Housebuilder Telford Homes is offsetting the weak housing market by increasing its exposure to housing associations.
Telford has agreed a grant programme worth £57m with the Homes and Communities Agency. This covers four sites owned by Telford and three estate regeneration partnership projects. There will be 400 homes developed over three years.
The shares rose 4.25p to 48.5p each, which values Telford Homes at £18.4m.
Telford admits that it will experience contract failures and delays to completions. There were 350 completions last year, compared with 311 the year before. There are 400 more completions due in this financial year. The 10% deposit will be retained if any do not complete. The company estimates that up to 80 may not complete.
The company is reducing the risk of its developments by partnering with housing associations. Some projects will be developed purely as affordable housing. These developments will be lower margin.
There will be some write-downs of land values in the year to March 2009.
Telford is in the process of finalising its new banking facilities.
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