Written by Luke Hurd, Chief Executive, CHIC
The social housing sector is investing more heavily in its homes (of which there are more than 4.4m nationally) and housing providers are being compelled to think differently about how they manage their assets. Strategic Asset Management has emerged as the discipline that helps landlords to make forward thinking decisions about how they invest in their homes and communities.
Strategic Asset Management – What Is It?
The term Strategic Asset Management combines two familiar concepts. Strategy is about identifying long term objectives and determining the best route to achieve them. Asset Management is the systematic process of developing, maintaining, upgrading and eventually replacing assets in the most cost effective way.
Within social housing, and for CHIC’s members, Strategic Asset Management can be viewed as the long term plan for investing in and maintaining residents’ homes.
Housing Assets Are Core to Business Success
Housing assets are far more than just physical buildings. They are people’s homes and thus the foundation upon which housing associations and local authorities deliver services, generate income and support communities.
Maintaining homes effectively has several positive outcomes: residents homes are well maintained, neighbourhoods are more sustainable, and tenancy turnover is reduced. For providers, strong asset performance means stable rental income and financial resilience, allowing for continued investment in homes.
For this reason, asset management should be viewed as the core business activity for social landlords that influences almost every aspect of organisational performance.
It’s Complex!
A challenge with maintaining housing stock effectively is its complexity. With homes of varying ages, construction types and maintenance requirements and a lot of flats, there is no ‘one size fits all’ strategy. Many assets have already past or are reaching the end of their originally intended life cycle and there are several new challenges to compound these issues. Importantly, new regulations such The Building Safety Act and Awaab’s Law mean that prioritising resident safety and tackling damp and mould, sometimes more difficult in older stock, must now be seen as a priority. Further. increased pressures to push for net zero mean regular upgrades and investments in new technologies have moved from ‘nice to have’ to a crucial investment requirement.
Many residents’ homes were built under now outdated standards, and before we started to feel the effects of climate change. Providers now run risks of resident health and livelihoods being negatively impacted by poor housing standards. Strategic asset management provides a structured approach to meeting evolving safety, quality and sustainability standards. By taking a long-term view of their housing stock, landlords can identify investment priorities and deliver them in the most cost effective way possible.
Overcoming Delivery Challenges
Delivering an effective asset management strategy is multifaceted and often intricate in its planning. Historic investment cycles can create peaks in demand for major components such as kitchens and bathrooms, placing pressure on budgets and resources.
At the same time, housing providers must balance planned maintenance with building safety requirements, damp and mould remediation and decarbonisation programmes. The challenge is to integrate these workstreams wherever possible. For example, combining window replacement programmes with insulation upgrades to maximise value. With increasing pressure on resources and contractor capacity across the sector, long term planning and collaborative approaches to delivery are becoming more important than ever. Landlords must also consider the individual diverse needs of residents as a requirement of the consumer standards.
Understanding Asset Performance and Spend
Effective strategic asset management starts with understanding how assets perform and where investment will have the greatest impact. This requires organisations to assess property condition, customer expectations and business objectives, while also accounting for availability of resources.
Key questions include:
- Is asset data recent and reliable?
- Are we using all the data we have intelligently?
- Which homes are performing best and should continue to be invested in?
- Which homes require more intervention?
- Is investment being directed to the right places.
Growing investment demands from building safety, compliance and net zero commitments mean the quality of asset data has never been more important. With asset management accounting for a significant proportion of housing landlord expenditure, and costs continuing to rise, organisations must focus on maximising long term value rather than simply reducing short term costs.
Ensuring Success: Following the Golden Thread
Ultimately, successful strategic asset management is about more than maintaining homes. It is about delivering better outcomes for residents. Achieving this requires a clear and consistent aim that connects strategy, asset intelligence, investment planning and procurement and service delivery.
When housing providers align long term investment plans with robust data, clear service standards and strong contractor partnerships, they are better placed to make informed decisions and avoid inefficient work. With a strong, annually rolling order book, contractors can invest in employing the right workforce – which we desperately need to engage.
As resident expectations continue to rise and the regulatory landscape evolves, those organisations that take a proactive, joined up approach to asset management will be best placed to deliver safe, sustainable and high quality homes, while ensuring every investment creates lasting value for residents and communities.
How CHIC can help
CHIC offers housing providers a fully managed service, supporting organisations throughout the entire asset management journey, from strategy and planning through to procurement and delivery.
Our Regional Heads of Member Services work closely with members to understand their local challenges and organisational priorities, providing tailored support every step of the way.
To find out how CHIC can support your Strategic Asset Management journey, get in touch with your Regional Head of Member Services or contact the CHIC team today.
