agency’s financial liabilities are non- derivative and are measured initially at fair value and subsequently at amortised cost.

Financial liabilities consist of trade and other payables. Financial liabilities are classified as current liabilities unless the Agency has an unconditional right to defer settlement for at least 12 months after the end of the reporting period.

The Agency derecognises a financial liability only when the Agency’s obligations are discharged, cancelled or they expire.

p) Pension costs

The Agency accounts for pension costs in accordance with International Accounting Standard 19 Employee Benefits (IAS 19). During the year the Agency’s participating employees were members of one of the following contributory pension schemes: The Homes and Communities Agency Pension Scheme, The City of Westminster Pension Fund or the West Sussex County Council Fund. All three schemes are multi-employer defined benefit schemes as described in paragraph 8 of IAS 19.

Plan assets are measured at fair value. Liabilities are measured on an actuarial basis and discounted to present value. The net asset or obligation is recognised within pension assets or liabilities, respectively, in the Statement of Financial Position. The operating and financing costs of the schemes are recognised separately in the Statement of Comprehensive Net Expenditure. Service costs are spread over the working lives of employees and financing costs are recognised in the period in which they arise. Actuarial gains and losses are recognised in full in taxpayers’ equity.

q) Financial commitments

The Agency records a financial commitment when it is legally or constructively committed to pay another body in relation to a specific matter and the commitment hasn’t yet been recognised as a liability in the Agency’s Statement of Financial Position (as the Agency is not currently liable based on past events but has contracted to be or will be constructively liable in the future if the counterparty reaches certain triggers or milestones). It is legally committed when it is subject to statute or is contractually bound. It is constructively committed when it has created a valid expectation in others, via its policies, conduct or established pattern of practice, for example, that it will be bound by certain obligations. The value of the financial commitment is determined by the amount which is still to be paid at the reporting date and profiled with reference to cash flow forecasts.

r) Impact of new standards and interpretations in issue

International Financial Reporting Standard 17 Insurance Contracts (IFRS 17)
IFRS 17 Insurance Contracts replaced IFRS 4 Insurance Contracts and became effective for entities reporting under the Government Financial Reporting Manual (FReM) on 1 April 2025. The new standard applies more standardised and rigorous requirements on accounting for insurance contracts, setting out clearer expectations on the recognition, classification and measurement of assets and liabilities in relation to insurance contracts.

As IFRS 17 only became effective for the Agency on 1 April 2025 (post year end), it had no impact on these Financial Statements. The Agency does not anticipate the standard will have a significant impact on its Financial Statements going forward as it does not hold material insurance contracts within the scope of the standard.

International Financial Reporting Standard 18 Presentation and Disclosure in Financial Statements (IFRS 18)
IFRS 18 Presentation and Disclosure in Financial Statements will replace IAS 1 Presentation of Financial Statements. It aims to improve financial reporting by requiring that items of income and expenditure in the statement of profit or loss be categorised and presented in defined categories (operating, investing, financing, tax and discontinued operations). It also mandates the presentation of new subtotals in the statement of profit or loss, outlines new principles for the aggregation and disaggregation of items and requires disclosures over certain management- defined profit and loss performance measures.

The implementation of IFRS 18 for entities reporting under the FReM is not planned until 2028 and it may require further adaptation for the public sector.

The Agency anticipates that the structure and presentation of its Statement of Comprehensive Net Expenditure will change accordingly following implementation of the standard, although it is less likely to be affected by the disclosure requirements regarding management-defined profit and loss performance measures, given its KPIs are not profit and loss orientated.

International Financial Reporting Standard 19 Subsidiaries without Public Accountability: Disclosures (IFRS 19)
IFRS 19 will permit reduced disclosure requirements for certain subsidiary entities and is planned to become effective for private sector entities in 2027, although as at the time of writing this report, it has not yet been endorsed for use in the UK by the UK Endorsement Board and it is not yet known when it will become effective for entities reporting under the FReM.

As the Agency does not meet the criteria of a subsidiary without public accountability, it does not anticipate that IFRS 19 will have a significant impact on its Financial Statements.

s) Retrospective restatement applied to the Financial Statements

The Agency’s policy for correcting known errors once discovered is to follow International Accounting Standard 8 Accounting Policies, Changes in Accounting Estimates and Errors (IAS 8) and to correct all material prior period errors retrospectively in the first set of financial statements authorised for issue after their discovery.

Nature of the restatement
The Agency has assets and liabilities under three pension schemes, all of which are multi-employer defined benefit schemes as described in paragraph 8 of IAS 19 Employee Benefits.

At each year end actuaries prepare valuation reports for each scheme in accordance with IAS 19. These reports value the Agency’s assets and liabilities in each scheme based upon several assumptions. The reports determine whether each scheme is in a surplus or deficit position and whether the Statement of Financial position would show a net pension asset or liability respectively.

When schemes are in a surplus position, IFRIC Interpretation 14 (IFRIC 14) clarifies that a defined benefit pension asset can only be recognised to the extent an entity expects to obtain economic benefit from the surplus. Economic benefit can be realised through an entity receiving an unconditional right to a refund or a reduction in future contributions. Where a surplus exists but the entity does not expect to receive equivalent future economic benefit from it, an asset ceiling adjustment is applied to ensure that the carrying value of the net pension asset doesn’t exceed the economic benefit that will flow to the entity.

During the year ended 31 March 2019, the Agency received actuarial advice that it was reasonable to stop applying asset ceiling adjustments in respect of the three schemes as changes had been made to government pension scheme regulations (LGPS Regulation 2013) allowing exit credits to be paid from schemes.

During the current period (the year ended 31 March 2025), Homes England commenced a review of this topic and determined that revised LGPS (Amendment) Regulations 2020 came into force on 20 March 2020 and took effect from 14 May 2018. The amended regulations essentially cancelled the previous changes where restrictions on payment of surpluses were removed and meant that the distribution of any surplus was dependent on the scheme rules. This dependence on the scheme to distribute a surplus removed the Agency’s unconditional right to a refund. Consequently, relevant asset ceiling adjustments have been retrospectively applied to reduce the carrying value of net pension assets recognised. The restated net pension assets reflect only the economic benefit to the Agency of reduced contributions.

As the movement in the asset ceiling between 01 April 2023 and 31 March 2024 amounts to a restated actuarial loss for 2023/24, which is reflected in other comprehensive expenditure, in accordance with International Accounting Standard 12 Taxes (IAS 12) the associated deferred tax credit must be recognised within other comprehensive expenditure, with the offsetting tax charge recognised within net expenditure for the year.

Financial statement line items affected
In respect of the Group Statements of Financial Position as at 31 March 2024 and 01 April 2023:

	Originally presented 31 March 2024 £’000	Prior period adjustment 31 March 2024 £’000	Restated 31 March 2024 £’000	Originally presented 01 April 2023 £’000	Prior period adjustment 01 April 2023 £’000	Restated 01 April 2023 £’000
Non-current assets
Pension assets	318,460	(316,907)	1,553	233,226	(231,431)	1,795
Total assets	21,458,944	(316,907)	21,142,037	23,297,256	(231,431)	23,065,825
Non-current assets plus net current assets	20,963,218	(316,907)	20,646,311	22,737,914	(231,431)	22,506,483
Assets less liabilities	20,934,357	(316,907)	20,617,450	22,701,911	(231,431)	22,470,480
Reserves
Income and expenditure reserve	20,934,357	(316,907)	20,617,450	22,701,911	(231,431)	22,470,480
Taxpayers’ equity	20,934,357	(316,907)	20,617,450	22,701,911	(231,431)	22,470,480

In respect of the Agency Statements of Financial Position as at 31 March 2024 and 01 April 2023:

	Originally presented 31 March 2024 £’000	Prior period adjustment 31 March 2024 £’000	Restated 31 March 2024 £’000	Originally presented 01 April 2023 £’000	Prior period adjustment 01 April 2023 £’000	Restated 01 April 2023 £’000
Non-current assets
Pension assets	318,460	(316,907)	1,553	233,226	(231,431)	1,795
Total assets	21,513,825	(316,907)	21,196,918	23,305,939	(231,431)	23,074,508
Non-current assets plus net current assets	20,961,776	(316,907)	20,644,869	22,730,880	(231,431)	22,499,449
Assets less liabilities	20,932,915	(316,907)	20,616,008	22,694,877	(231,431)	22,463,446
Reserves
Income and expenditure reserve	20,932,915	(316,907)	20,616,008	22,694,877	(231,431)	22,463,446
Taxpayers’ equity	20,932,915	(316,907)	20,616,008	22,694,877	(231,431)	22,463,446

In respect of the Group Statement of Net Comprehensive Expenditure for the year ended 31 March 2024:

	Originally presented 2023/24 £’000	Prior period adjustment 2023/24 £’000	Restated 2023/24 £’000
Net expenditure before tax	2,840,294	-	2,840,294
Income tax (credit)/charge	(14,962)	21,369	6,407
Net expenditure for the year	2,825,332	21,369	2,846,701
Other comprehensive expenditure
Actuarial loss/(gain) from pension fund	(77,037)	85,476	8,439
Income tax charge/(credit) on items in other comprehensive expenditure	19,259	(21,369)	(2,110)
Total comprehensive expenditure for the year	2,767,554	85,476	2,853,030

In respect of the Group and Agency Statements of Changes in Taxpayers’ Equity for the year ended 31 March 2024:

			Group			Agency
	Originally presented 2023/24 £’000	Prior period adjustment 2023/24 £’000	Restated 2023/24 £’000	Originally presented 2023/24 £’000	Prior period adjustment 2023/24 £’000	Restated 2023/24 £’000
Balance at 1 April	22,701,911	(231,431)	22,470,480	22,694,877	(231,431)	22,463,446
Net expenditure for the year	(2,825,332)	(21,369)	(2,846,701)	(2,819,740)	(21,369)	(2,841,109)
Actuarial gain/(loss) from pension fund	77,037	(85,476)	(8,439)	77,037	(85,476)	(8,439)
Income tax on items in other comprehensive expenditure	(19,259)	21,369	2,110	(19,259)	21,369	2,110
Total comprehensive expenditure for the year	(2,767,554)	(85,476)	(2,853,030)	(2,761,962)	(85,476)	(2,847,438)
Grant in Aid from sponsor department	1,000,000	-	1,000,000	1,000,000	-	1,000,000
Balance at 31 March	20,934,357	(316,907)	20,617,450	20,932,915	(316,907)	20,616,008

There was no impact on the Group Statement of Cash Flows.

See Note 18 for a breakdown of the 2023/24 asset ceiling amounts for each of the three individual pension schemes.

2. Operating Segments

a) Operating segment analysis

The Agency’s operational performance is managed by reference to financial and non-financial targets, within the constraints of programme and operational expenditure limits set by MHCLG. These programmes are managed with Directorates which therefore form the basis of the Agency’s operating segments as defined by IFRS 8 Operating Segments.

All of the Agency’s activities, and therefore its income, expenditure, assets and liabilities, occur within the UK. An analysis of the various types of income which the Agency receives is shown in the Statement of Comprehensive Net Expenditure.

As many of the Agency’s programmes do not generate their own revenue, and are financed by Grant in Aid, the financial measure used by the Board to assess the Agency’s operating performance and manage its resources is programme and administrative expenditure and receipts against Departmental Expenditure Limits (DEL). The programme and administrative expenditure and receipts information below is presented on the basis of the information presented to the Board.

			2024/25			2023/24 (re-presented)**
Programme	Expenditure £m	Receipts £m	Total £m	Expenditure £m	Receipts £m	Total £m
Help to Buy**	4.0	-	4.0	20.6	-	20.6
Investment**	594.1	(402.0)	192.1	420.3	(537.0)	(116.7)
Housing Infrastructure Grants**	657.7	(1.2)	656.5	470.3	-	470.3
Development**	242.7	(158.6)	84.1	180.1	(187.7)	(7.6)
Markets, Partners and Places	21.2	-	21.2	15.9	-	15.9
Affordable Housing**	2,405.2	(6.6)	2,398.6	2,011.3	(4.9)	2,006.4
First Homes	-	-	-	40.7	-	40.7
Building Safety and Remediation	162.8	-	162.8	41.4	-	41.4
Evolve Transformation Change Programme	34.3	-	34.3	25.6	-	25.6
Brownfield, Infrastructure and Land	184.9	(0.4)	184.5	32.9	-	32.9
Programme Administration	1.5	-	1.5	2.0	-	2.0
Total programme expenditure and receipts	4,308.4	(568.8)	3,739.6	3,261.1	(729.6)	2,531.5
Administration**	129.3	(274.5)	(145.2)	128.8	(232.6)	(103.8)
Total expenditure and receipts reported to Board	4,437.7	(843.3)	3,594.4	3,389.9	(962.2)	2,427.7
DEL not reported to the Board in respect of expected credit loss charges, write-off charges and DEL impairments*	(29.7)	-	(29.7)	66.8	-	66.8
Total net DEL	4,408.0	(843.3)	3,564.7	3,456.7	(962.2)	2,494.5

*Whilst expected credit losses, write-off charges and DEL impairments are not reported to Board as part of the monthly performance management information, they are sighted through reporting through various committees.
**The Agency receives RDEL (resource DEL) income on a number of programmes which, from a budgeting perspective, is treated as administration income. In the 2023/24 Annual Report, £232.6m of such RDEL income was originally presented in the receipts column against the programmes through which it arose; £83.1m for Help to Buy, £147.3m for Investment, £0.1m for Housing Infrastructure Grants, £0.4m for Development, and £1.7m for Affordable Housing. To better align this Note with the categorisation used internally by the Agency, for 2024/25 all such income has been presented in the ‘Administration’ line. To allow comparison with the 2024/25 disclosure, the £232.6m for 2023/24 has been re-presented from the programmes to the ‘Administration’ line.

b) Reconciliations to net expenditure

Net DEL expenditure, the financial measure used to report the Agency’s performance to the Board, excludes certain items which are disclosed separately in the Statement of Comprehensive Net Expenditure such as provisions for impairment, movements in other provisions, depreciation and income tax. It also includes items of expenditure which, for statutory reporting purposes, are capitalised in the Statement of Financial Position. Such items include additions to and disposals of non-current assets, loans and land and property assets. In addition, there are instances where there are timing differences between income and expenditure recognised for statutory reporting purposes and for DEL reporting, such as a restriction on recognising income on certain disposals until cash is received. For statutory reporting purposes income is recognised when the Agency is contractually entitled to receive the income. These rules are prescribed by HM Treasury.

A reconciliation of total DEL expenditure to net expenditure before tax as shown in the Statement of Comprehensive Net Expenditure is as follows:

	Note	2024/25 £m	2023/24 £m
Total net DEL expenditure above		3,564.7	2,494.5
Reconciling items:
Increase in write-down of land assets	16	178.3	130.6
Decrease/(reversal of decrease) in fair value below cost of assets measured at fair value passing through the SOCNE	12g	(141.3)	181.2
Reversal of increase/(increase) in fair value above initial cost of financial assets measured at fair value passing through the SOCNE		(264.0)	48.9
(Decrease)/Increase in provisions		(1.1)	(2.6)
Utilisation of provisions		(0.1)	(0.4)
Share of losses/(profits) of associates and joint ventures	11b	7.7	5.3
Impairment of investments in associates and joint ventures	11b	6.7	-
Investment in joint ventures	11b	(12.1)	(2.7)
Pension movements		(2.9)	(10.8)
Book value of land and property assets disposed	16	52.8	72.8
Book value of assets measured at fair value disposed	12g	2,048.1	1,396.3
Help to Buy and FirstBuy receipts not included within net DEL expenditure*	12g	(1,924.1)	(1,358.6)
Loan repayments (for loans measured at amortised cost)	12f	312.6	494.5
Capital items recorded as programme expenditure:
Additions to assets measured at fair value	12e	(120.0)	(74.1)
Additions to land and property assets	16	(322.5)	(202.3)
Loans advanced, including interest added to loans measured at amortised cost	12f	(510.7)	(326.1)
Additions to PPE and Intangible assets		(23.9)	(15.6)
Disposals of PPE and Intangible assets		1.6	-
Additions to long-term receivables		4.5	-
Recovery of long-term receivables recorded as programme income		1.7	9.4
Net expenditure before tax as stated in the Statement of Comprehensive Net Expenditure		2,856.0	2,840.3

*Help to Buy and FirstBuy receipts are not reported to the Agency’s Board as they are outside the scope of budgets delegated to the Agency to be managed. Cash received is transferred as Consolidated Fund Excess Receipts via the Ministry of Housing, Communities and Local Government to HM Treasury.

