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What lessons can be learned in dealing with tenants through the pandemic?

COVID-19 has thrown up a host of issues for associations to deal with involving their tenants. Steven Johnson assesses the long-term learnings, ranging from rent arrears to repairs and maintenance

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When the pandemic hit, many providers halted arrears escalation and moved their approach from debt collection to support provision (picture: Getty)
When the pandemic hit, many providers halted arrears escalation and moved their approach from debt collection to support provision (picture: Getty)
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COVID-19 has thrown up a host of issues for associations to deal with involving their tenants. Steven Johnson assesses the long-term learnings, ranging from rent arrears to repairs and maintenance #ukhousing

“Reliably attributing debt to the pandemic response will become an increasingly challenging grey area,” says Steven Johnson @Voicescape_hc #ukhousing

“To ensure a level of resilience, landlords will need to consider how they prioritise repairs to clear the backlog and reduce risk,” says Steven Johnson @Voicescape_hc #ukhousing

COVID-19 has forced housing associations to find new ways of delivering services and interacting with tenants.

Our research with housing leaders found that following a reactive phase to ‘keep the lights on’, we must prepare for permanent changes in behaviour, service delivery and landlord-tenant relationships.

Landlords must factor in the threat of future pandemics into long-term business planning. There are lessons learned from lockdown which will help inform future plans.

Income collection and rent arrears

As the pandemic hit, housing providers quickly recognised their role in supporting customers. The initial reaction was largely to halt arrears escalation and move the approach from debt collection to support provision.

One of the most confident forecasts to emerge from our research is that arrears will increase, both in volume and complexity, creating a greater need for more intensive and specialist intervention.

Providers expect a prolonged period of static debt and slow recovery, with an emphasis on repayment agreements to recover income sustainably.

Our research indicates that the systems and processes currently used by landlords to administer agreements are not as effective as they could be.

The majority of agreements are built on low-value instalments and frequent payment extensions can result in failures, creating a vicious cycle placing more resource pressure on time-poor income teams. Effectively understanding this delicate dance of resource and risk will become critical to financial planning and decision-making among senior leadership teams.


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Universal Credit

Challenges to income collection processes were compounded by the growing number of tenants making Universal Credit claims. Landlords are not only faced with more claimants, but also different claimants and new associated challenges.

Resource was required immediately to respond and support customers with claims.

However, more persistent pressures will build as a result of teams having to manage the higher volume of customers now responsible for paying rent from their Universal Credit payment.

Initially, many landlords tried to offset risk by applying for alternative payment arrangements (APAs) through the Department for Work and Pensions (DWP). For some, the use of direct payment APAs represents ‘secured income’, while others have started to move away from them as a result of extended waiting times and a high number of technical arrears.

Our insights show that in many cases, the use of APAs can result in an increase in arrears rather than a decrease – making them part of the problem, rather than the solution.

Evictions

Prior to any government measures, some landlords chose to make commitments not to evict tenants whose arrears had accrued during the pandemic. While this was an important measure, differentiated treatment of tenants based on COVID-19 could present a risk.

Reliably attributing debt to the pandemic response will become an increasingly challenging grey area. Given that this impact may continue to reverberate through society for years to come, landlords will struggle to differentiate between what is COVID-19 related and what isn’t.

“Reliably attributing debt to the pandemic response will become an increasingly challenging grey area”

In the absence of well-defined criteria, this becomes open to exploitation and fraud. When the time comes, escalation and sanctions will have to be reintroduced with care and caution to avoid damaging the tenant-landlord relationship and minimise the potential for reputational risk.

Identifying vulnerable customers

Housing providers sought to prioritise vulnerable customers and took measures to identify and contact them in the early stages of the pandemic. Tenants in assisted living schemes were easy to pinpoint. The challenge was identifying vulnerable tenants outside of these schemes.

This shone a light on data quality issues thought to be endemic in the sector.

As pressures on assisted living schemes grow, landlords should prioritise measures to improve the quality of their data to effectively monitor and engage with vulnerable tenants.

Repairs and maintenance

Repairs and maintenance was significantly disrupted during lockdown because of its reliance on face-to-face contact.

Many operatives were furloughed or redeployed to work on empty homes. Landlords are unlikely to be in a position to expand repairs and maintenance teams so waiting times for repairs will increase and impact customer satisfaction.

To ensure a level of resilience, landlords will need to consider how they prioritise repairs to clear the backlog and reduce risk. A reliable and robust understanding of how customer satisfaction impacts tenancy behaviours will become crucial to inform these judgements.

Lettings

Following an initial hiatus on new lets, some providers developed processes to allow new tenants to sign up remotely – albeit on a reduced scale. However, tenants were reluctant to move or are prevented from doing so because of practical and health considerations, which resulted in a growing backlog.

There’s a huge pressure to reduce the length of the sign-up process to generate new revenue.

“To ensure a level of resilience, landlords will need to consider how they prioritise repairs to clear the backlog and reduce risk”

The quality and pace of this process can have a significant influence on tenant behaviours and is a key lever for creating ‘high-quality’, sustainable tenancies. If landlords approach this with care, there’s an opportunity for them to manage expectations and establish rights and responsibilities to set the tone for the relationship.

Customer engagement

Beyond individual interactions such as making a payment or booking a repair, a positive relationship with an engaged tenant should be a strategic priority.

The quality of the landlord-tenant relationship has a knock-on effect on tenant behaviours and service demand, including rent payment and compliance.

Many providers believe that the opportunity presented by lockdown to connect – and stay connected – with customers will have a positive impact on the landlord-tenant relationship in the future.

It could also help to combat some of the risks that providers face in income and customer satisfaction.

If the future operating context is to be defined by increased pressures on services and the risk of more pandemic-related disruption, effective engagement with customers using clear, accurate and customer-centred messaging is now more important than ever.

Steven Johnson, chief customer officer, Voicescape

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