Good morning, everyone, and welcome to the annual results for the Triple Point Social Housing REIT for the period ended the 31st of December, 2023. Thank you so much for all taking time out of your, no doubt, busy day to come and listen to our presentation this morning. Before making introductions, I'd just like to draw your attention to the fact that the Triple Point Social Housing REIT benefits from a board with a wide range of relevant experience. We've got housing experience, care experience, investment trusts, construction, legal, audit, and tax experience, all of which are obviously very complementary to the strategy. I'm Max Shenkman. I'm a partner and head of investment. I'm joined today by Isobel Gunn-Brown, also a partner and the CFO of the strategy, and then Gregory Banner, an investment director.
On this first slide, we want to draw your attention to some of the key themes of the last 12 months. Moving across from left to right, it's been another year of strong rental growth. In 2022, we delivered rental growth of over 6%, and again, this year, rental growth has been 6.9%. We continue to invest into a sector that is personified more than anything else by growing excess demand for specialized supported housing, and it's important to remember that the individuals living in our properties benefit from government support in relation to their rent payments through Housing Benefit. It's these three factors that, more than anything, have contributed to the ongoing valuation resilience of the group's portfolio.
The strategy also continues to offer investors really strong protection against high interest rates, because 100% of the debt is long-term and fixed price, with a blended weighted coupon of 2.74%. Finally, it's worth emphasizing the fact that we take a partnership approach to investing in this sector in terms of the long-term relationships we form with the registered providers responsible for managing the properties owned by the group, 'cause we think that's the best way to preserve their long-term value and also the sustainability of the group's income streams. It's worth also pointing out the majority of our lessees continue to perform in line with expectations.
At the start of last year, we set out a list of actions that we wanted to complete over the course of 2023, and we're glad to now report that we were broadly successful on delivering on those strategic initiatives. So in April, we commenced a GBP 5 million share buyback program that completed in June. In July, we kicked off the pilot phase of our eco retrofit project, which will see us invest into the group's properties to make them more energy efficient, again, preserving their long-term value. For the third time, Fitch affirmed our investment grade rating in August, and in September, we were successful in achieving our objective of selling a portfolio of properties in line with their prevailing book value.
Finally, at the start of this year, we commenced the rollout of our new risk-sharing clause, about which we'll provide more detail later on in the presentation. On this next slide, we're just going to run through some of the key numbers of the last 12 months. The EPRA net tangible asset per share increased by just over GBP 0.04 to GBP 113.76 . This was driven principally by an increase in the value of the underlying property portfolio, which increased by just under GBP 10 million, and of course, that's net of the four properties that we sold in September. We kept the dividend target flat this year at GBP 5.46 to allow for a dip in rent collection, and we're glad to report that we have met that target. The group's LTV is 37.0%.
That's come in ever so slightly since the start of the year, reflecting the increase in the group's property portfolio. Again, the weighted average unexpired lease term has come in by about a year, reflecting the maturity or the increasing maturity of the group's property portfolio. Rent collection was slightly lower than last year at 90.2%. The important point to make here is that rent collection increased in the second half of the year, and we expect that trend to flow into 2024 as we make further progress with My Space and Parasol, the two Registered Provider lessees of ours that have material arrears. It's a similar story for dividend cover. Dividend cover for the year was 0.85x , but cover increased in the second half of the year, and the dividend is now fully covered on a run rate basis.
Finally, the EPRA Net Initial Yield was 5.59%. On this slide, we want to spend a bit of time talking about the inflation-correlated nature of the group's income streams and how they complement the group's really compelling capital structure. 100% of the group's leases are linked to the lower of either inflation or government policy. If you look at government policy going back in terms of social housing rent increases, there is a really high degree of correlation between those rent increases and CPI, and we expect that trend to continue over time. In 2022, we benefited from rent increases of 6.7%. In 2023, of course, we imposed a temporary voluntary 7% cap on our rent increases, and so as expected, the weighted average rent increase this year was 6.9%.