All of the income reflected in the Statement of Comprehensive Net Expenditure, with the exception of increases in fair value of financial assets measured at fair value through profit or loss, interest income and gains on disposal of financial assets arises from contracts with customers and is accounted for in line with International Financial Reporting Standard 15 Revenue from Contracts with Customers (IFRS 15). Programme and administration receipts reported to the Board materially comprises the proceeds from the disposal of land and property assets, interest income and the bulk of other operating income, which are income streams arising from contracts with customers and accounted for under IFRS 15, together with certain capital receipts, such as loan repayments, which are not reflected in the Statement of Comprehensive Net Expenditure and are not within the scope of IFRS 15. The vast majority of gains on the disposal of financial assets arise on the disposal of Help to Buy equity loans. These disposal receipts are not included in the Board reporting as they are outside of the scope of budgets delegated to the Agency to be managed.

A reconciliation of programme receipts as shown above to income as stated in the Statement of Comprehensive Net Expenditure is as follows:

	Note	2024/25 £m	2023/24 £m
Total receipts reported to the Board		843.3	962.2
Reconciling items:
Clawback of grants recorded as income but shown net within expenditure in Board reporting		48.8	49.5
Other income shown net within expenditure in Board reporting		1.1	1.6
Valuation gains on financial assets held at FVTPL not reported to Board		264.0	(48.9)
Recovery of long-term receivables recorded as programme income		(1.4)	(6.5)
Receipts from disposal of capital items recorded as programme income:
Proceeds from the disposal of financial asset investments measured at fair value	12g	(2,048.1)	(1,396.3)
Loan repayments (for loans measured at amortised cost)	12f	(312.6)	(497.2)
Joint venture disposal proceeds	11b	(4.4)	(12.6)
Help to Buy and FirstBuy receipts not included within DEL receipts*	12g	1,924.1	1,358.6
Income as stated in the Statement of Comprehensive Net Expenditure		714.8	410.4

*Help to Buy and FirstBuy receipts are not reported to the Agency’s Board as they are outside the scope of budgets delegated to the Agency to be managed. Cash received is transferred as Consolidated Fund Excess Receipts via the Ministry of Housing, Communities and Local Government to HM Treasury.

c) Impairment charges / (reversals) by operating segment

The impairment charges / (reversals) reflected in the Statement of Comprehensive Net Expenditure are attributed to the Agency’s operating segments as follows:

			2024/25			2023/24
Programme	Impairment of intangible assets* £m	Impairment of financial assets measured at amortised cost £m	Total £m	Impairment of intangible assets £m	Impairment of financial assets measured at amortised cost £m	Total £m
Investment	-	(30.3)	(30.3)	-	63.1	63.1
Development	-	(0.2)	(0.2)	-	0.5	0.5
Brownfield, Infrastructure and Land	-	0.8	0.8	-	-	-
Evolve Transformation Change Programme	6.3	-	6.3	-	-	-
Total	6.3	(29.7)	(23.4)	-	63.6	63.6

*The £6.3m impairment of intangible assets under Evolve has been recognised within programme costs in the Statement of Comprehensive Net Expenditure (please see Note 6).

d) Major customers

During the year, income from individual customers did not exceed 10% of total income (2023/24: nil).

3. Principal/Agent Relationships

Homes England is party to a number of significant arrangements where it acts as an Agent for another entity. In these arrangements, Homes England uses its skills and expertise to help bring forward programmes and initiatives. These programmes and initiatives are in addition to the core business of the Agency. It therefore would not be appropriate to show income or expenditure in respect of these transactions or to report on assets and liabilities. The below sets out these arrangements.

Managing programmes for MHCLG

The Agency has agreements with MHCLG for the management and delivery of their Cladding Fund, Building Safety Fund, Next Steps Accommodation, Rough Sleepers Accommodation and Single Homelessness Accommodation programmes:

Cladding Fund: the fund was set up to replace aluminium composite material (ACM) cladding panels on large-scale residential social housing and this has been extended to the private sector. During the year, grants totalling £12.0m (2023/24 £17.7m) were paid out by the Agency and reimbursed by MHCLG.

Building Safety Fund: This fund is focused on unsafe non-ACM cladding systems – high pressure laminates, other metal composite materials etc. – on both social and private sector buildings over 18m in height. The Fund opened to new applications in July 2022 for eligible buildings. During the year, grants of £138.7m (2023/24: £350.0m) were paid out by the Agency and reimbursed by MHCLG.

Next Steps Accommodation: Homes England is supporting MHCLG, leading housing associations and local authorities to deliver the ambitious plans which will fast-track thousands of long-term homes for rough sleepers. During the year, grants of £6.6m (2023/24: £6.6m) were paid out by the Agency and reimbursed by MHCLG.

Rough Sleepers Accommodation: Homes England is supporting MHCLG, leading housing associations and local authorities to deliver the ambitious plans which will fast-track thousands of long-term homes for rough sleepers. During the year, grants of £6.3m (2023/24: £17.6m) were paid out by the Agency and reimbursed by MHCLG.

Single Homelessness Accommodation: Homes England is supporting MHCLG, providing supported housing, Housing First and housing-led accommodation for two target groups: adults experiencing multiple disadvantages who may have a history of rough sleeping and require high levels of support, and young people at risk of or experiencing homelessness or rough sleeping. During the year, grants of £64.6m (2023/24: £21.9m) were paid out by the Agency and reimbursed by MHCLG.

Managing assets for third parties

The Agency manages home equity portfolios on behalf of the Greater London Authority (GLA), Ministry of Defence (MoD) and multiple housing developers via our mortgage administrator. At the year end the Agency managed 4,814 (2023/24: 5,204) assets on behalf of these parties. During the year the Agency also collected 390 (2023/24: 343) disposal receipts with total proceeds of £11.0m (2023/24: £9.2m). The mortgage administrator collects and distributes disposal receipts to the GLA and housing developers on behalf of the Agency. The Agency receives disposal receipts on behalf of the MoD and subsequently transfers the receipts to the MoD. At the year end the Agency held £0.9m (2023/24: £0.2m) which is due to be paid to the MoD.

The Agency manages one science park on behalf of the Department for Science, Innovation and Technology (DSIT). During the year the Agency incurred expenditure of £0.5m (2023/24: £0.4m) and collected income of £0.4m (2023/24: £2.0m) as a result of day-to-day management of the sites. The net expenditure of £0.1m is due to the Agency from DSIT.

MHCLG guarantee programmes

Homes England acts as licence or concession manager on behalf of MHCLG for a number of guarantee programmes:

Affordable Housing Guarantee Scheme 2013 - a £3.5bn programme to support the delivery of additional new-build affordable homes by enabling registered providers to borrow on a long-term fixed rate basis. The loans carry a government guarantee and the benefit of the guarantee is passed through to borrowers in the form of a lower cost of borrowing. This scheme is closed to new applications.

Private Rented Sector Guarantee Scheme - a £3.5bn programme to support the building of new homes for the private rented sector by enabling developers or investors to raise low cost debt to refinance development funding on a long-term basis. The scheme reopened in March 2025.

Affordable Homes Guarantee Scheme 2020 - this is a £6bn successor programme to the 2013 scheme and also provides low cost long-term loans to registered providers of homes for affordable social rent, affordable rent and shared ownership. It funds new homes and quality and energy efficiency improvements to existing homes.

Provision of shared services

In addition, the Agency continues to have a close working relationship with the Regulator of Social Housing (RSH). A service level agreement sets out the services provided by Homes England to RSH. Services provided may include, but are not limited to, the provision of accommodation or facilities, the provision of staff time and expertise and the provision of technical resources. During the year, Homes England has charged RSH a fee of £0.8m (2023/24: £1.0m) for these services, credited to other operating income. Invoices are raised and paid monthly. In addition, due to this close working relationship, the systems and processes of Homes England are an important part of the control environment of RSH, and as such, the annual statutory audit of RSH covers a review of the systems and processes. Further disclosure regarding this relationship is provided in the Fees and Charges section of the Annual Report.

4. Grants

Payments were made to registered providers of social housing, local authorities and other public and private sector partners under the following programmes:

	2024/25 £’000	2023/24 £’000
Affordable Housing:
Strategic Partnerships	1,780,027	1,529,396
Affordable Housing	673,783	528,518
Housing Infrastructure Fund	596,263	427,737
Cladding Safety Scheme	150,599	28,247
Brownfield, Infrastructure and Land	67,771	5,000
Other	8,922	21,127
City Growth Deals	8,761	13,172
First Homes	-	41,248
Local Authority Accelerated Construction	-	73
	3,286,126	2,594,518

The Agency’s largest grant programme is the Affordable Housing Grant programme. This aims to increase the supply of new affordable and shared ownership homes in England. Strategic Partnerships is part of the Affordable Housing Grant Programme; these partnerships provide additional support to registered providers for the construction of affordable homes.

The Housing Infrastructure Fund aims to unlock house building by funding local authorities to build vital physical infrastructure projects, including the construction of roads, bridges, energy networks and other utilities.

The Cladding Safety Scheme allows eligible building owners or their representative to come forward and apply for grant to help them pay for the costs associated with making a building safe in relation to fire risk. The scheme will focus its effort on making buildings safe from risk caused by unsafe cladding – providing funding for remediation of buildings over 11 metres (11-18 metres in London) with unsafe cladding.

Brownfield, Infrastructure and Land (BIL) is a £1 billion programme which will span Homes England’s land, grant and equity activities so it can better support the needs of places, partners and their projects. The primary objective of BIL is to bring forward strategic sites and housing-led opportunities which support economic growth and long-term housing supply, with at least 60% of activity focused on brownfield land (land that has been previously used and is now vacant, derelict and sometimes contaminated).

Other includes Markets, Partners and Places revenue grants to local authorities and land grants.

The First Homes scheme offers discounts to first time buyers, which means they may be able to buy a home for 30% less than the market value. The home can be a new home built by a developer, or a home you buy from someone else who originally bought it as part of the scheme. This is subject to eligibility criteria. Homes England was operating the pilot scheme which closed in September 2023. First Homes is still available through developers and local authorities.

The Local Authority Accelerated Construction programme closed in 2022/2023. The small amount of spend in 2023/24 relates to some legacy schemes that delivered spend/outputs in 2023/24.

Affordable Housing grant

Within the Affordable Homes Programme there are two routes to access funding. Providers can apply for funding on a scheme-by-scheme basis bidding through continuous market assessment, or providers can become a strategic partner and access grant for a longer-term development programme through a multi-year agreement. Both types are paid to partners across England.

Top 10 recipients of funding in the year ended 31 March 2025

Analysis of top 10 recipients of funding by counterparty in the year ended 31 March 2025	Exposure £’000	Percentage of total grant payments
Counterparty 1	126,944	3.9%
Counterparty 2	115,631	3.5%
Counterparty 3	114,842	3.5%
Counterparty 4	114,131	3.5%
Counterparty 5	90,484	2.8%
Counterparty 6	82,282	2.5%
Counterparty 7	80,209	2.4%
Counterparty 8	75,155	2.3%
Counterparty 9	74,067	2.3%
Counterparty 10	73,720	2.2%
Total top 10 counterparties in the year ended 31 March 2025	947,465	28.8%
Remaining grant payments in the year ended 31 March 2025	2,338,661	71.2%
Total grant payments in the year ended 31 March 2025	3,286,126	100.0%

5. Disposal of Land and Property Assets

	Note	2024/25 £’000	2023/24 £’000
Proceeds from disposals		104,338	119,632
Cost of disposals:
Book value of disposals	16	52,756	72,757
Direct costs of sale		3,015	2,325
		55,771	75,082
Gain on disposal		48,567	44,550

The proceeds from disposals can be further analysed as follows:

	2024/25 £’000	2023/24 £’000
Disposals of land (freehold disposal/building lease)	100,957	106,225
Direct Commissioning (market sales)	3,381	11,332
Direct Commissioning (affordable housing contracts)	-	2,075
Proceeds from disposals	104,338	119,632

Income from the disposals of land (freehold disposal/building lease) is recognised when there is a legally binding sale agreement, which has become unconditional and irrevocable by the end of the reporting period. The income is recognised at the unconditional date and measured at the fair value of the consideration received or receivable for the disposal of land. The income is from contracts with customers.

Income in relation to Direct Commissioning (market sales) is recognised at legal completion and measured at the fair value of the consideration received or receivable for the property.

Income in relation to Direct Commissioning (affordable housing contracts) is recognised over time by reference to the stage of completion of the contract activity at the Statement of Financial Position date. This is normally measured by compliance inspector reports of work performed to date. A contract asset is recognised when the Agency has completed a proportion of the contract activity prior to payment being received. A contract liability is recognised where cash has been received in advance of the contract activity being completed.

6. Programme Costs

	2024/25 £’000	2023/24 (re-presented)* £’000
Land	22,075	20,551
Evolve Transformation Change Programme	17,593	10,145
Markets, Partners and Places*	12,292	6,551
Cladding Safety Scheme	9,015	8,350
Financial Investment Programmes	8,331	7,950
Brownfield, Infrastructure and Land*	5,750	857
Managing programmes on behalf of MHCLG	3,751	5,679
Help to Buy	2,763	7,386
Housing Infrastructure Fund	2,529	2,276
Organisational Blueprint*	2,434	1,320
Strategy Research Analysis Sponsorship	932	1,154
Affordable Homes	179	1,918
	87,644	74,137

*Brownfield, Infrastructure and Land (BIL) and Organisational Blueprint (OB) are now presented separately. Previously, BIL and OB amounts were presented within Markets, Partners and Places. The 2023/24 comparatives have been re-presented accordingly.

Programme costs are the operational costs incurred by Homes England to run the various programmes. They are typically professional fees to cover activities such as due diligence, legal advice, financial investigation, administration of payments, and property servicing.

The Evolve Transformation Change Programme was a specific programme funded by MHCLG to support the Agency in meeting its mission and objectives by creating new, more efficient services, teams, infrastructure and ways of working. In the current year there has also been £14.3m (2023/24: £14.1m) of capital expenditure incurred in relation to Evolve. Evolve costs includes a £6.3m impairment in relation to intangible assets.

Note 3 details the programmes that Homes England manages for MHCLG and other government departments. The costs included within programme costs above are the staff costs and professional fees associated with these programmes.

7. Staff Costs

The costs of salaried staff for the year, excluding Board members, were as follows:

a) Total staff costs

	2024/25 £’000	2023/24 £’000
Staff costs charged to net expenditure comprise:
Staff costs	74,338	79,831
Pension costs	14,185	21,177
Total staff costs	88,523	101,008

The costs can be further analysed as follows:

	2024/25 £’000	2023/24 £’000
Salaries and wages	85,961	79,472
Social security costs	10,096	8,984
Pension costs - current service cost*	11,562	18,595
Pension costs - past service cost and losses on curtailments and settlements	-	7
Pension costs - expenses	2,623	2,575
	110,242	109,633
Temporary staff	10,930	14,265
Seconded staff	410	249
	121,582	124,147
Less staff costs capitalised: land and property	(11,337)	(12,104)
Less staff costs transferred to programme costs	(21,722)	(11,035)
	88,523	101,008
Non-Executive Board member expenses	-	-

*The current service pension cost does not include costs relating to early retirements, which are included within administration expenditure, Note 8.

During the year, £11.3m of staff costs were capitalised (2023/24: £12.1m) against Land and property assets. The costs relate to direct labour involved in the enhancement of land and property assets.

In addition, the below staff costs were reclassified to programme costs. These programmes are partly funded by the Agency’s programme budget.

	2024/25 £’000	2023/24 £’000
Markets, Partners and Places	7,310	-
Evolve Transformation Change Programme	5,724	6,174
Cladding Safety Scheme	2,986	-
Building Safety Fund	2,692	3,839
Brownfield, Infrastructure and Land	681	-
Next Steps Accommodation Programme	609	830
Organisational Blueprint	612	-
Housing Infrastructure Fund	506	-
Financial Investment Programmes	289	-
Private Sector Cladding	161	192
Help to Buy	95	-
Affordable Homes	57	-
	21,722	11,035

b) Staff bonuses

Staff members who are direct employees of the Agency benefit from a performance related pay scheme whereby any bonuses are determined with reference to performance against agreed objectives during the year. Performance related pay accrued but not yet paid during the year totalled £0.4m (2023/24: £0.3m).

