‘Sweating’ Social Housing Assets?
14 November 2016
It doesn’t sound quite correct somehow: social landlords, who are all about striving to improve the lives of their residents and their communities, trying to ‘sweat’ their assets’? Chris Coxon, Head of Marketing at Eurocell, considers the issue.
Yet this is very much a current focus for social landlords, many of whom are looking to drastically rethink the way they do things in the face of intense external pressures. With four years of reductions to social rents, the Government’s extended Right to Buy scheme, reforms to welfare, and an expectation of many more new-build homes, these are challenging times for them.
As a result, social housing providers are turning to a more radical form of asset management in a bid to somehow generate more for less. This isn’t about planned maintenance programmes and replacing kitchens every 25 years. It’s about taking a much more holistic look at all a social landlord’s properties and making decisions that will boost value – which could be measured in financial and social terms - of the whole portfolio.
There’s an opportunity for those of us who provide products and services to the social housing sector. This approach should see programmes of work, rather than a project-by-project approach, which could offer more opportunities for us to offer innovation and efficiencies.
The Chartered Institute of Housing has been working on this new concept of asset management for social housing, last year bringing together a handful of housing associations and supporting organisations to define what the approach should entail. The result of their working group was a report, Working Together to Redefine Asset Management, published last November.
The report urges social landlords to take a good look at all its various assets and work out how they fit in with the organisation’s own objectives. And it urges them to prioritise works accordingly, rather than to slavishly follow maintenance and replacement programmes.
In a section devoted to programmes and procurement, the report calls on the sector to be more innovative about life cycle considerations, moving away from “approaches that encourage short term savings through the use of cheaper components but which lead to longer term costs through expensive repairs”.
This is an approach that we would whole-heartedly endorse. It’s important to look not only at initial cost but at cost in use: what maintenance will be required over an element’s lifetime and how will that impact on the operational cost for the landlord and comfort of the homeowner.
Intelligent asset management has proven its worth in the infrastructure sector, and among multinational companies with large property portfolios. There’s no reason why it shouldn’t help social housing providers now in their hour of need.