Increasing Homelessness, house prices, rent decrease, demand outstripping supply and quality of homes – these are just some of the factors that are constantly challenging the social housing market.
Properties are the biggest asset of Housing Associations/registered providers.
The condition of property impacts on ability to let the property, and ability to secure loans to fund new development of properties.
For many decades, asset management was seen as a side show when considering housing management.
In recent years Social Housing providers have had to focus their attention on getting the most value out of their biggest asset which is the property stock they own.
It started with the terminology ‘sweating of asset’ and has led to the terminology we today call ‘Active Asset management’, some call it Dynamic asset management.
Active asset management is when you are constantly reviewing individual property or group of properties and asking the following questions:
1. Do you know the type of ownership you have on a property?
2. Do you know the condition of the property?
3. Do you know how much you need to spend to maintain the property?
4. Do you know how much you need to spend to improve the property?
5. Do people want to live in the property?
6. Can people afford to live in your property (fuel poverty)
7. Is the property fit for purpose?
8. Have you considered options appraisal of asset (maintain/refurbish/rebuild)?
9. Do we know your entire stock?
10. Do you know how well or otherwise each property is performing?
If you have all the answers to the questions above and you are constantly reviewing your position, then you are actively or dynamically managing your assets.
Doing this will effectively ensure you are making sufficient provision and arrangements to look after your asset.
This approach also helps provide clarity on the future investment required to maintain or improve a property.
We all know about the 30-year financial modelling that most organisations do every year, active asset management data provides a much more accurate spend profile required over the life of the asset
It also helps organisations to make decisions that may link to other strategic objectives.
For example, fuel poverty is playing an increasingly key role in affordability, it is important that tenants are able to afford to heat their properties adequately and not spend significant proportions of their income on fuel because their property is poorly insulated and suffering from severe heat loss.
Is there a retrofitting option that improves insulation and significantly reduces heat loss?
An ‘invest’ to save option, that directly benefits the tenant, rather than just the landlord, may be a part of a Landlord’s asset management strategy.
Since the Grenfell tragedy, the sector has been paying a lot more attention to safety and fitness for purpose.
The Homes (Fitness for Human Habitation) Act 2018, also specifically reconfirms the Landlord’s responsibilities in maintaining quality homes.
Having a reliable stock database which is constantly updated plays an important role especially when it comes to compliance.
The sector is already seeing an increase in the adoption of BIM (Building Information Modelling) technology in new developments which if executed properly provides Landlords with quality asset management data which is so important in maintaining its asset.
And finally, a good active/dynamic asset management system is one that not only provides relevant data required to maintain and improve the property, it also informs disposal, regeneration and development decisions made by the organisation.
Mak Akinyemi is Director of Property Services at Gateway Housing