Industry News


HA maintenance costs soar, driving operating surpluses down


Grenfell Tower fire has been revealed in the sector’s global accounts for 2018/19. The global accounts published by England’s


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Regulator of Social Housing, shows that the overall operating surplus on social housing lettings fell six per cent to £4.7bn, following a two per cent fall to £5bn in the previous year. The fall in operating surpluses for 2018/19 was


largely driven by significant increases in repairs and maintenance - with a £118m (six per cent) increase in routine maintenance costs and a £111m (13 per cent) rise in planned maintenance spending. Management costs also rose while rental income flatlined. Total repairs and maintenance spending on


existing stock was £5.5bn, compared with £5.2bn in 2017/18. However, it is unclear how much of the increase is due to extra works and how much was caused by cost inflation on materials and labour. This should become clearer in late January when


the regulator is expected to publish the findings of its analysis of metrics and benchmarking of costs. But it is expected there will be a growing focus on value for money from Ministers and the Regulator ahead of the March budget. HAs with higher than average costs for management and maintenance can


ncreased expenditure on repairs and maintenance by housing associations, driven by a sharper focus on health and safety after the


also expect greater scrutiny. Fiona MacGregor, chief executive of the RSH,


said: “Although the accounts show the sector is performing strongly overall, we have seen a reduction in margins, on both rental properties and those built for sale, and in overall surplus. “This highlights that boards must remain vigilant


by continuing to monitor and manage the potential risks facing them.” She added that the sector “continues to maintain its financial position, while increasing investment in new and existing homes”. Management and service charge costs rose by


similar amounts to maintenance spending, up £118m (six per cent) and £88m (five per cent)


respectively. Meanwhile rental income was stable, as the centrally imposed social housing rent cut entered its third year. The sector’s overall operating margin fell for the


second consecutive year from 28 per cent in 2017/18 to 25 per cent last year, with margins tightening for social housing lettings, shared ownership sales and market sales. Housing associations raised a record £13.5bn in


debt finance in 2018/19, up from £10bn the previous year. The sector invested £12.1bn in building new homes across all tenures last year, up 12 per cent – with investment in for-sale tenures soaring 40 per cent from £2.8bn to £3.9bn.


Overhaul of tenancy agreement to include an end to pet bans


Housing Secretary Robert Jenrick has called on landlords to make it easier for responsible tenants to keep well-behaved pets in their homes as he announced an overhaul of the model tenancy contracts. It is understood that only around seven per cent


of private landlords advertise their properties as suitable for pets, meaning many people struggle to find a home suitable for themselves and their pets or they have been forced to give up their pets all together. The model tenancy contract for renters, to be


published later this year can be used as the basis of lease agreements. It will be revised to remove restrictions on well-behaved pets while ensuring that landlords’ properties are protected from damage by badly behaved pets. The Government is clear there should be a


balance with responsible pet owners not being penalised and landlords being more flexible in their approach. Total bans on renters with pets should


only be implemented where there is good reason, such as in smaller properties or flats where owning a pet could be impractical. Robert Jenrick said: “Pets bring a huge amount of


joy and comfort to people’s lives, helping their owner’s through difficult times and improving their mental and physical wellbeing. It’s a shame that thousands of animal-loving tenants and their children can’t experience this because they rent their homes instead of owning property. “So, I’m overhauling our model tenancy contract


to encourage more landlords to consider opening their doors to responsible pet owners. We will be listening to tenants and landlords to see what more we can do to tackle this issue in a way that is fair to both.” The Government claims this is part of its mission


to improve life for tenants, recognising that more people are renting and for longer periods. The tenancy agreement overhaul comes on top of banning unfair letting fees and capping tenancy


16 | HMM February/March 2020 | www.housingmmonline.co.uk


deposits, saving tenants across England an estimated £240 million a year. In the Queen’s Speech it confirmed its


commitment to scrapping ‘no fault’ Section 21 evictions. Next it is planning to bring forward bills to update the relationship between tenants and landlords, expand access to and use of the rogue landlords register and database, as well as introducing a Lifetime Deposit scheme, to make moving between properties easier and cheaper.


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