Posted on January 1st, 2015 in News
i.s.4 explains how our HFAT and HPlan tools can help you shine a light on what you and your business plan need to know.
Social landlords are businesses with huge asset bases and very large income and cost streams associated with that asset base and, as a proportion, very little else, particularly now that public subsidy is largely a thing of the past. What they can do, therefore, largely depends on the value that their homes are generating for to the business plan. The big question, therefore, is how do you understand and measure that value in a way that enables you to make better decisions?
There tend to be three traps that people fall into.
The first trap is allowing the mystique that surrounds the concept of financial value to obscure the fact that it is actually quite a simple thing to measure and use. The simple way is to focus on the net present value (NPV) of the net rental stream over the business plan period (typically 30 years). This an excellent proxy for the value that a rented home or group of homes is bringing to the business plan. It is a simple and sound concept once you are familiar with it. It is almost universally used by housing associations when assessing new development but remarkably seldom applied to existing homes. It is calculated from information that every social landlord, by its very nature, has in its mainstream systems. Difficulties (that certainly do occur) in calculating it are invariably to do with reliability of base data or the lack of robust management information, both of which simply highlight an information concern that needs to be tackled anyway.
The second trap involves lacking a focussed way of measuring the important, but less tangible, sustainability and performance issues that are more to do with neighbourhood than property. There is not a perfect way of measuring the current success and direction of travel of a neighbourhood, let alone the likely impact of that on a particular group of homes. But experience does show time and again that there are a number of readily obtainable indicators that can be used as effective warning signs. They tend to be ones that measure the direct views and actions of residents (turnover, satisfaction with area, resale RTB prices) rather than broader socio-economic information.
The third trap is the data challenge of doing the analysis at the distinctive group and type level at which useful strategic asset management decisions need to be practically made. Even when you try to keep it as simple as possible, data analysis for thousands of homes and hundreds of estates or groups is a considerable task. Add to that the need to get clear and succinct results and you do have the ingredients for an informational wood-and-trees challenge.
The answer is our easy-to-use but powerful excel-based tools to give structure to the process.
HPlan is for Councils and ALMOs that see the need for a two-in-one tool for HRA business planning and strategic asset management, in the post-HRA reform world. HFAT is for housing associations of all sizes and types. They are both low-cost tools developed by experienced practitioners with a deep understanding of how to assess future housing prospects. This is a powerful new way of helping landlords shine a light on the financial and non-financial performance of homes. It combines long-term financial assessment with a broader insight into popularity and prospects to give that crucial rounded judgement on where to focus efforts, and to point the best way forward for different groups and types of stock. It helps you bring together, and then analyse, the right set of information to really put your finger on housing performance using information already held in your own systems, other public information, and the knowledge of your own staff. The tools enable local knowledge and judgement to be brought in alongside hard information. With easy-to-understand results for a range of audiences, these can be reality-checked by the people with local experience to ensure final conclusions are robust and widely supported.
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