During the year, executive directors received bonuses of £35k (2023/24: £32k). The bonuses received during the year relate to 2023/24 performance. The Accountability section of the Annual Report includes further details of bonuses, the average number of staff employed by the Agency, staff numbers by pay band and exit packages.

c) Staff composition

The average number of staff employed by the Agency (full time equivalents) over the course of the year is as follows:

	2024/25 Number	2023/24 Number
Permanent UK staff	1,332	1,259
Fixed term UK staff	78	89
Temporary staff	95	142
Board members	12	9
Seconded staff	4	3
	1,521	1,502

d) Loans to employees

The Agency has provided travel season ticket loans, cycle scheme loans and electric vehicle charge point loans to employees during the year. The total amount outstanding in respect of these at 31 March 2025 was £67k (2023/24: £44k). There were no other loans to employees.

8. Administration Expenditure

	2024/25 £’000	2023/24 £’000
Accommodation and office running costs	11,118	9,999
Depreciation and amortisation	8,062	5,111
Travel and subsistence	3,729	3,876
Professional fees	3,590	3,508
Staff welfare, learning and development	2,397	1,917
Taxation not recoverable	1,463	2,676
Other	810	631
Auditor’s remuneration (Statutory Audit)	630	575
	31,799	28,293

Included within Other is £nil (2023/24: £305k) relating to restructuring costs (payment in lieu of notice, enhancements, redundancy). The Accountability section of the Annual Report includes further details of exit packages.

9. Other Operating Income

	Note	2024/25 £’000	2023/24 £’000
Homeowner fees	12g	129,326	87,579
Grant clawback		59,420	51,442
Other		6,051	7,698
Rent and property income		4,708	4,770
		199,505	151,489

Homeowner fees represent income due from homeowners who have acquired a home via the Help to Buy equity loan scheme or other historic equity loan schemes. In relation to the Help to Buy equity loan scheme, from the fifth anniversary of ownership, interest is due, calculated as 1.75% of the loan outstanding (applied monthly). The interest rate increases each year by RPI +1%.

Grant clawback mostly comprises grant recovered from registered providers of social housing via the Affordable Homes Programme. Clawback may arise where the recipient of grant funding does not meet the conditions set out in the grant agreement resulting in recovery.

Other includes income from investments, income charged to the Regulator of Social Housing in respect of services provided, planning windfall income (where a developer buys land which subsequently receives planning permission, increasing its value and the Agency shares in this uplift in value) and other windfall income (where the legal restriction on land sold is varied resulting in income to the Agency).

10. Share of Profits and Losses of Associates and Joint Ventures

The aggregated amounts of the Group’s share of results of associates and joint ventures (JVs) included in the Statement of Comprehensive Net Expenditure is as follows:

	2024/25 £’000	2023/24 £’000
Share of results of associates	(3,785)	(4,089)
Share of results of joint ventures	(3,982)	(1,228)
Share of profits/(losses) of associates and joint ventures	(7,767)	(5,317)

The aggregate share of results is the net profit or loss from continuing operations. There was no profit or loss from discontinued operations and no other comprehensive income was recognised in the year.

11. Investments in Subsidiaries, Associates and Joint Ventures

a) Subsidiary undertakings - Agency

Cost	2024/25 £’000	2023/24 £’000
At 1 April	100,000	50,000
Investments in the year	-	50,000
Redemptions	-	-
At 31 March	100,000	100,000

The Agency invested an additional £50m in its wholly owned subsidiary, English Partnerships (LP) Ltd, in January 2024.

During the year, the Agency held interests in the following subsidiaries, each of which are registered in England and Wales and are wholly owned by the Agency:

Name of undertaking	Share capital	Nature of business
English Partnerships (LP) Ltd	£100,000,000	Investment holding company
AWM (Subsidiary) Ltd	£1	Investment holding company
Norwepp (NWDA subsidiary) Ltd	£500	Investment holding company
ONE NorthEast General Partner Ltd	£100	Investment holding company
The Estuary Management Company Ltd	£1	Property management company
Blandford Brewery Estate Management Company Limited	£0	Property management company
Cambridge Growth Company Limited	£0	Property management company

The property management companies are held as non-profit making entities to manage shared costs. Other than English Partnerships (LP) Ltd, all of the remaining investment holding companies are dormant.

As of May 2025, both AWM (Subsidiary) Ltd and ONE NorthEast General Partner Ltd are subject to active proposals to be struck off the register at Companies House due to prolonged inactivity.

Cambridge Growth Company Limited, a company limited by guarantee, was incorporated on 15 May 2024.

Homes England’s subsidiary undertakings are exempt from the requirements of the Companies Act 2006 relating to audit of individual financial statements by virtue of Section 479A of the Act.

Only English Partnerships (LP) Ltd is consolidated into these Group Financial Statements. The transactions and balances for all other subsidiaries are wholly immaterial.

b) Associated undertakings and joint ventures - Group and Agency

The aggregated movements in the Group’s share of net assets of associates and joint ventures are as follows:

Cost or valuation	Note	Group 2024/25 £’000	Group 2023/24 £’000	Agency 2024/25 £’000	Agency 2023/24 £’000
At 1 April		59,303	61,932	14,184	20,615
Investments in the year		16,464	15,325	2,722	19
Redemptions		(4,374)	(12,637)	(3,000)	(6,450)
Share of (losses)/profits of associates and joint ventures	10	(7,767)	(5,317)	-	-
Impairment of investments in associates and joint ventures		(6,678)	-	-	-
At 31 March		56,948	59,303	13,906	14,184

In 2024/25, £3.0m (2023/24: £9.7m) was received in dividends from group companies and treated as redemptions under the equity method per IAS 28.

In January 2024, the Agency committed an additional £50m of funding to English Cities Fund, via the subsidiary English Partnerships (LP) Ltd. This included an additional capital payment of £5k. The Agency is committed to the English Cities Fund up to December 2036.

In 2024/25, £13.7m (2023/24: £15.3m) of committed funding was invested by English Partnerships (LP) Ltd, our wholly owned subsidiary, into English Cities Fund. There have been £1.4m (2023/24: £2.9m) of repayments of funding made during the year.

In 2024/25 an impairment of £6.7m was recognised on a joint venture investment following an updated assessment of the recoverable value.

The aggregated amounts of the Group’s share of net assets and liabilities of associates and JVs are as follows:

	2024/25 £’000	2023/24 £’000
Group share of net assets of associates	52,091	40,786
Group share of net assets of joint ventures	4,857	18,517
Group share of net assets of associates and joint ventures	56,948	59,303

During the year, the Group had interests in the following associated undertakings and joint ventures, all of which are registered or resident in England and Wales:

Name of undertaking	Group/Agency	Interest	Nature of business
English Cities Fund Limited Partnership	Group	48%	Property development
Tilia Community Living LLP (Joint venture)	Agency	26%	Property development
Newton Development Partners LLP (Joint venture)	Agency	25%	Property development
MADE Partnership LLP* (Joint venture)	Agency	33%	Property development
Habiko LLP** (Joint venture)	Agency	33%	Property development
Juniper JVCO Limited*** (Joint venture)	Agency	20%	Property development
Countryside Maritime Limited (Joint venture)	Agency	50%	Development of land
Temple Quay Management Limited	Agency	24%	Property management company
Kings Waterfront (Estates) Limited	Agency	50%	Property management company
Pride in Camp Hill	Agency	33%	Regeneration of Camp Hill area of Nuneaton
Bristol Temple Quarter LLP (Joint venture)	Agency	33%	Regeneration of Bristol Temple Quarter

*During the year, the Agency entered into a partnership agreement to invest equity funding in a joint venture, MADE Partnership LLP. At the year end, the joint venture had been established and £1 had been invested by the Agency. The carrying value of the investment at the year end reflects the discounted future cash flows associated with the interest free loan.
**During the year, the Agency entered into a partnership agreement to invest equity funding in a joint venture, Habiko LLP. At the year end, the joint venture had been established and £61k had been invested by the Agency.
* * *During the year, the Agency entered into a partnership agreement to invest equity funding in a joint venture, Juniper JVCO Ltd. At the year end, the joint venture had been established and £1.8m had been invested by the Agency.

c) Commitments for associated undertakings and joint ventures - Group and Agency

In 2023/24, the Group committed to invest a further £50.0m into English Cities Fund. During 2024/25, £13.7m (2023/24: £15.3m) has been drawn down from the total commitment. As a result of the net drawdowns and repayments at 31 March 2025 there is a balance of £24.3m available to be drawn.

In 2022/23, the Agency committed £50.0m of funding to Newton Development Partners LLP. During 2024/25, £nil (2023/24: £19k) was drawn down. As a result of drawdowns at 31 March 2025 there is a balance of £50m available to be drawn.

In 2024/25, the Agency committed £50.0m of funding to MADE Partnership LLP. At 31 March 2025 £1 had been drawn down in equity funding and £3.4m had been drawn down in loan funding. As a result of drawdowns at 31 March 2025 there is a balance of £46.6m available to be drawn.

In 2024/25, the Agency committed £18.0m of funding to Habiko LLP. At 31 March 2025 £61k had been drawn down. As a result of drawdowns at 31 March 2025 there is a balance of £17.9m available to be drawn.

In 2024/25, the Agency committed £50.0m of funding to Juniper JVCO Ltd. At 31 March 2025 £1.8m had been drawn down in equity funding and £7.4m had been drawn down in loan funding. As a result of drawdowns at 31 March 2025 there is a balance of £40.8m available to be drawn.

12. Financial Assets

				2024/25			2023/24
	Note	Fair value £’000	Amortised cost £’000	Total £’000	Fair value £’000	Amortised cost £’000	Total £’000
Cash and cash equivalents	a)	-	388,501	388,501	-	166,687	166,687
Trade and other receivables	b)	219,890	114,621	334,511	254,906	172,157	427,063
Financial asset investments	d)	16,712,231	1,416,852	18,129,083	18,204,988	1,187,074	19,392,062
		16,932,121	1,919,974	18,852,095	18,459,894	1,525,918	19,985,812

a) Cash and cash equivalents - Group and Agency

	2024/25 £’000	2023/24 £’000
Cash held with Government Banking Service	275,636	74,388
Cash held with commercial banks	114	93
Cash held with third parties	112,751	92,206
	388,501	166,687

The Agency draws Grant in Aid from MHCLG on a monthly basis which is received on the eighth working day. At 31 March the Agency held cash balances to enable it to meet its short-term cash requirements until receipt of the next instalment of Grant in Aid.

The cash figure takes account of BACS payments initiated by 31 March 2025 to settle short-term liabilities, but not cleared by 31 March 2025. These payments totalled £62.3m (2023/24: £87.9m) and cleared the bank in early April 2025. There were no cash equivalents at any of the reporting dates shown.

Cash held with third parties covers amounts retained by external legal firms and the Agency’s mortgage administrator for home equity investments. Cash is held to Homes England’s order.

b) Trade & other receivables - Group and Agency

			2024/25			2023/24
	Non-current assets £’000	Current assets £’000	Total £’000	Non-current assets £’000	Current assets £’000	Total £’000
Fair value
Land sale receivables	108,599	89,990	198,589	132,405	108,951	241,356
Other receivables and prepayments	-	21,301	21,301	-	13,550	13,550
Total trade and other receivables measured at fair value through profit or loss	108,599	111,291	219,890	132,405	122,501	254,906
Amortised cost
Gross balances
Land sale receivables	2,611	3,826	6,437	-	4,787	4,787
Direct Commissioning	-	-	-	-	59,585	59,585
Taxes and social security	-	21,473	21,473	-	2,624	2,624
Other receivables and prepayments	11,012	75,927	86,939	8,369	97,247	105,616
	13,623	101,226	114,849	8,369	164,243	172,612
Expected credit loss allowances	-	(228)	(228)	-	(455)	(455)
Total net trade and other receivables measured at amortised cost	13,623	100,998	114,621	8,369	163,788	172,157
Total trade and other receivables	122,222	212,289	334,511	140,774	286,289	427,063
Of which:
Fair value
Balances with private sector counterparties	108,599	111,291	219,890	132,405	122,108	254,513
Balances with public sector counterparties	-	-	-	-	393	393
	108,599	111,291	219,890	132,405	122,501	254,906
Amortised cost
Balances with private sector counterparties	13,268	32,702	45,970	8,369	98,014	106,383
Balances with public sector counterparties	355	68,296	68,651	-	65,774	65,774
	13,623	100,998	114,621	8,369	163,788	172,157

Land sale receivables

Land sale receivables are measured with reference to the underlying agreement. As highlighted in Note 1l, in most cases the inclusion of an overage clause within the land sale agreement requires the receivable to be measured at fair value through profit or loss (FVTPL). Where the contractual terms give rise to cash flows that are solely payments of the principal amount these are measured at amortised cost.

Direct Commissioning

Direct Commissioning receivables represent amounts due from unit sales and accrued income due under contracts to develop multi-unit properties from projects managed under the Direct Commissioning programme. They are measured at amortised cost. Direct Commissioning receivables and payables were fully settled in 2024/25.

Other receivables and prepayments

Other receivables held at FVTPL relate to home equity management fees and interest. The remainder of other receivables are held at amortised cost and include amounts due from MHCLG for programmes delivered on their behalf, utility prepayments, trade receivables and other smaller balances.

Credit risk of receivables classified to FVTPL

The Agency is exposed to credit risk in relation to receivables measured at FVTPL. The credit risk exposure at the year end is £232.8m (2023/24: £267.8m).

c) Movements in trade and other receivables measured at fair value - Group and Agency

			Level 3
	Land sale receivables £’000	Other receivables and prepayments £’000	Total £’000
Balances as at 1 April 2023	269,791	12,179	281,970
Additions	66,216	87,579	153,795
Disposals	(99,294)	(83,113)	(182,407)
Increase in fair value above initial cost	4,643	-	4,643
Decrease in fair value below initial cost	-	(3,095)	(3,095)
Balances as at 31 March 2024	241,356	13,550	254,906
Additions	57,898	129,326	187,224
Disposals	(104,478)	(121,344)	(225,822)
Increase in fair value above initial cost	3,813	-	3,813
Decrease in fair value below initial cost	-	(231)	(231)
Balances as at 31 March 2025	198,589	21,301	219,890

d) Financial asset investments - Group and Agency

				2024/25			2023/24
	Fair value hierarchy	Non-current assets £’000	Current assets £’000	Total £’000	Non-current assets £’000	Current assets £’000	Total £’000
Financial asset investments measured at fair value through profit or loss
PRS REIT	Level 1	24,539	10,000	34,539	23,754	-	23,754
Help to Buy equity loans	Level 2	15,917,039	-	15,917,039	17,441,103	-	17,441,103
Other legacy equity loans	Level 2	180,556	-	180,556	183,804	-	183,804
Infrastructure loans	Level 3	298,859	14,104	312,963	258,011	11,223	269,234
Development loans	Level 3	2,048	21,765	23,813	17,684	23,500	41,184
Other loans	Level 3	13,186	539	13,725	7,691	293	7,984
Development and infrastructure equity	Level 3	82,277	15,587	97,864	63,457	59,555	123,012
Managed funds	Level 3	83,501	5,545	89,046	69,280	8,170	77,450
City Growth Deals	Level 3	28,288	945	29,233	29,011	1,018	30,029
Other equity	Level 3	2,168	6,434	8,602	2,250	186	2,436
Overage	Level 3	1,005	3,846	4,851	1,441	3,557	4,998
Total financial asset investments measured at fair value through profit or loss		16,633,466	78,765	16,712,231	18,097,486	107,502	18,204,988
Financial asset investments measured at amortised cost
Infrastructure loans		605,021	196,068	801,089	618,951	45,245	664,196
Development loans		42,121	325,064	367,185	98,524	303,557	402,081
Other loans		226,496	22,082	248,578	115,256	5,541	120,797
Total financial asset investments measured at amortised cost		873,638	543,214	1,416,852	832,731	354,343	1,187,074
Total financial asset investments		17,507,104	621,979	18,129,083	18,930,217	461,845	19,392,062
Of which:
Financial asset investments measured at fair value through profit or loss
Balances with private sector counterparties		16,576,249	68,216	16,644,465	18,046,793	92,259	18,139,052
Balances with public sector counterparties		57,217	10,549	67,766	50,693	15,243	65,936
		16,633,466	78,765	16,712,231	18,097,486	107,502	18,204,988
Financial asset investments measured at amortised cost
Balances with private sector counterparties		868,130	540,482	1,408,612	828,658	352,680	1,181,338
Balances with public sector counterparties		5,508	2,732	8,240	4,073	1,663	5,736
		873,638	543,214	1,416,852	832,731	354,343	1,187,074

