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Housing stock management made easy

Housing stock management made easy

Housing Stock Management

 

Managing a portfolio of housing stock has never been an easy task.

A task made that much harder when people assume that buildings, by and large, look after themselves and also make the dangerous assumption that the information held about those properties is bang up to date. After all, they are making investment grade decisions using the data – so it must be okay. Right?

Well, what if it’s not? What if there are thousands of opportunities to leverage grant funding.  Millions to be saved by optimising your budget and years to be knocked off your to-do list by exploiting technology?

Since 2002 we have been working in the field of housing stock condition surveys. Not the familiar traditional way, but always by using technology. Firstly, via infrared surveys (hence the IRT of our name) and latterly via software analysis.

Let us explore the options on the table for the already thinly stretched, housing stock manager (apologies for missing out the variety of titles).

The two sides of housing stock management

On one hand the job is simple. Just make sure the buildings are fit for purpose. Keep the tenants happy and ensure the rent flows in on time without complaint. (I said simple didn’t I?) .

The above is hard enough, but consider the other hand – improve the value of the assets, reduce the spend on maintenance, ensure legislative compliance – oh and by the way, we just merged and here are another 10,000 homes to look after.

It’s daunting. Overwhelming even.

Housing stock management without trusted data

In 2010-2012 we surveyed 60,000 homes throughout Scotland for 83 separate housing associations and the findings were startling. Firstly, the information the Housing Associations knew about their stock was varied. Some knew almost everything, others very little, but all had blanks in their data we had to populate with rational assumptions.

Secondly, where a client did provide data such as a SAP or EPC rating from an outsourced supplier, invariably they were inaccurate.

The most revealing aspect of the survey for us was the actions taken. As even though we delivered compelling information and analysis on a spreadsheet, the clients still found it difficult to interpret and action.

Easy to use software for better housing stock management

We love our clients. We love them to bits. Their feedback has led us to create TheHouseSurvey.co.uk. Here they can analyse their stock at the click of a button. Find the best, the worst, the ones they can make the biggest difference to and the ones that qualify for grants. All mapped into Google and colour co-ordinated.

If you are reading this and are a housing stock manager, we would like to hear from you. We can help you meet your targets and take a load off your shoulders. We know your desk is creaking under the workload and we know the variables keeping changing. Just keeping up to date with legislation is a nightmare, let alone getting round to actually doing a retrofit to improve the stock.

What we must all remember in the sector of course is that we are walking a tightrope in two tonne shoes. Social requirements on one side, commercial reality on the other. Let’s not lose sight of why HA’s were formed in the first instance – that need hasn’t gone away. Yes “times they are a changin’” but people will always need a roof over their head, that’s the whole point. But as long as we live in a capitalist society, money will always inform the decision making process.

Our mission at IRT surveys is to align those needs, help you leverage funding, focus on quick wins and help do our part in getting people out of fuel poverty. All whilst improving the built environment for future generations.

We hear a variety of scenarios in the sector: Providers in Scotland are focused on the social impact and meeting their EESSH obligations whilst south of the border the focus is far more commercially oriented. In fact one client said saving energy for their tenants was altruistic – a philanthropic win they weren’t willing to invest in. They will remain nameless here, but it’s a bit of a short sighting view that doesn’t bode well for a long term sustainable portfolio.

Efficient stock is valuable stock.
Tenants spending less on energy means they can more readily afford the rent.
Rent on time, means a more stable company.

Running a viable Housing Association is harder than it once was. There are affordable and easy-to-use tools which can help you with your housing stock management challenges.  Click on the button below to discuss them and get your free, non-obligation quote.

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3 ways to maximise your portfolio energy performance

3 ways to maximise your portfolio energy performance

 

portfolio energy performance

Portfolio energy performance will soon be coming back in the news as 2018 heralds the dawn of a brave new Minimum Energy Performance Standard (MEPS). It effectively means 31% of the built environment becomes unlawful to buy, sell, rent of lease. That’s 1 in every 3 buildings. Imagine that for a moment: 85% of the office space in London is rented. That means tens of thousands of companies becoming homeless, were this legislation enforced in its current outline. Common sense says the legislation will be watered down, pushed back and diluted. This is inevitable as it is impossible to enforce and police. However, its objectives and ethos are solid and admirable, in principle. Improving buildings, making them more efficient means they become more desirable to rent and own. Desirability drives  price and value up. When buildings cost less to operate, their Per sqM-rental incomes can be increased.

The challenge for you as the portfolio owner or manager is one of optimising budget: Where do you start? Whom do you trust? Is there low hanging fruit or quick wins out there? What technology exists than can help?

