ao link
Twitter
Facebook
Linked In
Twitter
Facebook
Linked In

You are viewing 1 of your 1 free articles

Rent cut pushes associations to slash repairs

Associations across the sector reduced their spending on major repairs in 2016/17 due to the pressures of the rent cut, the Homes and Communities Agency (HCA) has said.

Linked InTwitterFacebookeCard
Picture: Getty
Picture: Getty
Sharelines

Housing associations spent 14% less on repairs in 2017 than 2016 #ukhousing

G15 chair Paul Hackett disputes HCA’s claim rent cut has hit repairs spending #ukhousing

HCA not yet concerned about fall in repairs spending #ukhousing

The largest reduction in costs for housing associations over the year was in major repairs, on which providers spent £2.1bn in the financial year – 14% less than in 2016, when they spent £2.4bn. Management costs, meanwhile, fell from £2.8bn to £2.6bn.

This is twice as big as the decrease in major repairs spending that Inside Housing found at the start of the year in an exclusive survey.

The HCA’s Global Accounts report said this was “to compensate for the rent reduction”, though it also forecasted that major repairs spend would increase again over the next few years.


READ MORE

Associations slash spend on major repairs as rent cut bitesAssociations slash spend on major repairs as rent cut bites
Barwell: 1% rent cut unhelpful for development plansBarwell: 1% rent cut unhelpful for development plans
The rent cut has sparked a revolution in thinkingThe rent cut has sparked a revolution in thinking

Jonathan Walters, deputy director for performance and strategy at the HCA, told Inside Housing he didn’t think a single year of reductions was too worrying.

He said: “If it was a trend that we saw year-on-year, then over time that would become an issue that we would be concerned about. I think reprofiling major repairs spend in one year is a perfectly business-rational thing to do.

“It’s not a case of reducing overall, it’s changing the years in which they take place, and I can understand why they would have done that in the first year. They pushed some of that spend a bit further out to be able to cope with the rent reduction.”

Paul Hackett, chair of the G15 group of London’s largest housing associations, said the reduction in unit management costs was “really good news”.

On repairs, he took a different view to the HCA, adding: “It’s difficult to say whether or not people are reducing their major repairs cost because of the rent reduction. I’d like to think the two things are not linked, that people are investing based upon the investment needs of the stock, and they’re driving efficiencies elsewhere, to deal with the rent cut.”

Linked InTwitterFacebookeCard
Add New Comment
You must be logged in to comment.