How Housing Associations became more commercial

24th January 2020

I want to preface this entire piece by saying up front that I have gone over to the dark side. For the first 5 or so years of my working life, I was ensconced in a then growing, now even bigger housing associations which was already catering to a stock of 50,000 homes. I found my way out of the social sector but at After Build we still have strong working links with social landlords, in a number of capacities. So, to paraphrase Joni Mitchell, I’ve looked at HA’s from both sides now.

Housing Associations have always had a toe in development. Because of section 106s, there’s been a steady influx of new stock wherever development is happening. Stock is usually bought by HAs and then passed on through to Asset Management after a year of defects.

A word on the above… We don’t know and no one has ever been able to tell us why housing associations routinely settle for one year of defect management post practical completion… This when, as a purchaser, you’d usually be entitled to 2. I will continue to ask this question until, I assume, my death bed when I’ll try to let it go.

Foregoing a sudden answer and industry shift to the above question, that’s the standard. HA’s buy stock from developers who work with them, possibly an EA/Clerk of works, for one year to manage out any issues arising and then celebrate with an End of Defects process.

During the early 10s of this century, the social sector underwent the various welfare reforms imposed by David Cameron’s government. A combination of factors leading from this and from austerity measures generally led to a worrying increase in rent arrears. We at After Build were amongst the periphery suppliers to feel these shock waves.

But we’re a resilient bunch in housing and so a number of our colleagues started to make the decision to branch out into commercial development. Obviously many social landlords had done this before, but this is when it really kicked off.

Some of the stock that’s owned has a huge retail value because of the location, the age and the style of property. It’s often noted, for example, that no one can afford to live in London, except billionaires and social housing tenants. Regardless of your politics, relocating your tenants and selling the assets is a shrewd move to acquire cash to reinvest in tenant and regeneration opportunities.

How Housing Associations handle calls now

Looking at commercial development through the lens of a social enterprise has presented some challenges int he past. Most of the companies we work with who’ve taken this step have created a sister company under a completely different brand but operating out of the same premises and often managed by the same development team.

Let’s just pause to look at how HAs might handle incoming defects generally. Allowing that some teams might be better or worse trained than others, in my experience all calls will come into a central location – this done with the occupant in mind to make contact easier. The contact centre staff cannot be expected to know the inner workings of, for example, rent arrears, defects and anti-social behaviour. So instead, they know just enough to pigeon hole the call for the right team to pick up.

Tenants who are calling with a first year defect don’t know that’s what they’re calling about. Or more precisely, they don’t know that this is different from a repair. At After Build we pride ourselves on the training we undergo to distinguish a repair from a defect from a snag from user error etc.  Typically the way that a contact centre operative will distinguish is by asking how old the property is when they get the call. Less than a year old, it’s a problem for development. More than a year old, it will go elsewhere. We’ve encountered systems where you don’t even ask, the CRM recognises a data and automatically makes the decision for the operative.

So what are the problems?

The obvious problem is that not all repairs are defects and visa versa. It’s a constant frustration, not just to the development teams who receive any query but also to the contractors who may be sent out to an incorrectly diagnosed issue.

New development companies owned by HA’s also need to decide whether to have a separate contact centre for another reason. It is a truism that tenants and new home purchasers have different expectations of service. Furthermore, some buyers might not even want to shop from a brand which is so closely associated with social housing because that stigma is still alive and well.

There’s the problem of untangling development from asset management. Let’s imagine that for any of the usual reasons, a development contractor does not return to a diagnosed defect when they should. In standalone property developer there’s a theoretical system of finding an alternative contractor and cross charging back to the original. Housing associations have a ready alternative, already geared up to attend to any stock – the asset management responsive repairs contractor. But how this is being billed, if it is being billed is a messy ball of string.

A new brand is necessary and a new pedigree of customer service must be installed. Over the years, we’ve seen a number of different businesses take up development for a myriad reasons. Supermarkets, retailers and housing associations are all learning to be property developers because of the lucrative opportunities it affords. In their own ways, these new brands can be uninitiated and uninformed, or simply have gaps in their service offering. Therefore, a bit of help may be greatly appreciated.

And just to remind everyone that in a few years (likely) there may be a New Homes Ombudsman on the scene to contend with! These teething problems exist because these new ventures are relatively young and because the transfer of good knowledge and best practice hasn’t had time to permeate yet, but it will in time.

If you’re looking for consultancy for your new brand or a level of service for your customers then we can help by installing procedures, training, systems or even our full package.

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