ASSET MANAGEMENT STRATEGY
2016 - 2020
Purpose
The purpose of this document is to set out the strategic direction and objectives regarding how the
Trust will manage its assets over the next five years.
This strategy document is aligned to support the following business plan objectives:
zz Super Brand
zz Strong Financial Position
zz Partnership Working
zz Active Developer
zz Building Community Capacity
Background
Watford Community Housing Trust was formed in 2007 as a result of a stock transfer from Watford
Borough Council (WBC). The Trust provides and manages 5,273 homes in two boroughs within
Hertfordshire, Watford and Three Rivers. Please see Appendix 1A for more detail on our stock profile.
At the time of writing, the sector has come under increased financial pressure due to a reduction in
rental income of 1% per year, which will occur through the duration of this strategy document life.
Our Investment Approach
The Trust’s strategic direction for our homes has been developed through staff and resident
consultation. The strategy is designed to set the direction for how we manage each of our homes
through the lifetime of the asset. The aim is to create sustainable homes which enhance our tenants’
lives and reduce their fuel bills, thus creating more affordable and sustainable tenancies.
The majority of our current tenancies are lifetime tenancies. This will change over the course of this
strategy, as we now let fixed term tenancies. Our future residents will expect technological advances
in our service delivery and in our homes. This will be matched with a higher expectation from
residents, particularly around self-service options.
ASSET MANAGEMENT STRATEGY 2016 - 2020
Figure 1 below shows the Asset Management Cycle upon which this strategy is based.
Our strategic direction and vision for our homes is as follows:
zz Asset Investment Model – The asset investment model (A.I.M.) will underpin the asset
management strategy. Implementation will help us to understand the Trust’s financial and social
performance, identify assets which don’t perform from a financial or social aspect and to realise
opportunity to increase revenue.
The model will use a two-stage approach:
zz
Stage 1 – Identify how our assets are performing from a financial and social
perspective
zz
Stage 2 – to prioritise and identify the correct mix of energy measures
and standard component replacement to most benefit our residents
Please see Appendix 1B for further details of the criteria used.
zz Level of Investment – Over the next five years we have provision in the business plan to
invest £45.5m in our existing homes through responsive repairs, major repairs and cyclical
maintenance. We intend to renew major components in a planned approach, with items such as
fencing and ground works being addressed on a responsive basis. Please see Appendix 1C for
more detail and our five-year investment plan.
zz Option Appraisal & Disposals – Assets falling outside of A.I.M.’s acceptable parameters will
be subjected to an option appraisal. The purpose is to understand the issues and find relevant
solutions. This could include: disposal, switching tenures, intensive housing management
intervention or physical works, depending on the particular issues. Equally we wish to examine
through an ‘opportunity option appraisal’ where we could maximise our income by examining the
best-performing areas/assets. For example, this could be tenure changes.
zz Whole House Investment Approach – We will deliver planned investment via our 21 community
areas, and utilise a ‘whole house’ approach to investment. This will be split between internal and
external works whereby works required within a five-year window will be completed at one time,
thus reducing cost and inconvenience to our residents.
zz Quality Standards – The A.I.M. model will help us to prioritise our investment programmes. We
will maintain our homes to the required standard as outlined in the Landlord & Tenant Act, Decent
Homes Standard and Housing Health and Safety Rating System (HHSRS). We will give choices to
residents with lifetime tenancies (within a window of five years) over the nature of investments
made to their homes. This will take into account a framework of available works from our A.I.M.
which will feature standard building components, smart technology and energy measures,
alongside advice on the use of the building.
zz Property Data – We will prioritise our survey programme by examining the results of the annual
A.I.M. to help drive our investment programme. There will be a rolling five- year programme of
ASSET MANAGEMENT STRATEGY 2016 - 2020
surveys, which will achieve 20% per annum. The aim is to achieve 100% stock condition and hold
data which is no older than five years old. We will combine this data with technology which will
allows us to predict component failures and adjust the lifecycle and optimum renewal time.