Investments measured at fair value

Financial assets measured at fair value through profit or loss are stated at fair value in accordance with International Financial Reporting Standard 13 Fair Value Measurement (IFRS 13) and relate to the following:

• PRS REIT: An investment in shares issued by the PRS REIT plc, supporting the launch of the first quoted Real Estate Investment Trust to focus purely on the private rented sector;

• Help to Buy and other legacy equity loans: The Agency’s entitlement to future income arising from financial assistance provided to homebuyers to enable them to buy homes, the majority of which arises from the Help to Buy scheme. Other legacy equity loans consist of amounts due from homebuyers in relation to the following legacy equity schemes - First Buy: £40.9m (2023/24: £41.7m), Home Buy Direct and Kickstart Home Buy Direct: £79.3m (2023/24: £81.1m), FTBI: £57.5m (2023/24: £58.2m), and amounts due in relation to deferred land charges of £2.9m (2023/24: £2.8m);

• Infrastructure, development, and other loans: There are a number of loans which are measured on a fair value basis under the Level 3 hierarchy as they do not clearly meet the requirements under International Financial Reporting Standard 9 Financial Instruments (IFRS 9) to be described as basic lending arrangements. Development loans have been made to private sector developers in order to bring forward the development of housing under the Home Building Fund. Infrastructure loans have been made to private sector developers and local authorities in order to fund infrastructure on stalled sites, or to unlock potential development sites under the Home Building Fund. Other loans mainly relate to commercial non-site specific loans, such as corporate type facilities;

• Development and infrastructure equity, City Growth Deals and other equity: Investments in development and infrastructure projects under which the Agency benefits from variable returns based on income generated by the project funding, including projects with both the private sector and local authorities, some of which have arisen under City Growth Deals entered into to support the Government’s aim of promoting localism. The Agency has also invested capital into funds and has invested as a minority shareholder, and will receive returns from these investments based on the performance of the underlying investments or vehicle;

• Managed funds: Investments in Housing Growth Partnership, operated by Lloyds Banking Group;

• Overage: Future receipts due from the disposal of land to third parties, where the Agency includes contractual provisions in line with Managing Public Money to protect the public interest by requiring additional overage payments to be made where developments are more profitable than envisaged when the initial disposal consideration was agreed.

Assets measured at fair value through profit or loss are carried at fair value, using the valuation methods described in Note 13. Following initial recognition, all movements in the fair value of these assets are recognised in net expenditure. On disposal of the related assets, the net difference between proceeds and the carrying value of the asset is recognised in net expenditure.

Investments measured at amortised cost

These assets are measured at amortised cost where they meet the criteria of solely payments of principal and interest (SPPI) and therefore meet the requirement to be described as a basic lending arrangement under IFRS 9.

Development loans have been made to private sector developers in order to bring forward the development of housing under the Agency’s programmes, including the Home Building Fund and the Levelling Up Home Building Fund. These loans are repayable during periods ranging up to 2033. Infrastructure loans have been made to private sector developers and local authorities in order to fund infrastructure on stalled sites, or to unlock potential development sites. These loans are repayable during periods ranging up to 2034. Other loans include £22.9m of loans made to utility companies (2023/24: £23.9m) in respect of water infrastructure for new town developments (due for redemption by 2053), and £4.4m of loans made to local authorities (2023/24: £4.3m) which are repayable during periods ranging up to 2036. Other loans also include amounts due to the Agency in relation to loans provided under the Home Building Fund, the Levelling Up Home Building Fund and the Brownfield, Infrastructure and Land Fund totalling £219.7m (2023/24: £94.4m) and mainly relate to commercial non-site specific loans, such as corporate type facilities. These loans are due over periods up to 2035. Loans made of £2.4m in respect of City Growth Deals (2023/24: £nil) are repayable up to 2025.

Current and non-current split

For most financial asset investment classes, the Agency provides a best estimate of the portion of the total balance expected to be settled within twelve months of the year end based on cash flow forecasts. These cash flow forecasts take into account contractual terms, including repayment dates.

For home equity assets (being Help to Buy equity loans and other legacy equity loans), the proportion that will be redeemed within twelve months depends on when homeowners choose to sell their properties or make staircasing payments. The Agency cannot know what choices homeowners will make in advance of them being made. While the Agency internally estimates redemptions for the following financial year using historic data and trends, these estimates can be materially different to the redemptions that actually occur. As a result, the Agency opts to present all of its home equity assets as non- current, which also reflects the contractual final redemption dates for all outstanding home equity loans.

e) Movements in financial asset investments measured at fair value - Group and Agency

	Level 1		Level 2			Level 3
	Shares held in The PRS REIT plc £’000	Help to Buy equity loans £’000	Other legacy equity loans £’000	Loans at FVTPL* £’000	Other investments £’000	Total £’000
Balances as at 1 April 2023	24,172	18,934,182	195,791	344,787	233,415	19,732,347
Additions	-	9,731	-	41,088	23,256	74,075
Disposals	-	(1,318,848)	(10,956)	(36,154)	(30,434)	(1,396,392)
Increase/(reversal of increase) in fair value above initial cost	-	(51,628)	(1,039)	17,661	14,769	(20,237)
(Decrease)/reversal of decrease in fair value below initial cost	(418)	(132,334)	8	(48,980)	(3,083)	(184,807)
Balances as at 31 March 2024	23,754	17,441,103	183,804	318,402	237,923	18,204,986
Additions	-	628	-	73,452	45,896	119,976
Disposals	-	(1,925,504)	(13,598)	(46,540)	(62,454)	(2,048,096)
Increase/(reversal of increase) in fair value above initial cost	4,538	235,079	10,344	34,898	8,985	293,844
(Decrease)/reversal of decrease in fair value below initial cost	6,247	165,733	6	(29,711)	(754)	141,521
Balances as at 31 March 2025	34,539	15,917,039	180,556	350,501	229,596	16,712,231

*Loans measured at FVTPL because the contractual terms of the loan do not give rise to cash flows on specified dates which are solely payments of principal and interest on the principal amount outstanding. This category includes Development, Infrastructure and Other Loans, the nature of which is described in Note 12d.

Other investments include development and infrastructure equity, overage and other equity, the nature of which is defined within Note 12d.

Movements in fair value on Help to Buy equity loans are mainly a result of the increase in house prices observed since March 2024.

Sensitivity of the valuation of assets held at fair value under the Level 2 and Level 3 hierarchy

The valuation of the Agency’s equity loan mortgage portfolio is highly sensitive to changes in assumptions, in particular about market prices. Analysis showing the sensitivity of the portfolio valuation of these assets to market prices is shown in Note 15a. The sensitivity of the Help to Buy valuation to the Agency’s modelling assumptions is analysed in Note 15a. As described in Note 12d, the investments categorised under the Level 3 fair value hierarchy are not homogeneous in nature, therefore the underlying inputs used within the calculation of fair value vary depending on the nature of the asset. This category of assets is therefore sensitive to a range of underlying inputs which are not necessarily common across the Level 3 portfolio. A sensitivity analysis has been performed in Note 14a to demonstrate the impact of an increase or decrease in development returns.

Using economic scenarios produced by the Agency which account for the key economic risks and macroeconomic uncertainty facing the Agency, further analysis has been undertaken in the Performance Report section of the Annual Report in relation to the impact of these scenarios on the valuation of the Agency’s assets which are held at fair value under the Level 2 and Level 3 hierarchy.

Credit risk of loans classified to FVTPL

The Agency is exposed to credit risk in relation to loans classified as FVTPL. The credit-risk exposure at 31 March 2025 in relation to these investments is £640.7m (2023/24: £574.8m).

f) Movements in financial asset investments measured at amortised cost - Group and Agency

	Development loans £’000	Infrastructure loans £’000	Other loans £’000	Total £’000
Gross balances as at 1 April 2023*	500,245	883,587	97,282	1,481,114
Additions	170,711	36,463	30,946	238,120
Repayments	(240,613)	(246,871)	(7,027)	(494,511)
Interest added to loans	40,605	44,318	3,054	87,977
Amounts (written-off)/written back, including modification gains and losses	(40,801)	(10,501)	(1,589)	(52,891)
Gross balances as at 31 March 2024*	430,147	706,996	122,666	1,259,809
Interest accrued but not yet added to loans at 31 March 2024**	1,596	4,087	415	6,098
Expected credit loss allowances	(29,662)	(46,887)	(2,284)	(78,833)
Net balances as at 31 March 2024	402,081	664,196	120,797	1,187,074

	Development loans £’000	Infrastructure loans £’000	Other loans £’000	Total £’000
Gross balances as at 1 April 2024*	430,147	706,996	122,666	1,259,809
Additions	182,113	100,806	139,781	422,700
Repayments	(249,598)	(45,520)	(17,446)	(312,564)
Interest added to loans	32,611	50,907	4,474	87,992
Amounts (written-off) / written back, including modification gains and losses	(23,977)	203	-	(23,774)
Gross balances as at 31 March 2025*	371,296	813,392	249,475	1,434,163
Interest accrued but not yet added to loans at 31 March 2025**	3,272	3,194	1,677	8,143
Expected credit loss allowances	(7,383)	(15,497)	(2,574)	(25,454)
Net balances as at 31 March 2025*	367,185	801,089	248,578	1,416,852

*Gross balances exclude expected credit loss allowances and interest accrued but not yet added to loans, but include the effect of amounts which have been considered to have been written-off as irrecoverable or which have been recognised as modification gains or losses where an agreement has been varied. Net balances include the effect of applying expected credit loss allowances.
**Interest accrued but not yet capitalised of £nil was written off during 2024/25 (2023/24: £nil).

It is a requirement of International Financial Reporting Standard 7 Financial Instruments: Disclosures (IFRS 7) that for each class of financial instruments the fair value of these assets is disclosed. For assets held at amortised cost, it is considered that the amortised cost carrying value after adding back the expected credit loss allowance is an appropriate proxy for fair value. This value was £1,442m at 31 March 2025 (£1,266m at 31 March 2024).

Sensitivity of expected credit losses to modelling assumptions

IFRS 9 requires an expected credit loss allowance calculation to be performed with reference to the level of credit risk and performance of each investment. The determination of the risk associated with each asset is a key judgement by management as the result determines whether a 12 month loss allowance or a lifetime loss allowance is calculated for that asset. The expected credit losses are calculated by comparing the estimated balance at the time of default against moderated security values (calculated by applying modified security value percentages (MSVs) to gross security values to estimate the likely value which might be realised from a sale of security in distressed circumstances). A minimum loss on default value of 35% is applied (see accounting policies - Loss given default (LGD) floor). This is then multiplied against an associated probability of default percentage value (PD) for the relevant loss calculation period. The PD value applied is determined based on the credit risk rating of the associated asset using industry metrics for default.

In addition to calculating either 12 month or lifetime loss allowances, IFRS 9 also requires consideration of how the calculation would vary under alternative economic scenarios. The Agency achieves this by varying the application of PD assumptions to the same base loan data. In addition, the Agency varies the MSVs applied to the ECL allowance calculation performed under each economic scenario, to reflect the relative expected discount on gross security values in a distressed situation for each economic scenario. The results calculated for each scenario are then used to calculate an unbiased, weighted-average loss allowance. This is done by using the relative likelihood of each scenario, based on the Agency’s view of their relative probability.

The expected credit loss model is highly sensitive to these modelling assumptions, which are therefore considered to be a key judgement of management. To analyse the impact of the key assumptions applied at 31 March 2025, a sensitivity analysis has been performed in Note 15b, which also provides an overview of the key modelling assumptions and how they are applied.

g) Summary of movements recognised in consolidated net expenditure in relation to financial assets

	Note	2024/25 £’000	2023/24 £’000
Movements in net expenditure in relation to assets held at fair value
Increase/(reversal of increase) in fair value above initial cost on financial asset investments held at FVTPL	12e	293,844	(20,237)
Increase in fair value above initial cost on receivables held at FVTPL	12c	3,813	4,643
(Decrease)/reversal of decrease in fair value below initial cost on financial asset investments held at FVTPL	12e	141,521	(184,807)
Decrease in fair value below initial cost on receivables held at FVTPL	12c	(231)	(3,095)
Gain/(loss) on disposal against fair value		(6,047)	36,735
Monthly fees recognised on Help to Buy equity loans		125,328	81,778
Monthly fees recognised on other legacy equity loans		3,998	5,801
Movements in net expenditure in relation to assets held at amortised cost
Interest on loans		119,329	117,799
Interest on receivables		-	333
Credit impairment loss (charges)/reversals, including modification (losses)/gains		29,714	(63,645)
Net (expenditure)/income recognised in consolidated net expenditure		711,269	(24,695)

There have been reversals of previous valuation decreases and increases in fair value above cost for financial assets measured at FVTPL.

The movements in fair value of financial assets held at FVTPL are primarily caused by movements in fair value on the Help to Buy portfolio which has benefited from an increase in house prices in 2024/25.

Gain/(loss) on disposal of financial asset investments

2024/25	Help to Buy equity loans £’000	Other legacy equity loans £’000	Loans at FVTPL £’000	Other investments £’000	Total £’000
Proceeds from disposals	1,919,304	13,751	46,540	62,454	2,042,049
Fair value of assets disposed	1,925,504	13,598	46,540	62,454	2,048,096
Gain/(loss) on disposal against fair value	(6,200)	153	-	-	(6,047)

2023/24	Help to Buy equity loans £’000	Other legacy equity loans £’000	Loans at FVTPL £’000	Other investments £’000	Total £’000
Proceeds from disposals	1,355,373	11,166	36,154	30,434	1,433,127
Fair value of assets disposed	1,318,848	10,956	36,154	30,434	1,396,392
Gain/(loss) on disposal against fair value	36,525	210	-	-	36,735

Credit impairment loss charges to net expenditure in relation to assets held at amortised cost

	2024/25 £’000	2023/24 £’000
Net movements in expected credit loss allowances	(53,606)	9,865
Amounts written-off/(written-back) loan balances	21,634	49,663
Modification losses/(gains)	2,140	3,228
Amounts written-off on receivable balances	118	889
Total credit impairment loss charges/(credits)	(29,714)	63,645

h) Write-offs at the reporting date

Movement in write-off allowances during 2024/25

	Allowances at 1 April 2024 £’000	Recognised £’000	Written-back £’000	Utilised £’000	Allowances at 31 March 2025 £’000
Financial asset investments at amortised cost	85,077	22,209	(575)	(122)	106,589
Trade & other receivables	1,487	118	-	(102)	1,503
	86,564	22,327	(575)	(224)	108,092

Further details of how the Agency identifies assets for which a write-off is required are disclosed in the Parliamentary Accountability section of the Annual Report. This also includes details of loan balances over £300k which have been considered to be irrecoverable and which are written-off in accordance with IFRS 9, or where the Agency has received authorisation from HM Treasury during the current year to cease pursuing the debt.

