industry news


Detailed messages from HA global accounts


messages about the performance of associations and their direction of travel. The total number of properties owned and in


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management has increased by just 0.9 per cent, to 2,647,395 homes. The rise would have been greater, but 16,356 homes were lost, through sales, other disposals and demolitions. No stock transfers took place from councils in the year, so the percentage of HA homes that is owned and managed by stock transfer associations was stable at 44 per cent. Income from rents rose by £536 million to


£12.2 billion, while expenditure increased by £215 million to £9.4 billion. Costs fell as a percentage of turnover from 70.2 per cent in 2014 to 69.0 per cent in 2015. Most of this reduction came from a reduction in maintenance costs, despite the cost of labour and materials in the construction sector outstripping inflation. The average cost of management per property


increased by 3.8 per cent, far more than inflation to £1,034 and cost marginally more than the amount spent on repairs and maintenance. The rate of increase was down from the previous two years, but it is now costing associations over £80 more a year (up by 8.6 per cent) to manage their properties than in 2013, when the annual cost was £952.


Management costs up, maintenance down


Stock transfer associations spend less than traditional associations on management which probably reflects the greater density of their stock in a smaller number of locations, so they can operate out of fewer offices on average and enjoy greater economies of scale. The average spend on repairs and


maintenance fell slightly to £1,017 per property, down by 0.4 per cent from the previous year, when the annual cost was £1,021. Money spent on major repairs per home edged


up slightly from £918 to £929, but this is well down from 2013 when the average spend on major repairs was £989 per property.


HMM Stats


The decline in home ownership over the last decade in England finally ground to a halt last year. In 2014-15, 63.6 per cent – or 14.3 million – of all households in England were owner occupiers, slightly up from 63.3 per cent the previous year. The proportion of homeowners had been on a downward path since reaching a peak of 70.9 per cent in 2003


ucked away in the detail of HA global accounts for 2015 are some interesting figures which reveal a mixed bag of


Rent increases


The average rent increased by 3.7 per cent to £88 per week (2014: £85 per week). The increase in rent per unit was in line with the guideline limit for rent increase in 2014/15 which was 3.7 per cent (RPI at September 2013 of 3.2 per cent + 0.5 per cent).


“The average spend on repairs and maintenance fell slightly to £1,017 per property, down by 0.4 per cent from the previous year, when the annual cost was £1,021”


The combined rent and service charge per


home increased to £97 per week. Service charge recovery rates are broadly comparable to the previous year at 83.3 per cent (2014 81.8 per cent), which remains of a concern as services are usually costed at a much higher recovery rate of around 95 per cent. In 2015, £242 million of income came from


non-traditional activities like student accommodation, nursing homes, market renting and supporting people services. The total amount of income from non-social housing activities in the year amounted to £879 million for the year, of which they made a surplus of £172 million. Interestingly there is NO information on


customer satisfaction contained within the accounts. While we might not expect this information in financial accounts, it is perhaps a missed opportunity for the HCA, as the social housing sector’s regulator, no longer publishes comparative tables of performance. The absence of detailed performance tables


makes it impossible for tenants, government ministers and others to compare how well or badly associations are performing against other landlords.


Welfare cuts hit plans for new sheltered housing care schemes


delayed or scrapped owing to planned cuts in housing benefit, according to the BBC. Investigations by the news broadcaster has found


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several housing associations saying that new schemes at planning and design stages are no longer financially viable. The schemes, which provide flats for the elderly


or people with learning disabilities, are more expensive to build and run because they provide additional essential facilities and support to residents.


Impact


The National Housing Federation (NHF) has calculated that nearly 2,500 flats or bedspaces in shared accommodation have so far been scrapped or delayed as providers face losing an average of £68 a week per tenant. David Orr, Chief Executive of the NHF, told the


BBC: “There is a real impact now. New homes for people with support needs – vulnerable people – that would be being built have been cancelled.” Government ministers say they are reviewing the


sheltered housing sector “to ensure it works in the best way possible” and that discretionary housing payments can be used to subsidise higher cost services. But this is an area of housing which has been facing funding cutbacks and financial challenges for at least the last 20 years. The latest set of cuts will see housing benefit


paid at rates closer to the private rented sector, but they are not due to come into effect for existing tenants until April 2018 although new tenancies could be hit as early as this year. The government has now announced a 12 month delay in the introduction of cuts while their likely impact is reviewed. This will delay the introduction until April 2017, but critics want the threat of cuts lifted completely.


Nationwide


BBC News said it has spoken to four housing associations in different parts of the country who confirmed their plans had needed to change, with planned schemes either delayed indefinitely or completely scrapped. The planned schemes were for the elderly, those with learning disabilities or for older people with extra care needs. A Yorkshire based HA, which has been working


on the development of a new scheme for the past eight years has delayed the scheme’s start on site as it says new funding rules will result in an annual loss of £100,000 which it cannot afford. Over the Pennines in Manchester, another HA has


stopped design work on a scheme which would have made a loss of £3.35 million over 40 years, because of planned changes in benefit rates.


www.housingmmonline.co.uk | HMM March 2016 | 5


undreds of new sheltered housing flats specially designed for the elderly and people with extra care needs have been


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