Despite the economic, political and social challenges imposed on the housing sector we remain committed to our ambition and made promising steps forward to build more homes and provide communities with the support they need to lead safe and fulfilling lives. Our core business generated a margin of 30%, which is comparable to our peers, and means we were able to meet net interest costs in the year of £13.5m.
We need to generate surpluses in excess of our interest costs each year so that we can afford to build the new homes so desperately needed in London and Hertfordshire. This also means we can continue to invest in our existing homes to provide safe and decent accommodation for our residents, as well as investing in the communities we work in.
Over the course of the year we spent approximately £25m on maintenance, much of which was dedicated to health and safety. Our focus was to ensure safe living environments for our residents and to upgrade our existing homes. Over the course of 2017-18 we worked to plan ways of improving our customer experience and are now actively engaged in a business wide project to upgrade both our systems and ways of working to achieve this.
During 2017-18 our financial reserves grew by just under £15.4m to £345m, exceeding our total borrowings of £328m. With £18.1m of cash ‘in hand’ we continued to ensure that we maintained a buffer to protect the business against any shocks in the financial markets.
Our commitment to delivering value for money has strengthened and this is reflected through the Business Transformation project we are currently pursuing. Since the government announced the requirement to reduce social rents by 1% per year for four years from 2016, we have been focussed on mitigating this through savings. Over the course of 2017-18 we have delivered savings in a number of areas across the business and have procurement initiatives in the pipeline to generate further savings going forward.
We are committed to achieving these essential savings whilst maintaining and improving our services as well as investing £3m in new systems and business processes. This is part of our ongoing programme to improve customer experience while controlling costs.
Our commitment to our social purpose remains strong and we have updated our business plan to reduce our exposure to market sale profits given the uncertain economic and political environment to ensure we continue to serve our residents for years to come.