zz Delivery – In order to support the Trust’s goals of creating a strong financial position and delivering
consistent high levels of customer satisfaction and community investment, our approach is enter
into longer-term arrangements with partners to deliver our cyclical and planned work.
zz Sustainability – Currently our average SAP rating is 70, which is in line with our peers. The proxy
measure for affordable warmth is SAP 80. Over the life of this strategy our target is to achieve
an average of SAP 75. The Trust recognises as part of its planned investment approach and
integrated asset management strategy that works and approaches will be required to make our
homes more affordable for residents to heat and to reduce our impact on the environment. This
will be achieved through technology in the homes, property component upgrades and education
of residents living in our least energy-efficient properties. Please see Appendix 1D for further
information.
zz Asset Optimisation – It is recognised that the current operating environment means that a more
active asset management approach is required to maximise our existing assets and assist in
creating capacity, which is linked to achieving a strong financial position. This will be achieved by:
zz Land appraisals/banking of our existing land ownership to understand and maximise land which is currently underutilised or has low-density use, proactively or when void.
zz Undertaking garage site appraisals and future use to maximise income.
zz Through A.I.M. utilising properties for other tenures where this is appropriate and in line with our strategic objectives.
zz Maximising lease renewals through our commercial units, residential long leases (to include sale) and exploring the use of advertising billboards on our land.
Growth & Stock Rationalisation
It is likely that the HCA will lift the requirement to seek consent for disposal of assets. This will allow
us to activity manage our assets with more freedom. Driven by our A.I.M. we will rationalise assets as
appropriate and review potential opportunities to purchase stock, based on capacity, the business
case and our Development Strategy.
Resident Engagement & Community Investment
Engaging with our residents in a meaningful way is of paramount importance to us. We will engage
with our residents around the level of service and quality of products we are installing in their homes,
through our planned and responsive maintenance service. Asset related investment will be linked to
our Community Investment Strategy.
In order to engage effectively with our residents, we will:
zz publish planned maintenance programmes;
zz invite input in developing the quality standards and scrutiny of the service;
zz work with partners to maximise apprenticeship, work experience and training opportunities
though our major contracts and in-house delivery;
zz measure the impact of intervention linked to our Tenant Sustainment Strategy; and
zz agree the approach with the tenant representative body, the Gateway Membership Team
(GMT), and ensure GMT are present at the procurement stage of large contracts.
Maintaining & Servicing Our Homes
Given the current challenges in the sector, it is recognised that there is an even greater focus on
achieving efficiencies to maintain a strong financial position. The Trust will actively seek opportunities
for partnership working (joint ventures) through shared services where a ‘win win’ scenario exists, as
well as driving efficiencies and value for money to build capacity, as set out in the business plan.
We aim to be an organisation of choice for residents, achieving high levels of customer satisfaction.
ASSET MANAGEMENT STRATEGY 2016 - 2020
Through our ICT systems we will channel shift our services to offer self-service options online. This
will allow residents to access services at a time and place which is convenient.
We wish to embrace new technologies in our properties, where financially viable. We will pilot and
implement measures which can alert of imminent maintenance issues, health and safety or assist
with the monitoring of the environment in our properties to create efficiencies.
As part of the Trust’s drive to be a ‘Super Brand’ we will deliver the following:
Responsive Repairs & Voids – the Trust will be judged to a large extent by our residents on how
this service performs. We want to position the service to achieve an average satisfaction rate of
85%. Services delivered in-house will be run as commercial businesses, with the aim of comparing
favourably to external contractors.
