{"id":518679,"date":"2025-04-17T12:45:27","date_gmt":"2025-04-17T11:45:27","guid":{"rendered":"https:\/\/www.constructionnews.co.uk\/?p=518679"},"modified":"2025-04-17T12:35:30","modified_gmt":"2025-04-17T11:35:30","slug":"housing-association-lost-36m-after-contractors-defaults","status":"publish","type":"post","link":"https:\/\/www.constructionnews.co.uk\/financial\/administrations\/housing-association-lost-36m-after-contractors-defaults-17-04-2025\/","title":{"rendered":"Housing association ‘lost \u00a336m’ after contractor’s defaults"},"content":{"rendered":"

Southern Housing, one of the largest housing associations in England, has said it was hit for more than \u00a336m by Henley Construct before the contractor went under.<\/span><\/p>\n

The South London-headquartered residential builder<\/span> entered administration in April 2023<\/span><\/a>, weeks after <\/span>Construction News<\/span><\/i> revealed it had placed most of its staff on unpaid leave<\/span><\/a>.<\/span><\/p>\n

At the time, it cited issues including Brexit, Covid and rising costs.<\/span><\/p>\n

A newly released report by administrators at 360 Insolvency, due to be the last before Henley Construct is liquidated, noted that Henley defaulted on contracts and terminated them before it collapsed.<\/span><\/p>\n

It says more than one housing association has claimed loss and damage as a result of Henley\u2019s actions, but only names Optivo Development Services (ODS), which submitted a claim for just over \u00a336m.<\/span><\/p>\n

Optivo, its parent company, merged with Southern Housing Group in December 2022 to form Southern Housing.<\/span><\/p>\n

A Southern Housing spokeswoman said: \u201cODS contracted with Henley Construct to deliver several affordable housing schemes.\u00a0<\/span><\/p>\n

\u201cThe claim noted by the liquidators relates to losses suffered by ODS as a result of Henley Construct\u2019s failure to proceed regularly and diligently with these projects.<\/span><\/p>\n

\u201cThe impact of these failings was a significant delay in the delivery of hundreds of much needed affordable housing units in Croydon and [other] London boroughs.\u201d<\/span><\/p>\n

She said the issues related to four sites, two of which have since been remobilised.<\/span><\/p>\n

The spokeswoman said Southern Housing was unable to confirm which sites were affected due to ongoing \u201ccommercially sensitive negotiations\u201d.<\/span><\/p>\n

Among the jobs previously announced by Optivo featuring Henley as contractor were a nine-storey \u00a335.2m development for 116 affordable homes in Cherry Orchard Road, Croydon; 75 homes in Thornton Heath as part of a \u00a327.2m scheme; and a 45-apartment block on the site of a former car showroom in Tulse Hill, Lambeth.<\/span><\/p>\n

The administrators said they did not expect that any money would be available to pay debts, including the<\/span> \u00a36.7m they initially believed was owed to subcontractors, suppliers and trade creditors<\/span><\/a>.<\/span><\/p>\n

They added that total claims are now expected to be higher than that, \u201cmainly due to the crystallisation of contingent liabilities and contract default terms\u201d.<\/span><\/p>\n

Although mentioned in the report, the sum claimed by ODS is not included in a total estimate of money owed to creditors.<\/span><\/p>\n

Henley Construct turned over \u00a322.9m in the year to 31 December 2021 and made a pre-tax profit of \u00a3335,000, according to its final published accounts.<\/span><\/p>\n

The year before, it posted a pre-tax loss of \u00a31.5m on revenue of \u00a313.2m. Its revenue had reached \u00a340.8m in 2018.<\/span><\/p>\n

Henley Construct\u2019s parent company, Henley Homes, went into administration in August 2023, with administrators later citing causes that included the collapse of Henley Construct.<\/span><\/p>\n

They said Henley Construct had been unable to fulfil its contractual obligations due to tight margins and rising material and labour costs.<\/span><\/p>\n

Administrators also cited Henley Homes as<\/span> not having the money to pay a former director owed \u00a32.4m after it lost a legal dispute with him in the High Court<\/span><\/a>.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"

Southern Housing, one of the largest housing associations in England, has said it was hit for more than \u00a336m by Henley Construct before the contractor went under. The South London-headquartered residential builder entered administration in April 2023, weeks after Construction News revealed it had placed most of its staff on unpaid leave. At the time, …<\/p>\n","protected":false},"author":43915,"featured_media":474325,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false},"categories":[554],"tags":[],"yoast_head":"\n\n\n\n\n\n\n\n\n\n\n\n\n\n\t\n\t\n\t\n\n\n\n\n\t\n\t\n\t\n