But this is all set to change. The recent slew of government announcements – including cutting rents by 1% a year for four years and extending the right to buy to all tenants of English housing associations – mean social landlords are having to find savings to balance the books. With such large sums involved, spending on repairs and maintenance is in the firing line, but what exactly are landlords planning to do?
This is what new research published by Build Recruitment and Housingnet, sets out to answer. The Future of Housing Repairs Survey 2015, heard from landlords managing a total of 400,000 homes – around a tenth of the social homes in the country – and spending a combined £200 million on annual repairs and maintenance (see ‘Repairs spending’ box, below).
“Housing organisations are experiencing the greatest change in a generation,” says Gaz Summer, Housingnet managing director. He adds of the inaugural survey: “Landlords are making key decisions about the shape of their businesses - the repairs service is at the heart of this.”
More than 40 organisations from across the country shared their views, the majority (two-thirds) are housing associations, almost a fifth are local authorities and the rest include ALMOs and a housing co-op. The findings are an authoritative snapshot of the repairs challenge, with responses drawn almost entirely from key professionals directly responsible for such work – more than three quarters of respondents are in operations, property services or asset management roles.
Landlords’ concerns are palpable. The vast majority of participants – almost three-quarters – report that their repairs and maintenance approach has been affected “to some extent” or “to a great extent” by government policy changes, such as the 1% rent cut and benefit cap changes (half are affected “to some extent; more than a quarter to a great extent”). Remaining respondents say their approach is either unchanged or they are unsure of any change.
The findings echo a sector-wide trend, as Build Recruitment director Chris Ewart explains: “The impetus for the survey was to look into growing moves by organisations to bring repairs services back in-house. We wanted to discover if this is the case and, if so, what the implications are for how landlords do business.” Indeed, as has been well documented, an increasing number of large London housing associations have expanded, or plan to expand, their in-house repairs operations.
The survey reveals that of the organisations whose approach has altered as a result of government policy, over half are reducing their planned repairs spending in a bid to save money. Almost a third, meanwhile, are discussing with partners how to combine service delivery across various areas including, for example, planned and responsive repairs, voids and asset management.
Crucially, a small but significant proportion (a fifth) are making redundancies to save money, while a similar amount are exploring bringing repairs in-house to save on VAT. Under a sixth of organisations report they offer tenants a different level of repair service, depending on what rent they choose to pay. Other cost-cutting measures mentioned by several organisations include setting up a local authority trading company, re-procurement, or changing service standards – on fencing or decorating, for example.
The findings hint at a potential repairs and maintenance double whammy. Not only are landlords considering taking work back in-house, but the projects they deliver directly may also be reduced. Ewart says: “Contractors are feeling the hit, because housing organisations are taking back the work, while simultaneously being forced to cut back the work they also do directly.”
Contractors, who may lose out on planned repairs work, need to act swiftly and housing providers must grasp the nettle of how austerity measures impact specifically on repairs. Ewart adds: “Forward-thinking contractors should be having those early conversations with housing providers, with the latter asking contractors to deliver better value for money and help make efficiencies…Landlords mustn’t have their heads in the sand on repairs, they need to embrace this challenge.”
Clearly, cuts to planned work puts the quality and condition of properties at risk, threaten to undermine progress that was made through the delivery of the decent homes standard by 2010 and leave tenants – to whom landlords are ultimately accountable – dissatisfied. None of this does anything to boost the affordable rented sector’s already battered image as the poor relation to home ownership.
“Ultimately, we have to question if we’ll end up with areas that could fall into disrepair,” Ewart adds. “The specific focus here is repairs and maintenance, but there’s a wider issue at stake here about regeneration and communities that landlords need to keep in mind.”
Breaking down their annual repairs work, almost a third of respondents spend £10 million-£20 million on responsive repairs, with around a sixth spending £1 million-£2 million. Housing organisations say such repairs are almost always delivered by contractors or by a combination of in-house and contracted services (almost half and over a third, respectively). As for planned maintenance, almost a quarter say they spend £10 million-£20 million, while a sixth spend more than £20 million. Almost three-quarters of planned works are delivered by contractors, with a fifth by a mix of in-house and contracted services.