Asset Management Strategy
- Introduction
This document sets out our strategic approach to asset management which in turn is linked to our vision to be
'...the provider of choice of high quality homes and services and to create homes everyone feels proud to live within'.
The Strategy has been drawn up to complement the Association's Business Plan and sets out priorities for the Improvement and Physical care of the housing stock. It is designed to ensure that the Association's housing stock meets the needs and standards required now and in the future. Accordingly our properties should be:
- In good condition
- In the right location
- Of a design that fits its modern purpose
- Asset Profile
Hafod Housing Association was established in 1968 and currently own around 3200 properties spread over seven Local Authority areas in South Wales. As an active developer the majority of our homes are purpose built since inception. We also have a significant interest in a number of properties designed to help families into home ownership (shared ownership and Homebuy).
The rented stock is split across several local authorities:
|
Local Authority |
Total |
% by local authority |
|
Bridgend |
909 |
28.6% |
|
Cardiff |
1092 |
34.2% |
|
Merthyr |
151 |
4.8% |
|
Newport |
7 |
0.2% |
|
Rhondda Cynon Taf |
479 |
15.1% |
|
Torfaen |
98 |
3.1% |
|
Vale of Glamorgan |
444 |
14.0% |
|
TOTAL |
3180 |
100.0% |
We work in areas where there is a high demand for housing for all tenures, with vacancies generally heavily oversubscribed by qualifying applicants. The addition of new homes for affordable rent remains a key objective for the Association. We are also interested in developing a wide range of housing products for sale and shared ownership, market renting, and management of private sector housing.
The rented stock can be further split between property types:
|
Property Type |
Total |
% |
|
Flat |
1224 |
38.5% |
|
House |
1875 |
59.0% |
|
Bungalow |
48 |
1.5% |
|
Other |
33 |
1.0% |
|
TOTAL |
3180 |
100.0% |
This split by property type further enhances the popularity of our homes.
As far as the age of the stock is concerned this ties back to our development profile. Within the table below age refers to the new build or rehabilitation handover date. Stock which has been sold in the intervening period is not shown.
|
Age Band |
Total |
% |
|
Pre 1980 |
299 |
9.4% |
|
1990-2000 |
2334 |
73.4% |
|
Post 2000 |
547 |
17.2% |
|
TOTAL |
3180 |
100.0% |
1. Maximising the Value of Stock Investment
The Association has finite resources to expend on asset management. These resources must be managed carefully to derive maximum benefit to:-
- Keep dwellings in a good condition and achieve value for money in the way building maintenance and investment is procured
- Provide an appropriate balance between responsive maintenance and planned/cyclical works
- Meet the requirements laid down in our Affordable Warmth Strategy
- Meet the Welsh Housing Quality Standards where feasible.
A series of inter-linked initiatives covering the following areas have been developed in furtherance of the Strategy:-
Procurement
Partly in consequence of the introduction of the Welsh Housing Quality Standard in November 2003 and the expansion in our investment ambitions, the Association radically changed the way it procured its Major Works and embarked on a partnering arrangement with several local SME's. Supply chain management and partnering arrangements are employed to foster greater efficiency in the process. Since 2004, and in consultation with residents, the Association has procured all its planned and cyclical work in this way. The arrangements are kept under annual review, to ensure the benefits of reduced tendering costs, reduced construction costs and construction time, minimal defects and high satisfaction levels from residents are sustained. This approach continues to evolve and a number of Framework Agreements have been developed to this end.
Planned Improvements
The Association has a major programme of planned maintenance improvement works which covers all major components. We seek to achieve economies by replacing components just before they would otherwise require responsive repairs, anticipating changes in standards and reducing future requirements for cyclical and responsive repairs.
