John Fisher, director of ARK Consultancy, explains why – in the dash to build new homes – housing providers can’t afford to neglect existing neighbourhoods.
It’s great to see the UK’s deep-rooted housing supply nettle finally being seized by government, financiers and the construction industry. But at this breakthrough moment, another hazard lurks. No matter how many new homes we build now, the biggest factor affecting capacity for supply and millions of people’s lives will be how effectively housing providers maintain and use the assets they already have. Well-maintained and strategically managed housing that’s subject to rigorous appraisal can unlock extra resources to support new building. But places that get left behind in the big push to boost new supply will leach away valuable time, energy and money. Good homes build more homes, while bad or deteriorating homes sow the seeds of social problems. The Decent Homes Programme provided a huge and welcome injection into existing stock, but it didn’t address shared areas or the wider public realm; factors that really make places where people want to live. And it created a cohort of homes and building elements that will wear out at the same time. So there’s a ticking clock of asset liability that needs careful attention. At worst, we could repeat the policy and delivery mistakes of the last generation, when too many of the homes created to meet demand were then systematically neglected through years of under-investment and inadequate planning. Modern-day executives could be patting their teams on the back for building new homes, while simultaneously overseeing the decline of some of what they already own.
The first step towards avoiding these risks is to understand and acknowledge that they exist – then put proper strategies, systems, people and investment in place to ensure existing properties and neighbourhoods continue to deliver returns. These essential disciplines are at the heart of the active asset management strategies promoted by ARK. Organisations have to grasp the value and challenges of their assets, and apply proven techniques to make the right – sometimes tough – decisions. We offer the unique ‘ASAP’ strategic asset performance model, which tests the efficiency of and return on clients’ portfolios down to the individual address. While our comprehensive option appraisal, benchmarking, contracting and procurement services help asset management teams to achieve the best blend of repairs, maintenance, improvement or disposal. In 2010, ARK helped to establish CHIC (the Central Housing Investment Consortium). This member-owned group exists to save housing providers money and boost their productivity (see chicltd.co.uk). It’s free to join, and the 40-plus existing members already benefit from average cash savings of 15 per cent across their new build, planned maintenance, legal and merchant services. CHIC promotes modular and timber-frame approaches to new development, plus innovative company vehicles to help organisations save by working together to share costs. This is the sector’s future. Getting these aspects of the business right doesn’t just pay back in the short term by leaving more money to invest in new homes. It also gives registered providers the evidence they need to shine some light onto the regulator’s somewhat ‘penny-wise’ view of asset management, and produces more satisfied residents who want to carry on living in strong, sustainable communities. We’re right behind, and part of, the drive to build more homes. We’re also here to make sure existing homes and residents aren’t forgotten.