Movement in write-off allowances during 2023/24

	Allowances at 1 April 2023 £’000	Recognised £’000	Written-back £’000	Utilised £’000	Allowances at 31 March 2024 £’000
Financial asset investments at amortised cost	37,485	58,814	(9,151)	(2,071)	85,077
Trade & other receivables	668	889	-	(70)	1,487
	38,153	59,703	(9,151)	(2,141)	86,564

i) Movement in ECL allowances during the reporting period

	Stage 1 £’000	Stage 2 £’000	Stage 3 £’000	Simplified approach £’000	Total £’000
Position as at 1 April 2023	34,216	17,571	17,411	225	69,423
New credit-risk exposures in the reporting period	6,501	274	-	-	6,775
Movements from Stage 1 to Stage 2***	(5,621)	8,306	-	-	2,685
Movements from Stage 1 to Stage 3***	(490)	-	757	-	267
Movements from Stage 2 to Stage 1***	-	-	-	-	-
Movements from Stage 2 to Stage 3	-	-	-	-	-
Movements from Stage 3 to Stage 1	-	-	-	-	-
Movements from Stage 3 to Stage 2	-	-	-	-	-
ECL utilised when written-off*	(1,591)	(2,215)	(16,524)	-	(20,330)
Movements as a result of modifications*	-	(2)	-	-	(2)
Released on repayment	(1,820)	(9,996)	-	-	(11,816)
Changes in risk parameters and risk models**	(13,571)	44,602	1,030	225	32,286
Net movements in expected credit loss allowances	(16,592)	40,969	(14,737)	225	9,865
Expected credit loss allowance as at 31 March 2024	17,624	58,540	2,674	450	79,288

	Stage 1 £’000	Stage 2 £’000	Stage 3 £’000	Simplified approach £’000	Total £’000
Position as at 1 April 2024	17,624	58,540	2,674	450	79,288
New credit-risk exposures in the reporting period	8,962	-	-	-	8,962
Movements from Stage 1 to Stage 2***	(837)	1,070	-	-	233
Movements from Stage 1 to Stage 3***	-	-	-	-	-
Movements from Stage 2 to Stage 1***	1,191	(1,427)	-	-	(236)
Movements from Stage 2 to Stage 3	-	-	-	-	-
Movements from Stage 3 to Stage 1	-	-	-	-	-
Movements from Stage 3 to Stage 2	-	-	-	-	-
ECL utilised when written-off*	(9)	(1,467)	(800)	-	(2,276)
Movements as a result of modifications*	-	(4)	-	-	(4)
Released on repayment	(2,425)	(12,341)	(1,874)	-	(16,640)
Changes in risk parameters and risk models**	(9,672)	(33,642)	-	(331)	(43,645)
Net movements in expected credit loss allowances	(2,790)	(47,811)	(2,674)	(331)	(53,606)
Expected credit loss allowance as at 31 March 2025	14,834	10,729	-	119	25,682

*Where amounts are considered to be irrecoverable, they are written-off (or expensed as modification losses where this arises as the result of changes to contractual terms) and the associated expected credit loss allowance is released. As a result, the charge to net expenditure at this time is limited to the difference between the actual amount written-off and the expected credit loss allowance carried at the point of write-off.
**For reasons of practicality and efficiency, all movements in the ECL allowance for short-term receivables (which are calculated by applying a simplified approach based on historic losses observed in the population, as allowed under IFRS 9) are disclosed in a single line. For all other investments, the following input and assumption changes are reflected within this line: credit risk rating (CRR) inputs; changes in loss given default assumptions (including movements in existing asset security balances and exposures); and changes in modelling assumptions including probability defaults (PDs), economic scenario weightings, moderated security value (MSV) rates and the profile of forecast expenditure and receipts across each year.
* * *The movements in the ECL between stages are determined firstly by removing the prior year ECL from the column associated with the prior year allocated stage. The opening ECL position is then recalculated using the stage allocated in the closing position. This is then added to the column associated with the new stage. The differences noted in the total column are therefore the difference between these two positions.

j) Expected credit loss allowance analysed for disclosure against loan categories

2024/25	Stage 1 £’000	Stage 2 £’000	Stage 3 £’000	Simplified approach £’000	Total £’000
Development loans	4,754	2,629	-	-	7,383
Infrastructure loans	7,397	8,100	-	-	15,497
Other loans	2,574	-	-	-	2,574
Trade and other receivables	109	-	-	119	228
Total ECL allowances at 31 March 2025	14,834	10,729	-	119	25,682

2023/24	Stage 1 £’000	Stage 2 £’000	Stage 3 £’000	Simplified approach £’000	Total £’000
Development loans	8,393	18,595	2,674	-	29,662
Infrastructure loans	6,942	39,945	-	-	46,887
Other loans	2,284	-	-	-	2,284
Trade and other receivables	5	-	-	450	455
Total ECL allowances at 31 March 2024	17,624	58,540	2,674	450	79,288

During 2024/25, the economic scenarios, weightings and probability of default values applied in the Agency’s expected credit loss model were revised with reference to current market conditions and future expectations. The change in assumptions, including probability of default values, economic scenario weightings, MSVs, and cash flow profiles has resulted in a decrease in the expected credit loss allowance of £36.3m during the year (2023/24: decrease of £19.31m). Details of the assumptions adopted are set out in the Performance Report section of the Annual Report.

k) Expected credit losses on loan commitments

The Agency’s total expected credit loss (ECL) allowance, as analysed in Notes 12i and 12j, arises on existing financial assets (i.e. where drawdowns have already been made) and on undrawn loan commitments. Undrawn loan commitments arise under both contracts relating to existing financial assets (open loans) and under contracts in which no drawdowns have yet been provided at all. Almost all of the expected credit loss allowance on undrawn loan commitments is in relation to undrawn but committed amounts on existing, open loans, where some drawdowns have already been made. The ECL element arising on loan commitments under contracts in which no drawdowns have yet been made is immaterial.

In line with section B8E of International Financial Reporting Standard 7 Financial Instruments: Disclosures (IFRS 7), the Agency recognises the element of the ECL allowance arising on undrawn loan commitments on open loans against its financial assets, rather than recognising it separately within provisions, as it is not possible to readily identify this element separately from the ECL allowance arising on existing financial assets. This is because the Agency’s ECL calculation uses forward-looking cash flows in which it is often not possible to accurately determine how much of any given future loan repayment or interest receipt is in relation to amounts already drawn or in relation to committed amounts expected to be drawn in the future.

13. Financial Assets and Financial Liabilities: Fair Value and Amortised Cost

The fair values of financial assets are assessed at least annually to meet the reporting requirements of IFRS 9 and are determined as follows:

Level 1
The fair value of the Agency’s shareholding in the PRS REIT plc is calculated with reference to prices quoted on the London Stock Exchange and is therefore categorised as Level 1 in the fair value hierarchy as defined by IFRS 13.

Level 2
The fair values of assets held at fair value through profit or loss relating to the Agency’s equity loan mortgage portfolio are calculated with reference to movements in the Office for National Statistics (ONS) house price index (HPI) at a regional level, being the most relevant available observable market data. This is supplemented by adjustments for experience of actual disposals which have occurred in the final three months of 2024/25 which consider geography, age, property type and transaction type. The price achieved on disposal can differ depending on whether a disposal occurs through a staircasing or a sale transaction. Actual disposals which have occurred in the final six months of 2024/25 have been used to determine the expected proportion of redemption transactions which could occur by a staircasing or a sale transaction for each category of experience adjustment (e.g. geography, age and property type). A weighted average valuation is then calculated which reflects the probability of each redemption option occurring. These experience adjustments are observable as they are developed using publicly available market and transaction data. Therefore, these fair values are categorised as Level 2 in the fair value hierarchy as defined by IFRS 13.

Level 3
The fair values of assets held at fair value through profit or loss relating to managed funds, equity investments in development / infrastructure projects and overage follow the income approach under IFRS 13. The fair value of Level 3 assets are calculated using project-level cash flow forecasts, discounted at rates set by HM Treasury, or the effective interest rate of the underlying loan agreement for loans at FVTPL if higher. This approach is as prescribed by the Government Financial Reporting Manual, issued by HM Treasury. This reflects the valuation methodology which would be employed by market participants when pricing the assets and, since the inputs which inform the calculation of fair value are unobservable to users of the accounts, the assets are categorised as Level 3 in the fair value hierarchy as defined by IFRS 13.

The nature of the investments disclosed within this category vary in nature, as the Agency tailors the type of support or funding available to the individual situation. The nature of investments categorised within the Level 3 category is summarised in Note 12d. In addition, the mechanism by which the Agency obtains returns on these investments is specific to the asset. For example, the Agency may be due a share of returns from a development project, or the Agency may be due a share of profit which is determined based on the underlying performance of an investment. As a result of this, the inputs used to determine the fair value of each individual asset vary in nature. Input data can include project-level cash flows which are either provided by counterparties and moderated by the Agency’s project managers or are obtained via independent valuation or monitoring reports from professional advisers (for individually significant assets).

The fair value of other financial instruments (including liabilities, where significant and long-term) are similar in nature to other Level 3 assets and are calculated by discounting their future cash flows using discount rates set by HM Treasury, or the rate intrinsic to the financial instrument if higher. For financial assets, this results in classification as Level 3 in the fair value hierarchy as defined by IFRS 13.

No financial assets have moved between categories during 2024/25 (2023/24: None).

Measuring fair value on recognition

Where differences between the fair value at initial recognition and the price paid by the Agency to acquire the instrument are considered to be significant they are either:

• recognised as grant expenditure where fair value is considered to be below cost, in accordance with IAS 20 Government Grants; or

• deferred and released over the expected life of the instrument in accordance with IFRS 9.

The cumulative value of gains deferred and yet to be recognised in net expenditure is £nil (2023/24: £nil).

Comparison of cost and carrying value (Group and Agency)

The original cost and carrying values of the Agency’s financial assets, by classification, are as follows:

			2024/25		2023/24
	Note	Original cost £’000	Carrying value £’000	Original cost £’000	Carrying value £’000
Assets measured at amortised cost
Cash and cash equivalents	12a	388,501	388,501	166,687	166,687
Trade and other receivables		82,159	80,428	157,886	155,944
Financial asset investments	12d	1,548,895	1,416,852	1,350,984	1,187,074
Assets measured at fair value
Trade and other receivables		232,766	219,890	258,683	254,906
Financial asset investments	12d	15,534,166	16,712,231	17,257,636	18,204,988
Total financial assets		17,786,487	18,817,902	19,191,876	19,969,599

Prepayments, tax and social security balances are excluded from the preceding table as these are non-financial assets.

There are no differences between the carrying values and fair values of the Agency’s financial liabilities, which are as follows:

	Note	2024/25 £’000	2023/24 £’000
Other financial liabilities
Trade and other payables	17	482,612	506,809
Total financial liabilities		482,612	506,809

Deferred income, tax, social security and certain provisions are excluded from the preceding table as these are non-financial liabilities.

14. Financial Risk Management

The Group and Agency’s financial assets and liabilities are detailed in Notes 12 and 17. The statements in this Note apply to both the Agency itself and the Group, except where indicated.

The exposure to financial risk arising from financial assets is a key focus for management. In order to mitigate this risk, the Agency adopts the following approach to transactions with developers:

• potential exposure to credit risk is subject to a level of analysis which would be seen in UK financial institutions, which includes the consideration of aggregated exposures where applicable;

• for existing recoverable investments, cash flows are managed monthly based on client’s agreed cash flows for drawdowns;

• when selling property, the Agency is normally secured by use of a building lease giving the right to retake possession of the disposed property in the event of a default by the buyer;

• loan and equity agreements are generally backed by a charge on land, parent company guarantees or other available security as appropriate to the individual circumstances. These are subject to individual review and structuring.

a) Market price risk

The Agency’s results and equity are dependent upon the prevailing conditions of the UK economy, especially UK house prices, which significantly affect the valuation of the Agency’s assets.

In particular, the Agency is exposed to significant market price risk in its equity loan mortgage portfolio and land portfolio. Any market price movements are reflected in net expenditure for the period.

The Agency accepts market price risk as an inherent feature of its operation of Help to Buy and other home equity schemes. It therefore does not attempt to directly mitigate this risk, for example via hedging, but monitors the exposure at a strategic level using a range of scenario analysis techniques.

The Agency has performed a sensitivity analysis that measures the change in fair value of the financial assets held for hypothetical changes in market prices. The sensitivity analysis is based on a proportional change to all prices applied to the relevant financial instrument balances existing at the year end. Stress testing is performed which looks at exposure to adverse scenarios to ensure that the financial risks are understood.

Home equity portfolio

The following table shows the effect on net expenditure arising from movements in the fair value of these portfolios at 31 March 2025, before the effects of tax, if UK house prices had varied by the amounts shown and all other variables were held constant. This illustrates the impact of the mortgage providers’ first charge, which disproportionately affects the estimated fair value when house prices reduce.

Modelled change in house prices (%)	Estimated portfolio value (£m)	Incremental change in fair value recognised in net expenditure (£m)	% Incremental change in fair value (recognised in net expenditure)
20.0%	19,330.2	3,232.6	20.1%
10.0%	17,714.2	1,616.6	10.0%
0%	16,097.6	-	0.0%
-5%	15,287.9	(809.7)	-5.0%
-10.0%	14,456.4	(1,641.2)	-10.2%
-20.0%	12,399.6	(3,698.0)	-23.0%
-30.0%	9,542.5	(6,555.1)	-40.7%

Private sector developments, overage and infrastructure

At 31 March 2025, if development returns had been 10% higher/lower and all other variables were held constant, the effect on the Agency’s net expenditure arising from movements in investments in private sector developments and infrastructure projects, before the effects of tax, would have been an increase/decrease of £26.4m/£26.4m from that stated.

Land portfolio

The following table shows the effect on net expenditure at 31 March 2025, before the effects of tax, if at 31 March 2025 average land and property prices had varied by the amounts shown and all other variables were held constant. This illustrates the lower of cost and NRV principle whereby write-downs will only be recognised when an asset falls below its cost base and write-down reversals will only be recognised to the extent the asset has previously been written- down.

Modelled change in land and property values (%)	Estimated portfolio value (£m)	Incremental change in land and property write-downs recognised in net expenditure (£m)	% Incremental change in land and property value (recognised in net expenditure)
20.0%	1,288.4	(132.3)	11.4%
10.0%	1,227.5	(71.4)	6.2%
0%	1,156.1	-	0.0%
-5%	1,117.0	39.1	-3.4%
-10.0%	1,074.0	82.1	-7.1%
-20.0%	976.6	179.5	-15.5%
-30.0%	876.3	279.8	-24.2%

b) Interest rate risk

The Agency’s income is exposed to interest rate risk on its financial assets classified as loans and receivables, where these pay interest at a variable rate. For the majority of the Agency’s loan portfolio, the variable element is the EC Reference Rate, which was 5.35% as at 31 March 2025 (5.65% as at 31 March 2024).

If interest rates on the Agency’s variable rate loans had been 1% higher/lower throughout the year ended 31 March 2025, the Agency’s net expenditure for the year, before the effect of tax, would have been £14.6m/£14.6m higher/lower. The Agency does not undertake any specific measures to mitigate against the risk of changes in variable interest rates.

c) Liquidity risk

Liquidity risk is the risk that the Agency will be unable to meet its liabilities as they fall due.

To the extent that the Agency’s liabilities cannot be met from its own sources of income, they may be met by future grants or Grant in Aid from the Agency’s sponsoring department, MHCLG. Such grants are paid on a monthly basis to fund net liabilities as they are expected to fall due. Short term liquidity is managed through the investment of any cash surpluses with the Government Banking Service.

The Agency does not allow the use of more complex financial instruments, which could result in increased financial liabilities, such as derivatives.

Substantially all of the Agency’s financial liabilities (as described in Note 17) are contractually due within one year of the reporting date.

d) Currency risk

The Agency’s dealings are almost entirely sterling denominated, and therefore the Agency has no material exposure to currency risk.

e) Credit risk

Credit risk is the risk of financial loss where counterparties are not able to meet their obligations. The Agency’s maximum exposure to credit risk, without taking into account any security held, is the same as the carrying amount of financial assets recorded in the Financial Statements, as disclosed in Note 12.

The nature and concentration of the credit risk arising from the Agency’s most significant financial assets is demonstrated in the following tables.

Financial asset investments measured at fair value relate mainly to amounts receivable individually from proceeds generated when the equity-loan mortgage portfolio properties are sold or staircased, or amounts receivable from various private sector developers, resulting in a broad spread of credit risk for these assets. Amounts receivable from the owners of homes are secured by a second charge over their property.

Analysis of total loan exposure by counterparty at 31 March 2025	Exposure £’000	Percentage of total loans
Counterparty 1	227,307	12.0%
Counterparty 2	204,262	10.7%
Counterparty 3	115,219	6.1%
Counterparty 4*	97,251	5.1%
Counterparty 5*	97,251	5.1%
Counterparty 6	77,099	4.1%
Counterparty 7	44,376	2.3%
Counterparty 8*	40,755	2.1%
Counterparty 9*	40,755	2.1%
Counterparty 10*	40,755	2.1%
Total exposure of top 10 counterparties at 31 Mar 2025	985,030	51.7%
Total loans balance at 31 Mar 2025**	1,901,037

*The Agency has funding agreements in relation to investments or developments owned by multiple counterparties with equal ownership. As a result, the Agency’s exposure to different counterparties can be identical.
**The balances analysed above include both loans measured at amortised cost and loans measured on a fair value basis. The exposures are before the application of the expected credit loss allowance and accounting write-off and impairments. The balances do not include capitalised fees and the effects of unwinding deferred income in relation to fees recharged to developers, with a net effect of £15.0m (2023/24: £15.6m).