The aims will be achieved by adopting the following approaches:
zz Reducing direct cost wherever possible through: self delivery options; the development of shared
services/alliances through joint ventures with other housing associations; and achieving materials savings to reduce our delivery costs.
zz Balancing and reviewing the Lettable Standard with reference to the business need to reduce
costs and the expectation of the incoming resident, to provide a reasonable void standard.
zz Continuous investment in the in-house workforce to promote upskilling, increase productivity and
improve first-time fix rates through ongoing training, recognising that labour costs are likely to
increase.
zz Development of ICT systems to streamline operational performance, monitor/manage the
service more effectively and drive productivity in our operations.
zz Adopting an integrated approach to delivery which includes standardisation of
materials and parts used through planned and response maintenance service.
zz Taking a joined-up approach to reducing void cost, regarding tenancy
sustainment and preventing tenancy failure.
Aids & Adaptations – It is recognised that the Trust, where possible and practicable, will assist
residents to continue to live in their homes through adaptations to their properties, where it’s
economically viable to do so. On transfer, the Trust made a commitment to fund this service which
will be reviewed in 2017. Minor adaptations will be run through our in-house maintenance service.
Where major adaptations are required we will utilise our budget, utilising any available Disabled
Facilities Grant (DFG).
Our key objectives are to:
zz Review how we allocate and incentivise moves to more suitable properties;
zz Keep under review the service received through Occupational Therapists (OTs) with the aim of
reducing waiting times for our residents;
zz Reduce waiting times on referral from the OT to 12 weeks for residents for major work, subject to
budget constraints; and
zz Move away from our historic approach of building extensions to properties, which is not seen by the Trust as providing good value for money
Planned Investment – As of 2016-17, we will deliver the majority of our planned works through our
contract with Keepmoat. We will develop a five-year investment plan based on assets which meet the
organisation’s objectives, as derived through A.I.M. This arrangement has the potential to last for 10
years (five plus five). The aim of this contract is to achieve the following strategic objectives:
zz Customer satisfaction of 90%
zz Increased value for money compared to historic delivery models to include a shared saving model
and a 7% saving
zz Monitoring of the real-life performance of material and specifications in our homes
ASSET MANAGEMENT STRATEGY 2016 - 2020
Cyclical Maintenance & Compliance – As a social housing provider we are required to adhere
to a number of statutory areas and keep records to demonstrate compliance in these areas. As
technology and legislation develops this process will become more complex, particularly as our new
properties come on stream.
The current areas of compliance can be reviewed in Appendix 1E.
We wish to achieve the following strategic objectives:
zz Establish ICT systems that accurately record compliance and are automated
zz Implement robust systems and processes which can withstand scrutiny and ensure the Trust is
compliant
zz Develop and maintain comprehensive health and safety procedures.
Action Plan
The Board will review progress on an annual basis as per the objectives outlined in the Asset
Management Strategy. High-level actions with timescales are outlined in Appendix 1F- Action Plan
Appendix 1A
The Trust provides mainly general needs accommodation and also manages 345 leasehold
properties, one hostel for Watford Borough Council (WBC) and a total of 12 sheltered housing
schemes. The Trust is engaged in non-social housing activity via a market rent offering through the
Clarendon Living brand, with one scheme delivered to date.
See below for the full stock breakdown (as of February 2016) by tenure classification and property
archetype.
Stock
General Needs Housing
Market Rent
Managed For Others
Sheltered Housing
Commercial (Shops)
Garages
Affordable Rent
Sub Total
Leasehold Properties
Shared Ownership
No. Dwellings
4,146
21
129
514
21
1,271
36
6,102
368
86
Sub Total
Total=
454
6,556
Archetype
Bedsit
Block
Bungalow
Flat
House
Total=
No. of Assets
389
297
94
1,896
2,738
5,414
The stock portfolio has a relatively mixed age profile, albeit diverse. The majority of stock was built in
the 1950s and 1960s. The age profile is summarised below:
ASSET MANAGEMENT STRATEGY 2016 - 2020
In terms of construction types we have the following breakdown which is derived from the properties
surveyed (excludes blocks and other non-dwellings):
Appendix 1B
The purpose of the A.I.M. is to assist the Trust to:
zz Understand how community areas and assets perform on a financial basis;
zz Drive planned investment decisions and agree suitable investment caps;
zz Allow us to understand the impact of applying measures to the property via standard works,
improvement works, and technological improvements;
zz Take management actions such as educating residents around energy use in their homes;
zz Assess the cost of investment through capital/revenue and staff cost versus which measures
provide the best return to the Trust and our residents, to help drive and prioritise our investment
decisions.