The major components planned for replacement include kitchens, bathrooms, heating systems, boilers, windows, doors, rainwater goods, fencing etc. The highest cost components requiring replacements (including VAT, but excluding fees and inflation) over the next five years are set out in the Table below:
|
Components |
Current Remedial Costs (£) |
% |
|
Bathrooms/Showers |
£3,895,000 |
24.39 |
|
Kitchens |
£3,261,500 |
20.43 |
|
Central Heating & boilers |
£2,333,000 |
14.61 |
|
Electrical Installations |
£2,186,000 |
13.69 |
|
Windows & Doors |
£1,728,000 |
10.82 |
|
Walls/paths |
£920,000 |
5.77 |
|
Roofing |
£580,000 |
3.63 |
|
Fencing/Gates |
£402,000 |
2.52 |
|
External Render |
£395,000 |
2.48 |
|
Gutters/RWG's |
£265,000 |
1.66 |
|
Totals |
£15,965,500 |
100.00 |
The following table splits this expenditure by year:
|
Year |
Expenditure |
% |
|
2010 |
£6,359,800 |
39.83 |
|
2011 |
£3,235,100 |
20.26 |
|
2012 |
£3,018,000 |
18.90 |
|
2013 |
£1,801,300 |
11.28 |
|
2014 |
£1,551,300 |
9.73 |
|
Totals |
£15,965,500 |
100.00 |
The actual expenditure required for specific schemes each year is of course subject to detailed assessment in line with detailed technical surveys and the planning of the commissioning effort.
Our investment approach is 'elemental' rather than 'whole-house'. This approach tackles disrepair and lack of amenity across a larger number of homes. Where applicable we try to concentrate our activity on specific locations to bring about better economies of scale and more efficient management of output.
Within the Devco Consortium umbrella we have reviewed in detail scheme specifications to ensure that planned maintenance work complies with the requirements of the Welsh Housing Quality Standard. Currently the planned/cyclical works are procured via a Partnering agreement with several local building contractors following detailed consultation work with residents.
Cyclical Decoration
We have an external and internal (communal areas) programme of cyclical maintenance every six years to prevent physical deterioration in the stock. This cycle is based on a partnering arrangement which provides a six year warranty on all paint finishes.
Planned Service contracts
Service contracts are in place to cover the maintenance and improvement of specialist mechanical and electrical equipment such as fire alarms, lifts, warden call systems and fire detection equipment.
Gas Servicing
A comprehensive service contract is in place for the annual servicing and repair of domestic gas appliances such as boilers and fires including checking of smoke alarms, CO detectors and cleaning of fans.
Electrical testing
A programme of electrical testing electrical testing is in place to ensure compliance with current regulations. All properties are checked at least every 10 years.
Asbestos Management
The Association has in place an Asbestos Management Plan and is currently working jointly with the DEVCO Consortium on updating the Asbestos Policy. This management plan is designed to ensure the Association meets its obligations which are set out in the Control of Asbestos at Work Regulations 2006. An asbestos register has been set up to record properties contain asbestos and is used to provide contractors with information prior to carrying out works via the works order. The register is regularly updated. All residents are advised of any risks. The Association regularly seeks specialist advice to ensure compliance with all legislation during the execution of the planned works in accordance with CDM Regulations.
Energy Management
The Association has in place an Affordable Warmth strategy to help reduce fuel poverty for tenants which includes such measures as new A rated condensing boilers, cavity and loft insulation. A system is in place to record where properties have received insulation measures.
Energy Performance Certificates are carried out by in-house qualified staff on all void properties and this information is also used to identify where insulation measures are required.
Tenants are signposted to relevant sources of energy advice as part of our wider financial inclusion and income maximisation approach.
Productive relationships will be nurtured with utility companies and other partners to maximise the value and impact of our work. This will complement the increasing application of sustainable and renewable technologies.
Stock condition surveys
A 20% rolling programme of surveys is annually carried out by our own 'in house' surveyors. The survey data permits our stock condition database to be updated and in turn allows for effective forecasting and budgeting and is fed into our Business plan.