Analysis of receivables due from disposal of land and property exposure by counterparty at 31 March 2025	Exposure £’000	Percentage of total land and property receivables
Counterparty 1	57,086	29.1%
Counterparty 2	30,276	15.4%
Counterparty 3	26,416	13.5%
Counterparty 4	24,274	12.4%
Counterparty 5	19,691	10.0%
Counterparty 6	11,730	6.0%
Counterparty 7	7,804	4.0%
Counterparty 8	6,417	3.3%
Counterparty 9	5,278	2.7%
Counterparty 10	2,840	1.4%
Total exposure of top 10 counterparties at 31 Mar 2025	191,812	97.8%
Total receivables due from disposal of land and property balance at 31 Mar 2025	196,398

Of the Agency’s loans exposures and receivables exposures due from the disposal of land and property totalling £1,972.4m, £1,962.5m (99.5%) related to investments made to private sector counterparties.

The Agency’s cash is generally held with the Government Banking Service, except where commercial reasons necessitate otherwise, for example when cash is held by solicitors around completion of property sales or purchases or by the Agency’s mortgage administrator pending allocation to accounts.

There are no significant concentrations of credit risk in the Agency’s other financial instruments.

For all financial assets excluding cash, the maximum exposure to a single counterparty at 31 March 2025 was £227.3m (2023/24: £210.5m), and the five largest counterparties accounted for 4.02% of the total financial assets balance of £18,429m (2023/24: 3.5% of £19,803m).

Credit policies

Credit policies are developed which set the context of the appetite for risk, requirements for risk assessment (both at the outset and through the cycle of facilities provided) and the operational aspects of managing the overall risk profile. Details are provided in the Agency’s accounting policies (Note 1).

Assessment of significant increases in credit risk

Individual loans are actively managed by dedicated project managers and are subject to ongoing review, enabling the Agency to react to early warning signs and to continually assess the relevant IFRS 9 stage for expected credit loss (ECL) allowances. This enables the Agency to consider the need for more intensive management to protect the exposure or if needed undertake a structure review to consider whether a write-off allowance is required. Forbearance is considered as part of any assessment and review of the customer risk rating during the term of facilities. This ensures that data which informs the ECL allowance calculation appropriately reflects current credit risk characteristics of the portfolio of investments.

All assessments and approvals are operated within a structured approval delegation matrix from HM Treasury and MHCLG.

Credit profile of investments

Of the total gross amortised loans cost exposures of £1,419m in 2024/25 (2023/24: £1,244m) excluding capitalised fees and the effects of unwinding deferred income, with the net effect of £15.0m (2023/24: £15.6m), £295m (2023/24: £458m) were categorised with a credit risk rating (CRR) between 1 to 4 (low risk), with £901m (2023/24: £502m) of exposures being categorised as CRR 5 to CRR 6 (medium risk). £224m (2023/24: £284m) of loan exposures were categorised as CRR 7 or above (high risk or in default).

Chart: Credit profile of investments

Risk	Gross amortised cost 31 March 2025	Gross amortised cost 31 March 2024
CRR1-4 (low risk)	294.5	458.2
CRR 5-6 (med risk)	900.7	501.9
CRR 7-10 (high risk or in default)	224.0	284.1

Collateral held as security for financial asset investments

Collateral is usually obtained as security against default. The primary sources of collateral are often land which is being developed with the aid of the investment finance, but they can be other land assets within the control of our counterparties or their parent groups. Parent company guarantees are also employed. For the expected credit loss calculation, only land and property security values have a moderated security value (MSV), with an average base MSV adjustment of 56% for land and property applied to reflect reduced values which might reasonably be expected in a distressed sale. Because security values often relate to land under development, security values are modelled based on up-to-date information to take account of factors such as site expenditure and realised sales.

The Agency held gross collateral values against loans totalling £4,598m in 2024/25 (2023/24: £4,575m), the majority of which related to security over land and property assets held by third parties of £4,320m (2023/24: £4,352m). The modified value of this security value after applying MSV adjustments under the central economic scenario was £2,476m in 2024/25 (2023/24: £2,441m).

Of the total exposures relating to loans measured at amortised cost (excluding accounting write- offs) of £1,526m (2023/24: £1,329m), £1,211m (2023/24: £1,088m), 73.9% of agreements (2023/24: 79.4%), were fully covered by gross land and property security values held in relation to those investments. There were 35 exposures (2023/24: 27 exposures), 26.1% of agreements (2023/24: 20.6%), totalling £314m (2023/24: £242m) where gross security values held were less than the unimpaired exposure at that date. The total gross security values held for these investments was £39m (2023/24: £101m). This is £22m after applying MSV adjustments under the central economic scenario (2023/24: £51m). Of these 35 investments, there were 22 investments (2023/24: 12 investments), 16.4% of agreements (2023/24: 9.2%), with a gross exposure value of £217m (2023/24: £105m) where no security is held.

The total gross value (after adding back accounting write-offs) of loans measured at amortised cost which were credit impaired was £133.9m (2023/24: £110.8m). The Agency held gross land and property security values of £35.7m (2023/24: £100.0m) against these 19 assets at 31 March 2025 (2023/24: 14 assets). This is £20.7m (2023/24: £55.3m) of net security values after applying MSV adjustments under the central economic scenario. Of the 22 investments where no security is held, 11 of these are credit impaired investments (2023/24: 4 assets) with a gross pre-write-off exposure value of £80.0m (2023/24: £4.5m).

The Agency held total gross land and property security values of £582.1m (2023/24: £673.4m) against loan assets measured at fair value at 31 March 2025. This is £355.5m (2023/24: £398.3m) of net security values after applying MSVs under the central economic scenario.

Collateral held as security actively being realised

As at 31 March 2025 the Agency was actively in the process of holding or realising collateral in relation to 9 investments that were in administration or receivership. The collateral in all 9 cases relates to land and development assets. The cash flow forecasts that underpin the Agency’s 2024/25 carrying values for these investments include expected receipts from the realisation of the collateral held as follows:

• For 6 of the investments, the Agency does not deem it probable that it will receive funds from the future realisation of collateral. As such, these investments have a 2024/25 carrying value of £nil.

• The Agency’s portfolio of infrastructure loans measured at amortised cost (2024/25 total carrying value of £801.1m) includes one investment which is currently in administration or receivership and through which the Agency is currently holding or realising collateral. The cash flow forecast underpinning the 2024/25 carrying value for this investment includes the projected realisation of collateral and shows total forecast receipts of £4.1m (prior to discounting).

• The Agency’s portfolio of development loans measured at amortised cost (2024/25 total carrying value of £367.2m) includes one investment which is currently in administration or receivership and through which the Agency is currently holding or realising collateral. The cash flow forecast underpinning the 2024/25 carrying value for this investment includes the projected realisation of collateral and shows total forecast receipts of £0.8m (prior to discounting).

• The Agency’s portfolio of infrastructure loans measured at fair value through profit or loss (2024/25 total carrying value of £313.0m) includes one investment which is currently in administration or receivership and through which the Agency is currently holding or realising collateral. The cash flow forecast underpinning the 2024/25 carrying value for this investment includes the projected realisation of collateral and shows total forecast receipts of £0.1m (prior to discounting).

15. Sensitivity of Significant Valuation Modelling Assumptions

a) Help to Buy

Homes England models the fair value of Help to Buy on the basis of the estimated proceeds that would be achieved were all homeowners to redeem their equity loans on the reporting date. Homes England considers these estimated proceeds to be a significant accounting estimate, because the fair value of the portfolio is highly sensitive to market price risk as set out in Note 14. In addition, the estimate is sensitive to significant assumptions that Homes England makes within the valuation model. In the following disclosure, we have shown the individual impact of the assumptions that currently have a material impact on the estimates. Other assumptions within the valuation model, including estimated rates of first charge mortgage arrears and discount to sales on repossession, do not have a material impact at present, but could do if there was a significant decrease in house prices.

Assumptions of market adjustments

Office for National Statistics House Price Indices – which are used by Homes England to estimate the effect of house price inflation over time – are based on all market activity. Help to Buy is only available on new-build properties purchased with a mortgage, and redemptions can occur via staircasing as well as by sale. This means that the market price of the property on redemption may differ from that estimated by HPI alone. Homes England therefore makes regional market adjustments using its accumulated experience of gains and losses on disposals across different redemption transaction types to allow for these differences. These assumptions have a significant effect on the fair value because they modify the expected market price of properties from which Homes England’s percentage share is calculated.

The table considers how the portfolio valuation would vary with 1% changes in the adjustments applied

	Fair value (£m)	Movement from base assumption (£m / %)
2% increase in market adjustment (decrease in house prices)	15,571.6	(345.4) -2.2%
1% increase in market adjustment (decrease in house prices)	15,744.4	(172.6) -1.1%
Base assumption	15,917.0	- 0.0%
1% decrease in market adjustment (increase in house prices)	16,089.7	172.7 1.1%
2% decrease in market adjustment (increase in house prices)	16,262.3	345.3 2.2%

Assumptions of expected proportions of transaction types

Help to Buy is redeemed at the earlier of the sale of the property, or when the homeowner staircases the equity loan with a payment equivalent to Homes England’s share of the current estimated value of the property (as determined by a Chartered Surveyor). Homes England applies regional assumptions based on its accumulated experience to estimate the proportion of its portfolio that will be redeemed by each of these two redemption types. These assumptions have a significant effect on the estimated fair value because the proceeds recovered via a sale may be reduced by the balance due to the first charge mortgage lender and because different transaction types are observed to generate differing returns (as reflected in the regional market adjustments applied).

The table considers how the portfolio valuation would vary with changes in the expected proportions of transaction types

	Fair value (£m)	Movement from base assumption (£m / %)
All redemptions are staircasing transactions	15,665.9	(251.1) -1.6%
10% increase in the rate of staircasing	15,872.5	(44.5) -0.3%
Base assumption (a blend of sales and staircasing)	15,917.0	- 0.0%
10% increase in the rate of sales	15,961.6	44.6 0.3%
All redemptions are sales	16,111.3	194.3 1.2%

Combined impact of assumptions

The following graph illustrates a potential spread of fair value from the combined impact of assumptions at different market prices. The upper and lower bounds correspond to assumptions within the following ranges:

• market adjustments between 2% lower and 2% higher than the base assumptions

• proportion of transaction types between 100% sales and 100% staircasing

• mortgage arrears rates ranging from no arrears to a 7.5% increase on the base assumption

• discounts on repossession between 15% lower and 15% higher than the base assumption

For example, the lower bound corresponds with a 2% increase in market adjustment, a 7.5% increase in accounts in arrears, and 15% increase in discount on repossession. Each bound has been calculated by selecting the value which is furthest from the base assumption for each of the 100% sales and 100% staircasing scenarios.

The combined impact of assumptions generates a spread in estimated fair value of £1.1bn at current market prices. This spread would increase in a falling market, reaching approximately £3.4bn should market prices fall by 30%. The combined impact of assumptions is therefore more sensitive in a falling market. This is primarily due to the impact of the mortgage providers’ first charge, which disproportionately affects the estimated fair value when house prices reduce.

Change in UK house prices	Upper bound	Base assumption	Lower bound
-30%	11,196	9,417	7,808
-25%	11,999	10,935	9,786
-20%	12,803	12,255	11,448
-15%	13,833	13,361	12,782
-10%	14,801	14,294	13,788
-5%	15,635	15,116	14,557
0%	16,461	15,917	15,326
5%	17,286	16,717	16,094
10%	18,112	17,515	16,863

Help to Buy estimated fair value of £15,917m as at 31 March 2025

b) Expected credit loss allowance

Following the requirements of IFRS 9, the Agency is required to calculate an expected credit loss allowance for financial assets measured at amortised cost. A summary of the calculation is provided in Note 12i. Due to the complex nature of the expected credit loss methodology, the calculation is highly sensitive to some key judgements and assumptions.

The impact of the assumptions applied in the expected credit loss calculation has been considered and the different assumptions have a varying impact on the results of the calculation.

There are two assumptions which have a trivial impact on the expected credit loss allowance which are summarised as follows:

• Timing of default events: The calculation of the expected loss allowance at 31 March 2025 assumes that default events would occur at a mid-point of the year for each future calculation date, to build in an unbiased assumption that a default could happen at any point during a future year. This creates variation in the estimate because of the effect of discounting, which will be greater for losses modelled at a later point in the year. If a default event were assumed to occur at the beginning or end of a year, this would increase or decrease the loss allowance by £1.0m (3.9%) / £1.0m (3.9%) respectively.

• Profile of forecast expenditure and receipts within years: Forecast loan balances must be calculated into the future to determine the LGD of each asset (calculated as exposure at default less modified security values). Expenditure and receipts data is available at an annual level for future years within the Agency’s systems, whereas future balances are calculated at quarterly intervals. As a result, an assumption has been applied within the model to apportion spend and receipts over all future quarters using historic data on actual expenditure and receipt profiles. If it had been assumed expenditure and receipts were to be profiled equally over the year, this would have decreased the loss allowance by £715k (2.8%) at 31 March 2025.

Estimates of the impact of key assumptions on the expected credit loss allowance calculation at 31 March 2025 are provided as follows:

Economic scenarios and scenario weighting assumptions

IFRS 9 requires the Agency to consider alternative economic scenarios in the calculation of the expected credit loss allowance. For each identified economic scenario, variations are made to the probability of default values applied based on an individual investment’s credit risk rating. Weightings are applied to the expected credit loss calculation for each scenario, determined in relation to the probability of each scenario occurring, with reference to current market and credit risk expectations. At 31 March 2025, the Agency applied three economic scenarios: a base case central scenario, a downside scenario and an upside scenario. Further details in relation to these scenarios are summarised in Note 1. At 31 March 2025, a 55% weighting was applied to the base case scenario, a weighting of 35% to the downside scenario and a 10% weighting to the upside scenario calculation. The impact of varying these weightings is analysed below:

The table considers how the expected credit loss allowance would vary with alternative scenario weightings applied:

	Expected credit loss £’000	Movement from base assumption £’000 / %
Weighting of 65% : 25% : 10% applied	24,127	(1,436) -5.6%
Weighting of 60% : 30% : 10% applied	24,845	(718) -2.8%
Base assumption of 55% : 35% : 10% applied	25,563	- 0.0%
Weighting of 60% : 35% : 5% applied	25,741	178 0.7%
Weighting of 55% : 40% : 5% applied	26,459	896 3.5%

Probability of default (PD) assumptions

PD values are determined with reference to current economic conditions; however for alternative scenarios the PD values are migrated to adjust the PD % values against each credit risk rating. The PD values are applied to each asset in relation to their CRR. The PD values applied to alternative scenarios have a significant impact on the calculation of the expected credit loss allowance. To illustrate the sensitivity of the estimate to this data, the impact of a one level downgrade / upgrade in PD values assigned to each credit risk rating value across each of the scenarios is analysed as follows:

The table considers how the expected credit loss allowance would vary with a change to the probability of default assumptions

	Expected credit loss £’000	Movement from base assumption £’000 / %
PD values downgraded one level	67,224	41,661 163.0%
Base assumption	25,563	- 0.0%
PD values upgraded one level	8,057	(17,506) -68.5%

Moderated security value (MSV) assumption

To reflect the expected value which might reasonably be realised from the sale of security in the event of default, MSV percentages are applied to gross security values to determine a measure of loss given default (when compared against the estimated exposure on default). The MSVs are varied depending on the type of security held. A lower MSV percentage results in a higher discount applied to the determined security values. The following analysis illustrates the sensitivity of the estimate to a decrease/increase in MSV values determined for each economic scenario by 10%. At present, this only has a limited impact on the ECL allowance due to the effect of the loss floor assumption applied in the Agency’s modelling methodology.