The key data criteria for the A.I.M.:
Demand
zz Void loss
zz Turnover of stock
zz Re-let time
zz Long term voids in the scheme or area
zz Transfer requests
Environment & Community
zz Anti-social behaviour incidents by category
zz Length of residency
zz Resident satisfaction (STAR) with the overall service provided by the Trust and customers’ view on
the overall area in which they live
Socio-Economic
zz Rent arrears
zz Indices of Multiple Deprivation (IMD) 2010, overall, income, education, barriers to housing and health
zz Energy performance
ASSET MANAGEMENT STRATEGY 2016 - 2020
Opportunity
zz Market value to social value represented as yield
Redevelopment opportunity rating (brief review of estate plans)
Financial Performance
Net Present Value (30-year projection)
zz Expenditure vs income
zz Rent
zz Service charge (income)
zz Housing management costs
zz 30-year planned costs
zz Reactive maintenance cost and voids
zz Overhead costs
zz Major regeneration (outside of standard planned maintenance)
zz Energy works
zz Caretaking (cleaning) and grounds maintenance
zz Loan securitisation
GIS (Non Scored)
This criterion is for information only and will be used through a GIS system to graphically display the
output of the data as a management tool. The above criterion will also be displayed as an example of
the overall scheme ranking of demand.
zz Estate environment rating, star rating, quality of environment (green spaces smq), layout of
estate, opportunity for infill development (relies on client mapping data)
zz Welfare reforms, under-occupation ‘bedroom tax’
zz Opportunity rating, yield, social rent to market rent
zz Decent Homes potentially and non-decent
zz Transport links, distance to trains, roads and buses from the schemes
zz Average planned spend per property (10 years)
zz Credit Rating Data. Linked to opportunity rating and yield
zz Bedroom tax locations
zz Tenant profiling information
zz RTBs
Appendix 1C – Property Spend Profile
Appendix 1D – Sustainability
In order to improve our residents’ lives and to build community capacity our approach is to:
zz Undertake financial assessments before letting to review the affordability of the property from an
energy performance viewpoint.
zz Engage and educate our residents on using their homes in a more energy-efficient manner, as
well as tackling fuel poverty though targeted campaigns.
zz Adopt integrated works packages which include smart technologies to improve the energy
consumption of our properties.
zz Seek funding streams in the form of grants, which complement our strategic direction and
support delivery.
zz Prioritising properties which have a low SAP rating (classed as SAP E,F,G) and bring them up to a
suitable standard by 2018
zz Source products and materials which can be recycled and, through our contracts and our own
delivery activities, we will divert 65% of waste from landfill
zz Benchmark our progress through suitable means against best practice within the social housing
sector and the wider housing industry.
ASSET MANAGEMENT STRATEGY 2016 - 2020
Appendix 1E
Listed below are all of the property-related compliancy requirements, which the Trust will adhere to:
Appendix 1F – Action Plan
The actions outlined will support the strategy and will be monitored by the Board:
Watford Community Housing Trust
Gateway House
59 Clarendon Road
Watford
Hertfordshire
WD17 1LA
T 0800 218 2247
E [email protected]
W www.wcht.org.uk
@watfordgateway
/watfordcommunityhousingtrust
Watford Community Housing Trust has charitable status
and is registered with the Homes and Community Agency.
Registered Industrial and Provident Society No: 30183R
Registered Housing Trust No: L4495