Another consideration is data. What do you really know about your buildings? Would you bet your mortgage that whatever you know is actually accurate? The stakes are high.

Portfolio Energy Performance: Circumventing legislation?

As a company, we have been surveying buildings for 15 years using infrared technology to detect defects and quantify energy loss and we have yet to find a building anywhere in the country that matches up to the drawings and specification intended at its birth. Change of usage, extensions, refurbishments, dilapidations, cowboy buildings, adhoc maintenance, all contribute to a portfolio dataset that is far from perfect. Add in trying to meet legislative compliance on a shoestring budget and the whole thing goes pear-shaped very quickly.

Take for example EPC legislation, now almost 10 years old, meaning the early ones need re-doing next year, just like MEPS, its intention is solid and admirable. The implementation and adoption however has been less than perfect.

A client once pointed out a multi-storey office block he owned: 1960’s construction, precast panels, single glazed aluminium windows, asphalt roof with no insulation and the original HVAC system from the late 60’s. Located in a city centre, it was fully occupied with tenants. £250 bought him an EPC that said the building was C-rated. The client asked me: “what would you do in my shoes? Tell every tenant to move out for a year whilst I get the roof, walls and windows and heating system upgraded, or turn a blind eye?”. I pass the building regularly and I can tell you a few years on since that conversation, the building looks exactly the same and it remains full of tenants.

Under MEPS that bury-your-head-in-the-sand approach is dangerous. If there is finance in place to pay for the building – commercial mortgages for example – the bank reserves the right to review that mortgage every two years and are within their rights to withdraw any outstanding monies with just 7 days notice. It would be best then to mitigate that risk.

3 ways you can  maximise your property portfolio energy performance

1. Understand its true condition

Get your data licked into shape and see opportunities arise that may surprise you. Poor data means a poor understanding of the challenge ahead and leaves you exposed. It’s just too dangerous to contemplate. We have already written extensively on the subject of enhancing property portfolio starting with data collection.

2. Leverage any and all available funding to retrofit

Fast forward to a future where your data is full and accurate. Now you can simulate savings, programme works, tender work packages, manage their implementation and see the savings from your efforts. Managing the retrofit of course means revenue for the managing agent or surveying practice, but the portfolio owner will love you for it. You are reducing risk, being professional and optimising his budget. Contractors will love you as you reduce their cost of sale and you tell them exactly what you want and need. That saving to them ought to be passed onto you.

There is plenty of funding out there for retrofits. ESCO companies will 100% fund retrofits that deliver results at no CAPEX to you. Walls, windows, roofs, lighting, draft proofing, insulation – you name it, funding is easily secured if the business case stacks up. Organisations like the Carbon Trust and Energy Saving Trust have interest free money available to fund measures – you simply need to ask.

3. Constantly invest in the fabric

This sounds rather obvious, but building fabric degrades. Refurbishments have been an integral part of portfolio management since buildings have been erected.

Roofs are notoriously defectuous and won’t last for ever. You need to set aside money to patch and repair when the roof reaches the end of its life expectancy and budget for a total replacement. Ignore this reality and you will be faced with years of leaks, inefficiency, tenant complaints and stained ceiling tiles. Maybe tomorrows’ building will be owed by the manufacturers who will simply lease the fabric, replacing these buildings every 25 years and bearing the maintenance costs along the way. Until that day, it’s important to understand the value of a solid maintenance schedule and refurbishment programme.

Silicone seals around windows only last about 10 years, ignore this fact and water will find its way through and into the fabric, perhaps invisibly for years. Sooner or later someone will spot a damp patch somewhere and you will end up chasing it for years before rectifying the cause. Several thousands of pounds spent where only a fraction could have been spent as a preventative measure.

Invest today to save tomorrow.

Happy building = happy tenants = happy owner= happy cash flow for all.

 

What is best practice then in this cash-strapped, modern, post credit-crunch, Brexit’d devolved country of ours? Traditional surveying techniques may help and a fast emerging technology such as infrared or IRT, will definitely see problems the naked eye can’t. Huge portfolios can be assessed very cost effectively these days. Once data is captured, cloud based software can crunch the numbers, backfill the blanks in the assumptions, validate the data and enable rapid low cost simulations.

The internet of things will only improve this industry. Buildings will contact you and ask for help themselves. This already happens in aviation today. RollsRoyce engines talk to a central database and report health issues to an unmanned database. The software arranges an engineer, co-ordinates with a warehouse and ensure the right part is at the right airport on time to service that engine efficiently. Buildings will go the same way. It’s as inevitable as it is exciting.

Are you managing buildings, as a portfolio or facilities or estates manager? Are you concerned by the forthcoming MEPS and need to take action? Contact us today to discuss your challenges and hear how we can help you.

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