Social Landlords Cut Repair Budgets

A recent survey of 100 social landlord associations by Inside Housing, the trade magazine of the housing profession, has found that social landlords are cutting their repair budgets.

This is in response to the Government announced intention to cut rents by 1% a year for 4 years. The cut was announced in July of the financial year 2015/16, with the result that associations reduced their expenditure on repairs by 7.3% to £386 million. Planned maintenance was also hit, with a reduction of 1.6% to £630 million.

John Kiely, Director of Housing and Public Sector with Savills, is convinced this was down to the rent reduction and that some associations ‘put a complete hold on their investment’ following the announcement. A number of associations have been very open about the situation, Hyde Group reduced its’ major repairs spend by 51% to £1.2 million; the amalgamation of Raglan and Jephson, now re-named Stonewater, has 30,000 properties and cut its’ expenditure on major repairs to £4.9 million, a reduction of 28%. Planned maintenance budgets have been cut by 16% to 5.9 million.

These are significant sums. As restraint in spending has been the watchword for several years, it is to be assumed that associations have pared their repairs budgets as much as was reasonably possible – but now they must do more. Will severely reduced budgets allow them to operate within their own repair schedules? It seems something will have to give, and that will almost certainly be repair standards and customer satisfaction.

So, social landlords are looking at reducing their service because the rents are reducing. What of the private landlord, who is finding his rents cut when tenants are dependent on the housing element of Universal Credit, generally at a lower rate than market level rents.

If their properties need repairs, they are faced by rising costs when tradesmen are needed, material costs rising. They may not be able to do repairs as speedily as they would wish. They explain to the tenant that it will be done as soon as possible. The tenant naturally wants his repair doing immediately, if not yesterday, so approaches the Environmental Services. It will depend on what the repair is and its’ impact on the tenant, but they are unlikely to have any sympathy for the landlord. The repair must be done, or they will send people in, who will do the repair and then invoice the landlord – who will find the price is far higher than they would need to pay their regular plumber/electrician.

Will statistics ever appear to show how the reduced spending on repairs is impacting on tenants? That is doubtful. Whereas the private tenant has the option of turning to local authority enforcement teams, social tenants have no-one to complain to, other than those that are failing them. It is a ‘conflict of interest’ for enforcement officers to take action against social landlords.

As always, it appears there is one rule for them and one for us – social landlords and private sector landlords, in this case. All private sector landlords want is fairness, some realisation of the valuable job they do in providing much-needed accommodation. But at least in this, it will see private landlords maligned and blamed, when the financial situation is against them, whereas social landlords will be seen as victims of Government decisions.

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