The table considers how expected credit loss allowance would vary with changes to the MSV values

	Expected credit loss £’000	Movement from base assumption £’000 / %
MSV percentages decreased by 10%	26,430	867 3.4%
Base assumption	25,563	- 0.0%
MSV percentages increased by 10%	25,417	(146) -0.6%

Loss floor

A minimum percentage value has been applied to the loss given default (LGD) calculation with reference to individual investments (see accounting policies - Loss given default (LGD) floor). At 31 March 2024 and 31 March 2025 the LGD floor applied was 35%. In order to demonstrate the sensitivity of the calculation of expected credit loss allowances to the LGD floor assumption, alternative floors of 0%, 50% and 75% have been applied to the calculations with results summarised as follows:

The table considers how the expected credit loss allowance would vary with a change in the loss floor

	Expected credit loss £’000	Movement from base assumption £’000 / %
Increase in loss floor to 75%	47,531	21,968 85.9%
Increase in loss floor to 50%	33,663	8,100 31.7%
Base assumption of 35%	25,563	- 0.0%
Reduction in loss floor to 0%	8,171	(17,392) -68.0%

Combined impact of assumptions

The preceding sensitivity analysis has focused on changing one assumption in turn, with all other metrics remaining in line with the assumptions applied in determining the expected credit loss allowance as at 31 March 2025.

However, to consider the impact of several assumptions changing, an analysis has been performed to establish the impact if the key assumptions (excluding scenario weightings) were changed within reasonable limits to consider the highest and lowest possible expected credit loss allowance. The upper and lower bounds correspond to assumptions within the following ranges:

• PDs downgraded by one level (upper bound) and upgraded by one level (lower bound).

• MSVs decreased by 10% (upper bound) and increased by 10% (lower bound) across all three scenarios.

• Increase in loss floor to 75% (upper bound) and decrease in loss floor to 0% (lower bound).

• Assuming default events occur at the beginning of the year (upper bound) and at the end of the year (lower bound).

• Assuming all spend occurs at the beginning of the year and all receipts at the end of the year (upper bound) and assuming all spend occurs at the end of the year and all receipts at the beginning of the year (lower bound).

A variation has then been applied to the scenario weightings against the highest and lowest expected credit loss positions in order to consider the impact of these variations in combination with all other assumptions changing.

Scenario Weightings	Base assumption	Upper bound	Lower bound
65:25:10	24,126	164,001	1,641
60:30:10	24,844	166,215	1,725
55:35:10	25,562	168,429	1,809
60:35:5	25,740	168,981	1,826
55:40:5	26,458	171,195	1,910

16. Land and Property Assets - Group and Agency

	Note	2024/25 £’000	2023/24 £’000
Net book value at 1 April		1,064,633	1,069,359
Additions		322,476	202,273
Disposals	5	(52,756)	(72,757)
Write-downs		(178,264)	(134,242)
Net book value at 31 March		1,156,089	1,064,633

The preceding table includes land and property assets with a net book value of £nil (2023/24: £2.3m), managed under the Direct Commissioning programme where the Agency acts as a developer. Under this arrangement, external contractors manage build and sales on behalf of the Agency. The Direct Commissioning programme concluded during the year.

The net book value at 31 March includes land and property assets expected to be realised in more than one year of £967.5m (2023/24: £859.6m).

Write-downs of land and property assets

Write-downs include charges of £221m (2023/24: £161m) and reversals of £43m (2023/24: £27m).

Homes England’s land and property portfolio is complex and comprises many different assets with different features and challenges. Assets may have specific challenges in terms of access, topography and profile, remediation of polluted land or the rectification of the negative impact of prior uses. The Agency may therefore need to incur expenditure in relation to the construction of roads, bridges or other significant infrastructure and this may extend to regeneration of the land asset area. During the year, the Agency spent £88m (2023/24: £55m) in relation to assets in need of significant regenerative capital expenditure, as described above, and recognised £55m (2023/24: £47m) of write-downs in relation to these assets.

Whilst write-downs arise for a variety of different reasons, common themes relevant to the net write-down expense include: increases in build and infrastructure costs combined with relatively flat sales expectations, increases in the scope of development costs and in the cost of finance, and other regulatory impacts such as continuing implementation of the Future Homes Standard and the mandated minimum requirements for biodiversity net gain.

Following the determination of net realisable value at the reporting period, each asset is individually assessed in order to calculate a write-down/ reversal of write-down. The valuation applied reflects the specific intentions Homes England has for the site and its particular disposal strategy as at the reporting date. As the portfolio includes many assets which may be deemed unviable without the intervention of Homes England, it is not unusual for assets to be written down. Some assets may require significant investment which may not readily translate to increased value, at least in the short-term. Valuations are highly sensitive to changes in input assumptions - especially the larger schemes to be delivered over long timescales - some of which are subjective in nature and small changes can therefore lead to write-downs or reversals. Write-downs may be temporary in nature and values may increase in following years, resulting in reversals of write-downs.

Valuation

Land and property assets had a combined net realisable value of £1,422m (2023/24: £1,448m).

As described in Note 1l, the estimated valuation at the reporting period of the portfolio of land and property assets is obtained in accordance with the current edition of RICS Valuation - Professional Standards published by the Royal Institution of Chartered Surveyors. The information provided to the valuers, and the assumptions and valuation models used by the valuers are reviewed internally in accordance with the Agency’s ALVVE (Annual Land Validation and Valuation Exercise) guidance.

The valuation models used by the external valuers will vary depending on the Agency’s objectives and conditions for each asset. However, they will typically include a mixture of the following:

• Residual method - the residual method is based on the concept that the value of land or property with development potential is derived from the value of the land or property after development minus the cost of undertaking that development, including a profit for the developer.

• Market approach - the market approach uses comparable evidence of similar assets, normally in a similar type of location or geographical area.

• Where disposal processes are well advanced e.g. bids received, preferred bidder identified or conditional agreements entered into, the valuer would be expected to have regard to these. The valuer will make a judgement as to the appropriate weight to apply on a case-by-case basis depending on how advanced the process is and the considered likelihood of the transaction completing as currently structured.

In all cases, further allowances for risk will be applied as appropriate, for example planning risk. The net realisable value of each asset includes a deduction for expected costs to realise the forecast receipt including de-risking/enabling works where required and expected disposal fees (i.e. estimated marketing and legal costs). The net book value is the lower of cost and net realisable value.

Sensitivity of the valuation of land and property assets

As described in Note 1l, the land and property asset portfolio is not homogeneous in nature as the valuation methodology reflects the Agency’s objectives and conditions for each individual asset. Therefore, the underlying inputs used within the calculation for the net realisable value of each asset will vary depending on the nature of the asset, the Agency’s objectives in respect of the asset and the conditions of the asset. This category is therefore sensitive to a range of underlying inputs which are not necessarily common across the land and property assets portfolio. A sensitivity analysis has been performed in Note 14a to provide an indication of the potential effect of a range of variations in land and property prices on the financial statements.

Market uncertainty

During the year, build cost inflation has continued (although it reduced marginally from 2023/24 and substantially from 2022/23). On larger schemes where significant infrastructure is required, the Agency is seeing more significant increases in costs.

The housing market varies significantly across the country, but the national picture suggests that house prices have settled into a steady but low rate of growth. New build demand remains similar to last year.

17. Trade and other payables - Group and Agency

	Group 2024/25 £’000	Group 2023/24 £’000	Agency 2024/25 £’000	Agency 2023/24 £’000
Trade payables	448,941	424,268	448,941	424,268
Direct Commissioning	-	54,738	-	54,738
Deferred income	10,875	8,811	10,875	8,811
Taxes and social security	8	-	8	-
Due to subsidiary	-	-	44,552	56,323
Other	33,671	27,803	33,672	27,803
Balance at 31 March	493,495	515,620	538,048	571,943
Of which:
Current liabilities	466,521	495,425	511,074	551,748
Non-current liabilities	26,974	20,195	26,974	20,195
Balance at 31 March	493,495	515,620	538,048	571,943

18. Pension Arrangements and Liabilities - Group and Agency

During the year the Agency’s employees were able to participate in one of the following contributory pension schemes:

• The Homes and Communities Agency Pension Scheme (HCAPS)

• The City of Westminster Pension Fund (LGPS)

• The West Sussex County Council Pension Fund (LGPS)

All three schemes are multi-employer defined benefit schemes as described in paragraph 8 of IAS 19 Employee Benefits. The Homes and Communities Agency Pension Scheme is the only scheme open to new employees. The scheme was originally established as a final salary scheme, however this changed to career average for benefits accruing from 1 April 2024. From 1 September 2019, new members accrue benefits on a career average basis. The other schemes are local government schemes which changed from a final salary to career average basis for benefits accruing from 1 April 2014. Further information on the funding arrangements for the schemes is contained within Note 18k.

Valuations of the Agency’s assets and liabilities in each scheme as at 31 March 2025 have been prepared in accordance with IAS 19 and the results are disclosed in Note 18a. Note 18b shows the weighted average of the key assumptions used by each of the scheme actuaries in preparing the valuations, weighted according to each scheme’s liabilities. Other information below is shown on a consolidated basis for all three schemes.

a) Pension assets/(liabilities)

	HCA Pension Scheme £’000	Westminster £’000	West Sussex £’000	Total £’000
2024/25
Fair value of employer assets	390,783	458,555	83,803	933,141
Present value of funded liabilities	(329,306)	(177,851)	(39,818)	(546,975)
Net funded scheme assets	61,477	280,704	43,985	386,166
Impact of asset ceiling	(61,477)	(280,704)	(43,796)	(385,977)
Adjusted net funded scheme assets	-	-	189	189
Present value of unfunded liabilities	(778)	-	(1,932)	(2,710)
Adjusted net scheme assets/(liabilities)	(778)	-	(1,743)	(2,521)
Total of net pension assets				189
Total of net pension liabilities				(2,710)
2023/24 (restated*)
Fair value of employer assets	400,139	448,881	85,710	934,730
Present value of funded liabilities	(364,356)	(205,941)	(45,973)	(616,270)
Net funded scheme assets	35,783	242,940	39,737	318,460
Impact of asset ceiling (restated*)	(35,783)	(242,940)	(38,184)	(316,907)
Adjusted net funded scheme assets (restated*)	-	-	1,553	1,553
Present value of unfunded liabilities	(876)	-	(2,347)	(3,223)
Adjusted net scheme assets/(liabilities)	(876)	-	(794)	(1,670)
Total of net pension assets (restated*)				1,553
Total of net pension liabilities				(3,223)

*The 2023/24 Financial Statements have been restated to report an asset ceiling restriction which limits the recognition of net pension assets as per IAS 19. See Note 1s for details relating to the retrospective restatement applied to the 2023/24 Financial Statements.

Funded schemes with net assets as shown in the preceding table are disclosed within non-current assets in the Statement of Financial Position. Unfunded schemes with net liabilities are disclosed within non-current liabilities in the Statement of Financial Position.

All schemes have reported an asset ceiling restriction in 2024/25, and in the 2023/24 restated position. This asset ceiling limits the recognition of further increases in net pension assets as per IAS19, paragraph 64. This ceiling is determined by the maximum benefit obtainable through a refund or reduction in employer contributions. Details of the asset ceiling movements are provided in Note (h). Details of the retrospective restatement applied to the 2023/24 Financial Statements are provided in Note 1s.

As principal employer of the HCA Pension Scheme, the Agency continues to monitor the scheme and has a good working relationship with the trustees. The trustees review the scheme’s investment portfolio on a regular basis. At 31 March 2025, the scheme had a target allocation of 30% of assets to be held in a liability driven investments mandate, which aim to better match the scheme’s liabilities and partially hedge the scheme against changes in inflation and interest rates. A further 20% (2023/24: 20%) of the scheme’s strategic asset allocation is held in corporate bonds. The liability hedging is managed through Insight Investment (one of the HCA Pension scheme’s investment managers) via a segregated mandate which allows Insight to invest directly in gilts, index linked gilts, gilt repurchase agreements, gilt and index linked gilt total return swaps, interest rate and inflation swaps and various cash instruments. As at 31 March 2025, the scheme had a target interest rate hedge ratio of 65% (2023/24: 65%) and a target inflation hedge ratio of 65% (2023/24: 64%) relative to the gilts-flat liabilities. Post year end, the trustees agreed to de-risk the investment strategy of the scheme, by reducing the strategic weighting to equities by 5%, and increase the strategic allocation to liability driven investments by 5% (to 35%). This is currently being implemented. The target interest rate and inflation hedge ratios will remain unchanged.

b) Actuarial assumptions

The weighted average of the key assumptions used by the actuaries of the pension schemes are as follows:

i) Financial assumptions

	2024/25	2023/24
Inflation and pension increases rate (CPI)	2.7%	2.8%
Salary increases	3.5%	3.5%
Discount rate	5.9%	4.9%

ii) Mortality assumptions

Based on actuarial mortality tables, the average future life expectancies at age 65 are summarised below:

	2024/25 Year	2023/24 Year
Male - current pensioners	22.1	22.1
Male - future pensioners	23.2	23.2
Female - current pensioners	24.1	24.0
Female - future pensioners	25.6	25.6

c) Fair value of employer assets

	2024/25 £’000	2023/24 £’000
Equities - quoted	408,119	405,404
Equities - unquoted	2,650	2,595
Bonds - quoted	222,733	230,662
Bonds - unquoted	-	-
Property	61,354	59,447
Other assets - quoted (incl cash)	145,325	147,892
Other assets - unquoted	92,960	88,730
Total	933,141	934,730
Actual return/(loss) on employer assets	5,786	70,810

Some of the funds in which the Agency’s pension assets are invested permit the use of derivatives for the purposes of achieving their investment aims. In all cases, funds are managed by professional investment managers.

d) Charge to net expenditure

	2024/25 £’000	2023/24 £’000
Amounts charged to net operating expenditure
Current service costs	11,153	18,563
Past service costs and losses on curtailments and settlements	-	7
Expenses	2,623	2,575
	13,776	21,145
Amounts charged to finance (income)/costs
Interest charged on liabilities	29,493	29,944
Expected return on assets	(45,078)	(41,259)
Interest on asset ceiling	15,247	-
	(338)	(11,315)
Total recognised in Statement of Comprehensive Net Expenditure	13,438	9,830

The total expected employer contributions to these schemes in the year ending 31 March 2026 are £17.7m.

e) Amounts recognised in the income and expenditure reserve

	2024/25 £’000	2023/24 (restated)* £’000
Actuarial gains/(losses)	(3,784)	(8,439)

f) Reconciliation of fair value of employer assets

	2024/25 £’000	2023/24 £’000
Opening fair value of employer assets	934,730	865,082
Expected return on assets	45,078	41,259
Contributions by members	5,038	4,689
Contributions by the employer	16,134	20,430
Contributions in respect of unfunded benefits	237	232
Actuarial (losses)/gains	(39,292)	29,551
Expenses	(2,764)	(2,717)
Unfunded benefits paid	(237)	(232)
Benefits paid	(25,783)	(23,564)
Closing fair value of employer assets	933,141	934,730

g) Reconciliation of defined benefit obligation

	2024/25 £’000	2023/24 £’000
Opening defined benefit obligation	619,493	637,714
Current service cost	11,153	18,563
Past Service costs and losses on curtailments and settlements	-	7
Interest cost	29,493	29,944
Contributions by members	5,038	4,689
Actuarial (gains)/losses - demographic	(1,157)	(27,055)
Actuarial (gains)/losses - financial	(84,502)	(13,489)
Actuarial (gains)/losses - experience	(3,672)	(6,942)
Expenses	(141)	(142)
Unfunded benefits paid	(237)	(232)
Benefits paid	(25,783)	(23,564)
Closing defined benefit obligation	549,685	619,493

h) Reconciliation of asset ceiling

	2024/25 £’000	2023/24 £’000
Opening asset ceiling	316,907	231,431
Interest costs	15,247	-
Actuarial (gains)/losses	53,823	85,476
Closing asset ceiling	385,977	316,907

i) Sensitivity analysis

The primary assumptions used in calculating the defined benefit obligation are: discount rate, salary increases, inflation and pension increases and mortality expectations. The assumptions used are specified in Note 18b. The assumptions are determined by independent professional actuaries whose work is compliant with Technical Accounting Standard 100: Principles for Technical Actuarial Work as issued by the Financial Reporting Council.

IAS 19 sets out the principal underlying the setting of assumptions, that they should be based on the best estimate of future experience, and also gives a clear direction on the basis for calculating the discount rate. Assumptions should also reflect market conditions at the reporting date, including demographic assumptions and the mix of membership of Homes England’s schemes.