Looking forward to next year, 64.6% of our leases have their annual rent increases linked to the September 2023 CPI figure of 6.7%, so we expect to demonstrate continued strong rental growth in 2024. Finally, if you look at the group's debt package, it's all long-term and fixed price. The weighted average debt maturity is 9.6 years, and the blended fixed coupon is 2.74%. The first tranche of the group's debt that needs to be refinancing doesn't come to the end of its term until 2028. On this next slide, you can see that for the first five years of the strategy's life, we had 100% rent collection. In 2022, that figure dipped to just over 91%, and then this year, the figure was just over 90%.
Critically, as mentioned earlier in the presentation, rent collection picked up in the latter half of the year due to the progress we've made with both My Space and Parasol, and we expect that trend to continue into 2024. And most importantly, 25 out of 27 of the group's lessees have no material rent arrears. On this next slide, we provide a bit more detail about how the value of the group's property portfolio has evolved over the last 24 months. You can see that the gold line demonstrates that yields have moved out by about 50 basis points. There are two key drivers to this outward movement in yield.
On the one hand, it's general market yield softening, which is reflective of the wider real estate sector, and then there has been specific yield softening applied to those properties leased to two of the group's registered providers, My Space and Parasol. Fortunately, you can see that this blended impact of a 50 basis points outward movement in yield has been more than offset by strong rental growth, meaning that the value of the group's property portfolio has increased over the last 24 months. Finally, before handing over to Isabelle, I want to talk to you about a really exciting new forward funding project that we hope to commence in May of this year. This is the only development project that we're currently considering.
We hope to commit GBP 2.8 million to this scheme, which will be built out in conjunction with Golden Lane, one of the leading registered providers in the specialized supported housing space that benefits from a G1 V2 rating from the Regulator of Social Housing. The scheme is based in Chorley. It will deliver energy-efficient homes in direct response to identified local need, and excitingly for us, it's gonna be the first project where we're targeting a 10% Biodiversity Net Gain. I'm now gonna hand over to Isabelle, who's gonna talk through the financial performance of the fund over the last twelve months.
Thank you, Max, and good morning, everyone. Turning to the statement of comprehensive income. Rental income increased by 6.8% year-on-year. This has been driven by index-linked rental uplifts across the portfolio, capped at 7% for 2023. The expected credit loss of GBP 4.6 million is reflective of the rental arrears for two of the group's approved providers and the probability of the recovery of those arrears. The provision this year includes GBP 1 million of unpaid rent relating to 2022, and the remaining GBP 3.6 million relates to 2023 arrears. Expenses have increased by 4%, which is primarily linked to higher inflation, whereas the EPRA cost ratio, which is a measure of expenses as a percentage of rental income, has improved year-on-year, reducing from 21.09% to 20.6%.
This is due to increased rental income. The fair valuation gain on investment property was GBP 15.5 million, driven by the rental uplifts. The net finance costs are lower due to the cancellation of the RCF and the related arrangements fees being written off in full during 2022. Net profit was GBP 35 million, equivalent to earnings per share of GBP 8.81 . Dividend cover for the year was 0.85x , which represents EPRA earnings, adjusted for non-cash items to reflect the actual cash flow supporting the dividend payment. Dividend is fully covered on a run rate basis. Turning to the statement of financial position. During the first half of the year, a GBP 5 million share buyback program was completed, purchasing 9.3 million shares at an average share price of GBP 52.61 .
The shares were subsequently canceled, and the accretion in value of buying at a discount for the remaining shareholders is recognized in the EPRA net tangible asset per share. Cash at the 31 December was GBP 29.5 million, demonstrating strong liquidity at the end of the year. The group's long-term fixed rate debt of GBP 263 million has an average fixed rate of 2.74%, an average maturity of 9.6 years, and the loan to value remains at 37%. The EPRA NTA has increased from GBP 109.06 to GBP113.76 , an uplift of 4.3%. Turning to the EPRA net tangible asset bridge. This highlights the components of the net tangible asset growth during the year.
The increase in EPRA net tangible assets is represented by EPRA earnings, the uplift on the fair value of properties, less dividends paid during 2023, plus the accretion in value resulting from the average share price paid under the share buyback program, representing a 48% discount to NAV at the 31 December, 2022. Turning to the total accounting return. We are pleased to demonstrate a return of 9.3% for the year, which represents NAV growth of 4.3% and dividends paid of 5%. The cumulative return since IPO is 47.7%, calculated on the NAV at IPO of GBP 0.98 . The dividends paid and payable are in line with the full-year target of GBP 5.46, and the final dividend for 2023 will be paid by the end of March 2024.
