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The cost of building safety work and contractor insolvencies helped send housing association Notting Hill Genesis (NHG) tumbling to a 拢129m deficit last year.

The G15 landlord, in an audited trading update for the year ending 31 March, revealed it will post a large deficit for the second successive year, following the previous figure of 拢90.2m.

NHG said the latest deficit was due to several factors including a revaluation of its 3,000-home private rental portfolio which has led to a 拢119m drop in valuation.

It also said it has been 鈥渋mpacted by macro-economic uncertainty鈥� and posted 拢45m in exceptional costs, including for additional building safety work at its Oak Square development in Stockwell, south London, as well as costs relating to its 800-home Spray Street Quarter development in Woolwich.

There were also cost over-runs at its Cambridge House development in Croydon, due to a contractor administration.

But the group did increase its operating surplus excluding one-off charges, from 拢101m to 拢115m, while its turnover rose by 1% to 拢717m.

The group sold 191 homes which it said was in line with its new build programme, adding it is on track to deliver a further 986 completions in the year ahead. NHG said it has strong liquidity and headroom of more than 拢588m in cash and undrawn facilities

The large deficit for NHG comes off the back of last year鈥檚 拢90.2m deficit. The landlord filed its accounts late after identifying 拢101.5m in one-off costs, the majority of which related to building safety liabilities and impairments.

NHG is continuing to work on an improvement plan after being downgraded to a non-compliant 鈥楪3鈥� governance grade by the Regulator of Social Housing in November.

A regulatory inspection found issues of concern with its business planning and risk and control frameworks that led to 鈥榩oor outcomes鈥� for tenants.

In April it agreed an 11-point action plan to improve and in today鈥檚 update, NHG said 鈥済ood progress is being made鈥� with the plans, which are being overseen by new board member, L茅ann Hearne, the outgoing chief executive of Merseyside landlord Livv Housing Group.

Patrick Franco, chief executive of Notting Hill Genesis, said: 鈥淲e have made good operational and strategic progress in the year, despite the challenging economic and market conditions. The regulatory review outcome was disappointing, but we have responded positively and accelerated the transformation which was already underway.鈥�

NHG has in the past 12 months appointed people to a number of new roles including chief customer officer, chief homes officer, chief people officer, chief governance & risk officer and chief organisational effectiveness officer.

Franco added: 鈥淣otting Hill Genesis is an organisation undergoing significant change and investment. It will take time to deliver the results our residents expect but I am confident in our plan and our progress.鈥