The key assumptions are considered to be the discount rate and the rate of future inflation. The discount rate is important in determining the value of liabilities and is based on high-quality corporate bonds at the year end. The rate is in line with the AA corporate bond yield curve at the year end. Inflation expectations inform the rate at which current and future pensioners’ benefits accrue. It is based on CPI at the year end with an inbuilt allowance for an insurance risk premium. Demographic assumptions, including mortality expectations can also have a bearing on the valuation of liabilities, as can the specific membership mix of our schemes.

To assess the defined benefit obligation, assumptions are used in a forward looking financial and demographic model to present a single scenario, using financial assumptions that comply with IAS 19. The valuation of the obligation at 31 March 2025 is a snapshot in time; actual experience over time may differ and the total cost of a scheme will depend on a number of factors including the amount of benefits paid, the number of people who benefits are paid to, scheme expenses and the amount earned on assets. These factors aren’t known for certain at the valuation date. The calculation of liabilities is sensitive to movements in assumptions and even small changes to individual assumptions can have significant impacts. If they were to change, the impact would be as follows:

Adjustment to discount rate

	+0.25% £’000	Current £’000	-0.25% £’000
Present value of total obligation	531,406	549,685	568,648
Movement	(18,279)	-	18,963

Adjustment to inflation

	+0.25% £’000	Current £’000	-0.25% £’000
Present value of total obligation	568,138	549,685	531,743
Movement	18,453	-	(17,942)

Adjustment to life expectancy

	+0.25% £’000	Current £’000	-0.25% £’000
Present value of total obligation	566,021	549,685	533,349
Movement	16,336	-	(16,336)

j) Maturity profile of the defined benefit obligation

The weighted average duration of the defined benefit obligation of the pension schemes is 14 years.

Pension benefits, including insurance premiums, are expected to be paid over time as follows:

	£’000
Within 5 years	140,801
5-10 years	159,025
After 10 years	249,859
Total defined benefit obligation	549,685

k) Funding arrangements

Contribution rates for each of the three schemes are reviewed at least every three years following a full actuarial valuation. The funding strategy in each case is set to target a fully funded position, except for those liabilities which are intentionally unfunded within each of the schemes. Any underfunding is restored to a fully funded position via additional contributions over an appropriate period of time. The estimate of contributions to 31 March 2026 is £17.7m.

The HCA scheme is a multi-employer scheme that does not operate on a segregated basis. Therefore the assets and liabilities are not separately identified for individual participating employers. Benefit obligations are estimated using the projected unit credit method.

Both Homes England and the Regulator of Social Housing (RSH) are members of the HCA Pension Scheme although Homes England is the only significant contributing employer and accounts for the vast majority of the HCA scheme’s liabilities. Based on actuarial data at 31 March 2025, the share of the HCA scheme’s assets and liabilities attributed to RSH is approximately 5% (2023/24: 5%) with the remainder attributed to Homes England. All assets are pooled and a single employer contribution rate is determined as part of the actuarial valuation for the whole scheme. This contribution rate applies for the principal employer, Homes England, along with any other participating employers, including RSH. RSH ceased contributions to the HCA Pension Scheme, effective from 30 Septemeber 2024.

Homes England and RSH record the cost of employer contributions in their own financial statements and account for their proportionate share of the scheme’s asset and liabilities separately. The assets and liabilities disclosed in Homes England’s Financial Statements relates only to its share of the scheme’s assets and liabilities and not to the assets and liabilities of the entire scheme.

There are no formal arrangements in place for the allocation of a deficit or surplus on the wind-up of the HCA Pension Scheme or the Agency’s withdrawal from the scheme. Under both scenarios, exit debts would become payable under Section 75 of the Pensions Act 1995. The Westminster and West Sussex schemes are members of the Local Government Pension Scheme (LGPS). Assets and liabilities for all employers in LGPS funds are identifiable on an individual employer basis. There are no minimum funding requirements or winding up provisions in the LGPS. On withdrawal from the scheme, any deficit is calculated by the administering authority and must be settled by the withdrawing employer. In the case of a surplus, it would be for the fund to determine whether any refund is provided to the employer.

l) McCloud judgement

In December 2018, the Court of Appeal ruled against the government in two cases: Sargeant and others v London Fire and Emergency Planning Authority [2018] UKEAT/0116/17/LA and McCloud and others v Ministry of Justice [2018] UKEAT/0071/17/LA. The cases related to the Firefighters’ Pension Scheme (Sargeant) and to the Judicial Pensions Scheme (McCloud). For the purposes of the LGPS, these cases are known together as ‘McCloud’. The court held that transitional protections, afforded to older members when the reformed schemes were introduced in 2015, constituted unlawful age discrimination. On 27 June 2019 the Supreme Court denied the government’s request for an appeal, and on 15 July 2019 the government released a statement to confirm that it expects to have to amend all public service schemes, including the LGPS. On 13 May 2021, the government issued a written ministerial statement outlining proposals to address the specific discrimination in the LGPS. The LGPS rules changed from 1 October 2023 because of the McCloud remedy. An allowance for the McCloud judgment was incorporated into the latest funding valuation results and as this is used as a basis for the IAS19 reports an allowance is included within the above disclosure. The additional liabilities created are estimated to be from c0.1% of total liabilities based on the 2022 scheme valuation. The judgement does not affect HCAPS.

m) Virgin Media

In October 2023, the High Court and Court of Appeal delivered judgments in the Virgin Media case, addressing amendments to private sector pension schemes and the requirement for section 37 certificates under the Pensions Act 1995. As a private sector scheme, HCAPS is reviewing the potential implications of the Virgin Media litigation with legal advisors. The Agency continues to monitor developments, liaising with HCAPS trustees and adhering to any guidance issued by DWP/HMT. At present no benefit adjustments have been made. No allowances have been made for the Virgin Media litigation in the LGPS valuation this is because the ruling applies to private sector pension schemes.

19. Contingent Assets and Liabilities

Contingent assets

The Agency has in certain instances disposed of land or made grant payments with certain conditions attached, which if no longer fulfilled will result in a payment to the Agency. Examples include where there is a subsequent change in use of land sold which materially increases the return to the purchaser, or if the conditions of a grant payment are no longer met. The normal term during which this arrangement remains in force is 21 years. For affordable housing and other community related schemes the term is more usually 35 years. By its nature this income is variable and the timing of receipt is uncertain, therefore it is not possible to quantify the likely income which may ultimately be received by the Agency.

Contingent liabilities

a) The West Sussex County Council Pension Fund

At 31 March 2025, the Agency had 11 employees (31 March 2024: 11 employees) who were active members of the West Sussex County Council Pension Fund. When the Agency’s last active member leaves the scheme, the obligation to pay an exit debt will be crystallised. The timing and value of any exit debt due in the future is not yet known.

b) Other contingent liabilities

The Agency is potentially liable for miscellaneous claims by developers, suppliers, contractors and individuals in respect of costs and claims not allowed for in development agreements, construction contracts, grants and claims such as compulsory purchase orders. Payment, if any, against these claims may depend on lengthy and complex litigation and potential final settlements cannot be determined with any certainty at this time. As claims reach a more advanced stage they are considered in detail and specific provisions are made in respect of those liabilities to the extent that payment is considered probable.

20. Financial Commitments

	2024/25 £’m	2023/24 £’m
Not later than one year	3,281	3,619
Later than one year and not later than five years	1,787	2,733
Later than five years	29	62
Total commitments at 31 March	5,097	6,414

The Agency has made financial commitments in relation to programmes for investments in loan and equity assets, and infrastructure grants, which had become unconditional at the reporting date, but which had yet to be drawn down by that date. The value of these commitments, excluding those disclosed in Note 11c, was £2,834m at 31 March 2025 (31 March 2024: £2,885m). The profiling of the commitments reflects the Agency’s best estimate of when cash flows will arise, however the actual timing may vary based on factors not wholly within the Agency’s control.

The Agency has entered into financial commitments in relation to affordable housing grant programmes totalling £1,627m at 31 March 2025 (31 March 2024: £3,391m). None of these grants are individually material (31 March 2024: one individually material grant totalling £211m).

The Agency has entered into financial commitments in relation to the Cladding Safety Scheme totalling £488m at 31 March 2025 (31 March 2024: £nil).

In addition, the Agency has entered into financial commitments in relation to land development of £145m (31 March 2024: £136m), leases of £3m (31 March 2024: £2m) and software licenses of £1m (31 March 2024: £nil).

21. Related Party Transactions

Homes England is an executive non-departmental public body of the Ministry of Housing, Communities and Local Government (MHCLG). MHCLG is regarded as a related party. During the year, Homes England has had a number of material transactions with MHCLG and with other entities for which MHCLG is regarded as the parent department. These entities include HM Land Registry and the Regulator of Social Housing.

In addition, Homes England has had a number of transactions with other government departments and other central government bodies. Most of these transactions have been with local authorities (including Stoke-on-Trent City Council, of which a Board member is a local councillor), the Government Property Agency and the Ministry of Justice.

The Agency has also had a number of transactions with its associated undertakings, joint ventures and other related parties as follows:

2024/25	Capital invested in/ (redeemed from) entity £’000	Grants and other payments £’000	Loans/ equity advanced/ (repaid) £’000	Loan interest / dividends received £’000
Payments out
English Cities Fund Limited Partnership	13,743	-	-	-
MADE Partnership LLP	-	-	3,365	-
Habiko LLP	61	-	-	-
Juniper JVCO Limited	1,848	-	7,392	-
Home Group Limited	-	1,329	-	-
Sanctuary Housing Association	-	32,339	-	-
Grosvenor Hart Homes Limited	-	1,484	-	-
Receipts in
English Cities Fund Limited Partnership	(1,374)	-	-	-
Tilia Community Living LLP	-	-	(12,403)	-
Countryside Maritime Limited	-	-	-	(3,000)

2023/24	Capital invested in/ (redeemed from) entity £’000	Grants and other payments £’000	Loans/ equity advanced/ (repaid) £’000	Loan interest / dividends received £’000
Payments out
English Cities Fund Limited Partnership	15,306	-	-	-
Home Group Limited	-	594	-	-
Hyde Housing Association	-	26,500	-	-
Midland Heart Housing Limited	-	7,313	-	-
Newton Development Partners LLP	19	-	-	-
Receipts in
English Cities Fund Limited Partnership	(2,913)	-	-	(3,274)
Home Group Limited	-	(8,770)	-	-
Tilia Community Living	-	-	(8,432)	-
Countryside Maritime Limited	-	-	(3,725)	(6,450)

In addition, the Agency holds £44.6m (2023/24: £56.3m) on behalf of English Partnerships (LP) Ltd, the Agency’s wholly owned subsidiary.

Transactions between the Agency and its pension schemes are disclosed in Note 18.

The transactions with the joint ventures Tilia Community Living LLP and Countryside Maritime Limited, disclosed in the preceding table, relate to loan funding provided under the Short Term Fund, Single Land Programme and Levelling Up Home Building Fund, respectively.

The balance of the loan to Tilia Community Living LLP at 31 March 2025 was £14.3m (2023/24: £24.2m) and this will be settled in cash and is secured by a debenture and a second charge over land and property assets of the company.

Countryside Maritime Limited repaid its loan in the prior year and therefore had a balance of £nil at 31 March 2025 (2023/24: £nil).

The transactions with the joint ventures MADE Partnership LLP and Juniper JVCO Limited relate to a combination of equity and loan funding provided under the Home Building Fund: Infrastructure Loans and the Brownfield, Infrastructure and Land funds, respectively.

As at 31 March 2025, the outstanding balance of the loan to the MADE Partnership LLP is £3.4m. During the year, the Agency made a £1 equity investment in the partnership. The carrying value of the investment, as presented in Note 11, reflects the discounted future cash flows associated with the interest free loan. The application of discounting results in a difference between the cost of the investment disclosed in Note 11 and the amounts presented in this Note.

The balance of the loan to Juniper JVCO Limited at 31 March 2025 is £7.4m. The Agency also made a £1.8m equity investment during 2024/25.

The transaction with the joint venture, Habiko LLP, relates to equity funding of £61k provided during 2024/25 under the Levelling Up Home Building Fund.

The prior year transaction with the joint venture, Newton Development Partners LLP, related to equity funding provided during 2023/24 under the Levelling Up Home Building Fund.

Outstanding commitments for associated undertakings and joint ventures are disclosed in Note 11c.

During the year, Homes England entered into transactions with Home Group Limited, Sanctuary Housing Association, and Grosvenor Hart Homes Limited. These entities are considered related parties due to members of the Agency’s Board holding directorships at the respective organisations. The transactions in the year relate to grants and other payments provided by the Agency and have been disclosed in the preceding table.

In the prior year Homes England entered into transactions with Hyde Housing Association and Midland Heart Housing Limited. The related party relationships ceased to exist during the prior year.

One of the Agency’s Board members, who left during the year, was also a non-executive director of NatWest plc. The Agency uses NatWest for some of its banking services. These relationships pre-date the Board member joining the NatWest plc Board and are on arm’s length terms.

The Agency’s internal approval procedures are established so that members of staff nominated to act as directors or officers of associated undertakings and joint ventures do not have delegated authority with regard to the relevant undertaking.

There were no other material transactions in which related parties had a direct or indirect financial interest.

None of the senior managers or related parties have undertaken any material transactions with the Agency during the year.

For details of compensation paid to management please see the Remuneration Report.

22. Events After the Reporting Period

Date of authorisation for issue

The Agency’s Financial Statements are laid before the Houses of Parliament by the Secretary of State for Housing, Communities and Local Government. IAS 10 Events After the Reporting Period requires the Agency to disclose the date on which the accounts are authorised for issue. The certified accounts were authorised for issue by the Chairman and the Chief Executive and Accounting Officer on the same date as the Certificate and Report of the Comptroller and Auditor General.

Establishment of a national housing bank

On June 17 2025, the government announced the creation of a national housing bank, operating as a wholly owned subsidiary of Homes England. The bank will provide £16 billion of new public investment alongside £6 billion of existing finance and is expected to become operational from 1 April 2026.

The bank will support the delivery of over 500,000 homes by acting as a long-term investment partner to the housing sector, providing government guarantees, flexible lending, equity and infrastructure finance. It has the potential to unlock up to £53 billion of private sector investment.

As this event was announced after the reporting date and does not reflect conditions existing at year end, it is treated as a non-adjusting event in accordance with IAS 10. No changes have been made to the Financial Statements as a result.

Once operational, the bank will be consolidated into the Group’s Financial Statements in accordance with IFRS 10 Consolidated Financial Statements. Its financial position, results of operations, and cash flows will be presented as part of the Group. The Group will assess the specific classification, recognition, and measurement of any transferred assets and liabilities in line with relevant IFRS at that time.

Decrease in house prices in April 2025

On 1 April 2025, changes to Stamp Duty Land Tax rates came into effect. The nil-rate threshold, which had been £250,000, returned to the previous level of £125,000, and the nil-rate threshold for first-time buyers also decreased, from £425,000 to £300,000. HM Land Registry’s UK House Price Index publication commentary showed that in April 2025, on average, house prices in England fell by 3.7% compared to March 2025.

As this event took place after the reporting date and does not reflect conditions existing at year end, it is treated as a non-adjusting event in accordance with IAS 10. No changes have been made to the Financial Statements as a result. However, the sensitivity analysis undertaken in Note 14a demonstrates how a movement in house prices could impact on the fair value of the Agency’s home equity portfolio.

Contact us

0300 1234 500

enquiries@homesengland.gov.uk

@HomesEngland

Our offices

Birmingham
3 Arena Central
Bridge Street
Birmingham
B1 2AX

Bristol
2 Rivergate
Temple Quay
Bristol
BS1 6EH

Guildford
Ground Floor
Bridge House
1 Walnut Tree Close
Guildford
GU1 4LZ

Leeds
2nd Floor
7 and 8 Wellington Place
Wellington Street
Leeds
LS1 4AP

Liverpool
11th Floor
No. 1 Mann Island
Liverpool
L3 1BP

London
10 South Colonnade
Canary Wharf
London
E14 4PU

Manchester
2nd Floor
3 New Bailey
New Bailey Street
Salford
M3 5AX

Newcastle
2nd Floor
The Lumen
St James Boulevard
Newcastle Helix
Newcastle upon Tyne
NE4 5BZ

Northstowe
Northstowe House
Rampton Road
Longstanton
CB24 3EN