Turning to the review of the debt covenants. This slide is a summary of Social's long-term fixed rate debt, showing significant headroom for the asset cover ratios and interest cover ratios... This demonstrates strong liquidity, with a further GBP 75 million of unencumbered assets and GBP 29.5 billion of cash. For the third consecutive year, Fitch has affirmed the company's existing investment grade rating of A- for issuer default rating and A for senior secured rating. Thank you. I'll hand you back to Max for the operational overview.
Thanks, Isabelle, for providing an update on the financial performance of the group over the last 12 months. In this next section, I'm going to give an operational overview. The first point we want to make is that this sector continues to evolve in a positive fashion. This is in large part driven by the activities of the Regulator of Social Housing and the active oversight they provide to the range of RPs that we have leases with. The Regulator remains really engaged in this particular sub-sector of social housing and is working with most Registered Providers that manages properties owned by the group. This is promoting greater accountability and transparency. The Registered Providers, in turn, are responding collaboratively and positively to this regulatory engagement and have strengthened the composition of their board, increasing the range and depth of experience of their board members.
As a landlord, we're doing what we can to promote the compliance of the organizations that we have leases with, and that's why we've chosen to roll out a new risk-sharing clause that's now included in 28% of our leases and that we hope to have fully rolled out by the end of the first half of this year. In terms of track record, this sector now has an increasingly strong track record of valuation resilience, inflation-correlated income streams, and strong operational performance. Final point I want to make on this slide is that we expect over the next 24 months for there to be some consolidation amongst the registered providers that we work with. We've already been notified by one organization that are looking to merge with another similarly sized registered provider.
We think that if this is done off the back of a really clear and well-thought-out business plan, and in conjunction with the Regulator of Social Housing, it should deliver a positive outcome and a stronger combined entity. One of the key fundamentals that has been prevalent ever since we first started investing into this sector back in 2017, is growing unmet demand for specialized supported housing and the role that private capital has to play in helping to meet that demand. At the moment, registered providers face challenges around rising interest rates, inflation, and then also they have to invest into their existing housing stock to make it compliant with the latest fire safety and sustainability standards, all of which is eroding the amount of capital they have to deploy in terms of developing new homes and increasing their reliance on private capital.
Then, in terms of the drivers of demand for specialised supported housing, we've got a greater prevalence of disability in this country, combined with a move away from housing people with care and support needs in institutional care settings and towards providing independent, community-based homes of the sort provided by specialised supported housing. If you look at the right-hand side of this slide, you can see that the government estimated in 2021 that this would lead to a doubling of the requirement in terms of specialised supported housing units in the UK by 2030. Every year when we present our results, we like to draw attention to the human side of this investment strategy and provide examples of the benefits that the homes that we invest in can have on the lives of the people that live in them.
Here you can see we've gone and had a conversation with Reagan, who lives at Kirkdale House. The full conversation with Reagan is available on our website. I strongly recommend you have a look at it, because it will draw out several key themes, which is the independence that Reagan feels by virtue of having her own home, the quality of that home, and then, perhaps most importantly, the high level of care and support that she receives from the support team that operate Kirkdale House and the security that that brings.
So on this next slide, the key point that we want to draw out is that over the last seven years, we have methodically built up a portfolio with just shy of 500 properties, so a highly granular portfolio, which is really well geographically diversified, spread across England, with a couple of properties in Scotland and a couple of properties as well in Wales as well. And then to complement that geographical diversification, we work with a wide range of lessees. So we have 27 specialist housing managers that are responsible for managing our properties and delivering good homes to the residents that live in them. On this next slide, you can see the groups, the monitoring groups, and critically, the team that are responsible for managing a portfolio that has over 490 properties, 27 lessees, and over 100 care providers.
Critically, the asset management team is made up of people predominantly from local authority and registered provider backgrounds, so they know what good looks like in terms of social housing provision, which is so important when providing homes of this nature up and down the UK. On the right-hand side, you can see the proactive approach we take to ensuring we have a really granular understanding of the operational performance of every property in our portfolio, and you can see that we have many different ways that we extract both quantitative and qualitative data from the registered providers we work with, the care providers we work with, and of course, from the property inspections that we undertake in terms of the properties owned by the strategy.
