A housing management company run by Brent Council made a loss of £120,000 last year as officers admitted it is “not as profitable as first thought”.

It came as part of a performance review of First Wave Housing (FWH) – which covers more than 300 homes in the borough – for 2019/20.

Despite setting out hopes for a £634,000 profit in the initial business plan, it suffered a £120,000 loss.

However, officers said this was “in line with previous in-year projections” and explained that, in general, the council was still working out the state of the company’s finances.

This was highlighted by the variance of more than £750,000 when measured up against the original budget for 2019/20.

Martin Smith, chairman of the FWH board, explained that this initial budget was inaccurate – suggesting there had been “guessing” involved – and underestimated the costs.

He noted that the loss was down to a higher number and level of repairs than first thought, pointing out that the stock is in “quite poor condition”.

He added the company has been “picking up charges” to freeholders on leasehold properties in the portfolio, which resulted in further costs.

Despite this, he highlighted the positives of the review, suggesting that it was “performing quite well compared to other housing management companies”.

He noted that rent collection was “strong” – coming in around its target of almost 100 per cent – and suggested the overall picture should “improve over time”.

“It’s taken some time to untangle the costs of First Wave Housing and it’s not as profitable as we first thought,” he said.

“But with rent increases and loan interest decreases, we’ll get a better financial picture year on year.”

He added the board should “know enough now for there to be fewer surprises”.