Regulator encourages stock rationalisation
The chair of the Homes and Communities Agency’s regulatory panel has suggested most housing associations should be considering stock rationalisation.
Speaking at the launch of a report from Sovereign Housing Association sharing its experiences of the practice, Julian Ashby told attendees: ‘Stock rationalisation is something that most of you should be considering.’
He said evidence suggests if housing associations have fewer than 50 homes in a local authority area then ‘costs are generally substantially higher than if you are more locally focused’ and that rationalisation of stock results in better management and improved services for tenants.
Mr Ashby also said it could generate funds for development because on average transferred homes are sold for 25 per cent more than ‘book value’.
The Sovereign report, which was produced by consultancy Ark, details the lessons it has learnt as a result of a series of transfers that have seen it shift 2,700 homes since 2006.
Chief executive Ann Santry said: ‘Stock rationalisation is likely to be an important feature of the housing landscape in the coming years as housing associations seek to improve customer service and operational efficiency in the context of government cutbacks and changes to housing policy.
‘Clarity of purpose and attention to detail is vital. Stock rationalisation projects are more likely to succeed if they fit within the parameters of a well-developed strategy.’
Sovereign’s key lessons for stock rationalisation
- The acute importance of a strategic approach to asset management and growth. Rationalisations should be strategy-led, not opportunity-led.
- The need for effective resourcing and high-level sponsorship of projects, both internal and external, by both organisations.
- The need for thorough due diligence and for trust and good relationship building at all relevant levels between the parties. The better the data, information and trust on both sides, the more straightforward the transaction.
- The benefits of a strong financial evaluation of the likely value of the rationalisation project, linked to strategic considerations and the possible alternative uses of the investment.
- The high value of good communications planning and execution in maintaining staff commitment, managing uncertainty, and establishing positive early relationships with transferring residents and staff.