On this next slide, you can see the various different categories against which we review and judge the performance of the registered providers that we work with. These are all listed out on the left-hand side of the slide. So occupancy, here we look at both the occupancy of our properties, but also the wider occupancy of the registered providers' portfolio to understand how their wider business is performing. Property inspections, as I said, are a critical way of understanding the granular performance of the properties owned by the strategy. We have two people who are permanently on the road visiting our properties and can get through about 200 property visits in any one year.
And they're looking at, obviously, the external and internal condition of our homes, the approach taken to repairs and maintenance and health and safety, as well as checking in with the residents and talking to the care providers and support providers to make sure that the service is of the quality that we would expect in our portfolio. From a governance perspective, as you'd expect, we carry out a biannual compliance survey, where we look at everything from wrapped concrete to health and safety, asbestos, safeguarding, and then fire risk assessments. We look at the quality, depth, and range of experience of the Registered Provider's board, and we also consider the quality of our relationship with that organization. Are we, are we receiving high-quality data in a timely fashion? Is the Registered Provider taking a collaborative approach to engaging with us as a landlord?
Finally, we look at the financial performance of the registered providers we work with, both obviously in terms of rent collection, but also by analyzing the management accounts we receive from them on a quarterly basis and, comparing how they perform in a number of key ratio tests. On this slide, we're going to spend a bit of time talking about the two registered providers in the portfolio that have material arrears, My Space and Parasol. The overarching point to make on this slide is we've invested a lot of time, over the last 12 months with the management teams and boards of these organizations, and that investment has delivered real progress, and we hope that that progress will deliver increased rent collection over the course of 2024.
MySpace have a new high-quality CEO and COO in place, who are together, have already delivered material operational improvements in terms of how the organization performs. This has translated into increased levels of rent collection. We expect to agree a creditor agreement with MySpace in the first half of the year, which will determine the long-term level of rent that we expect to collect. In terms of Parasol, we agreed a creditor agreement in July of last year. Parasol have met the terms of that agreement. We recently extended it for another six months while we look to put in place a longer-term agreement.
They've got a high-quality management team and board in place now, but we have agreed terms with an alternative registered provider who we are able to move leases to if we're not able to reach what we deem to be an equitable agreement with Parasol about the long-term level of rent we generate from our portfolio properties leased to their RP. On the final slide of this section, we want to spend a bit of time talking about the regulatory landscape and go into a bit more detail about the new risk clause that I mentioned earlier on in the presentation. So the regulator remains active in this sector. They issued two enforcement notices in relation to two of our registered providers in the first half of this year, in January and April, respectively, and there have been no further judgments or notices issued since then.
In relation to those notices, both organizations have responded positively and are engaging in a collaborative fashion with the regulator, as we'd expect to see in these circumstances. We remain really keen, to promote the compliance of the organizations that we have leases with, and that's why we have begun to roll out a new risk-sharing clause. This clause has been reviewed by our valuers, by our lenders, and obviously by our board, all of whom have provided support for the rollout of the clause. It's also been shared with the Regulator of Social Housing.
And what it does is, at a high level, is it enables the Registered Providers that we have leases with to approach us and look to amend the level of rent due under any lease, if a materiality threshold is reached, and if a change in government policy, at either a local or central level, has impacted the level of rent they're able to reasonably generate from the properties that we lease to them. It's included now in 28% of our leases, and we expect to have it fully rolled out across all of our Registered Provider leases by the end of the first half of this year. I'm now going to hand over to Greg, who's going to provide you an overview of our approach to sustainability.
Thanks, Max, and good morning to everyone. At the forefront of our decision-making process is the impact our investments make, from the financial returns they generate to the real social impact they create for both our shareholders and our residents. To understand the impact of our investments, we are externally assessed by The Good Economy, an impact advisory firm that independently measures our impact performance twice a year. Our goal since launch in 2017 has been to increase the provision of specialized supported housing, deliver positive outcomes for residents, and provide stable, long-term returns to shareholders. In their seventh report, The Good Economy have continued to engage with our approved providers, care providers, and residents, outlining how we've performed against our stated impact objectives. This slide shows the headline results from the report, evidencing how we have continued to meet our goals and objectives.
We own almost 3,500 homes across the length and breadth of the UK and are thankful to the 115 care providers who provide a high standard of care and support to our residents, with almost half of them benefiting from more than 50 hours of personalized care each week. Importantly, 61% of these homes are additional to the sector, which is critical in our pursuit to address the ever-increasing demand and supply imbalance. Our focus remains on the delivery of good homes that generate positive outcomes for our residents and sustainable returns to shareholders. It is hugely important to us that 91% of our residents surveyed are satisfied with the quality of their home, enabling the residents in our homes to feel safe and supported while living independently and within a community setting.
On the next slide, we focus on the impact our homes have on the environment. ... At our last interim results in September, we announced that work had commenced on the pilot phase of our eco retrofit program. The pilot program comprises 11 properties located in the Southeast England that previously had EPC ratings ranging from D to E, with the aim of upgrading these to C or above. We are pleased to report that the retrofit pilot is well underway and has already successfully implemented upgrades to 4 properties on time and within budget, achieving updated ratings of B and C. We have adopted a fabric-first approach to the retrofit upgrades of these first 11 properties, focusing on improving insulation in addition to the installation of solar PV systems.
We expect to have completed the pilot program by the end of this year, at which point we would have gained invaluable learnings on how to conduct the works efficiently, cost-effectively, and in a way that causes minimum disruption to residents. These learnings will enable us to finalize our plans for the rollout of the wider eco retrofit project, which will aim to ensure that all of the group's properties have an EPC of C or above. We are already in a good position relative to the wider social housing sector, with only 29% of our properties have an EPC ratings of D or below. This compares favorably to the social housing sector's average of 43.1%. We expect to be in a position to provide an update on the cost and timings of the wider project when we report our 2024 interim results.
As well as benefiting the sector, our lessees and the residents, we believe that taking a long-term approach to asset management decisions will support and enhance shareholder value by preserving the long-term value of the group's portfolio. Alongside the eco retrofit initiative, the group is committed to reducing carbon emissions across the property portfolio. In January, the board adopted a near-term, science-aligned net zero pathway for the group, committing to reducing the social housing portfolio emissions by 75% per square meter by 2035. This target represents a significant milestone for the fund and was set as a result of a year-long project with external carbon specialists, The Carbon Trust, to ensure it is science-aligned. As part of this target, we have also improved the quality of the energy consumption and associated emissions data we collect.
Working with a new data provider, we are now able to access actual energy consumption and emissions data through APIs connected directly to property meters in the portfolio. It is this change in methodology that has led to the increase in reported emissions that you can see in the table. Moving forward, we are committing to use a comparable methodology for emissions reporting. Investing in energy efficiency now will help to preserve the value of our portfolio in the future, as well as protecting the group's market position and reputation in an environment of increased carbon and climate scrutiny and regulation. While not in scope of this requirement yet, the group continues to produce a TCFD report ahead of FCA expectations to demonstrate its support for the disclosures. Investing in real assets exposes the group to both the physical and transition risks associated with climate change.
The main risks to the fund are shown in the table below. We continue to use an external provider, Climate X, to analyze and quantify the physical risk to the portfolio of assets resulting from climate change. Further information on these risks and how they contribute to the overall climate value at risk assessment are covered in the TCFD report. Max will now look ahead to the outlook for this financial year.
Thanks, Greg. I'm now going to provide a brief outlook before opening up the floor to any questions that we have received. Looking forward to 2024, we expect to see both strong rental growth, driven by the fact that over half of our leases have their annual rent increases linked to the September CPI figure of 6.7%, and increased rent collection from My Space and Parasol as our plans with them begin to deliver further rental growth over the course of 2024. Because of this, the dividend is now covered on a run rate basis, and we can look forward to long-term sustainable dividend cover. We expect the group's valuations to remain resilient and, of course, will continue to benefit from the long-term fixed price debt package currently in place.
We want to remain really focused on the strategic projects that I've mentioned in this presentation, namely the rollout of the new risk-sharing clause, our really exciting and sector-leading approach to eco retrofit, and of course, that forward funding scheme, the first in our partnership with Golden Lane.