The following master component table holds the expected life of the key components of the Association's properties in line with the guidelines advised by the Welsh Assembly. It is reviewed annually by the Maintenance Manager.
|
Component Item |
Estimated Life |
|
Kitchen |
15 Years |
|
Heating Boiler |
15 Years |
|
Bathroom |
25 Years |
|
Radiators |
25Years |
|
Timber Doors |
20 Years |
|
Composite Doors |
25 Years |
|
Timber windows |
25 Years |
|
Pvcu Windows |
30 Years |
|
Electrical Rewire |
30 Years |
|
Electrical Testing |
10 Years |
|
Smoke Detectors |
10 Years |
|
Roof |
50 Years |
|
Rainwater Goods |
25 Years |
|
Electric Shower |
15 Years |
Welsh Housing Quality Standards
In July 2001 the National Assembly for Wales approved the National Housing Strategy for Wales 'Better Homes for People in Wales' Later in November 2003 the Welsh Housing quality Standard was introduced (since amended in July 2008). The Association has made a commitment to ensure that it's properties are:
- i) In a good state of repair
- ii) Safe and secure
- iii) Adequately heated, fuel efficient and well insulated
- iv) Contain up to date kitchens and bathrooms
- v) Well managed (for rented housing)
- vi) Located in attractive & safe environments
- vii) As far as possible suit the specific requirements of the household (Specific disabilities).
We have made a commitment to ensure our properties meet the required Standard and have been working to the Standard since 2004. The Association has previously consulted with residents to confirm programme priorities. Notwithstanding this Hafod has teamed up with the other members of the DEVCO Consortium and has agreed to further develop a joint approach to the Standard. Tenants are at the heart of the Association's efforts in delivering and monitoring the Welsh Housing Quality Standard. The following principles are being applied:
- i) Tenant Participation Compacts will provide the appropriate overarching mechanism for the commitment to involvement in developing and implementing WHQS.
- ii) Tenants project groups will contribute to the assessment and achievement of the standard.
- iii) Tenants will be given choices over design and colour for relevant schemes.
- iv) Tenants will be informed of proposed works on an annual basis before the commencement of the programme.
- v) The Association will publish and update a forward programme which sets out planned investment for future years e.g. 5 years.
Adaptations to Homes for People with Disabilities
The Association is committed to addressing the needs of all its tenants and undertakes measures such as aids and adaptations in order to enable to stay in their homes for as long as possible. The Association assists tenants in taking up Physical Adaptation Grants, and works closely with Occupational Therapists from various Local Authorities. Other needs are addressed within the terms of our Targetted Services Policy.
Fire Risk Assessments
The Association has completed a programme of Fire Risk Assessments to all of its Houses of Multiple Occupation (HMO's) as well as the associated Fire precaution and fire alarm installations. A programme of Fire Risk Assessments has also been completed for the communal areas of general needs flats and the associated works are being completed on a rolling basis with reference to the risk.
Responsive Maintenance
The Association actively maintains a list of contractors who carry out voids and reactive maintenance work. At present Hafod uses a schedule of rates for pricing void properties and labour and materials for reactive maintenance. This procurement approach is regularly tested in terms of quality of service and value for money. All gas servicing and plumbing and heating repairs are carried out via a bespoke contract which is periodically updated and market tested.
Overall approximately 6000 responsive repairs are carried out annually (excluding repairs under the plumbing and heating contract). Hafod recognises that the provision of an effective repair service is paramount to tenants and must be delivered in the most cost effective way.
|
Priority |
Average days to Complete |
Number of jobs |
|
A (24 hours) |
0.97 |
844 |
|
B (7 days) |
6.0 |
3101 |
|
C (28 days) |
22.49 |
1810 |
|
Total |
10.45 |
5755 |
The Association uses information from this service to inform and update both its stock reinvestment plans and property database, with particular attention to components with abnormally high failure rates and dwellings with high responsive repair costs.
Void Maintenance
The Association has several policies that relate to dealing with void repairs as well as a Minimum Relet standard. The objective is to ensure properties available for reletting are both safe and attractive and safe for new tenants.
- Maintaining a Balanced Stock Portfolio
Development
Hafod's development service is provided by it's parent organisation Hendre, dealing with every aspect of the development process from inception through to completion. All new developments incorporate:
- Egan's 'rethinking construction' principles, fostering long term partnering arrangements with contractors, consultants and Local Authorities.
- Sustainability principles with the emphasis on green and environmentally friendly design that is striving to reach the Code for Sustainable construction level 4.
- Revised and updated standard specifications on design, materials and future maintenance which incorporate whole life considerations.
In responding to housing need we continue to build new stock and selectively acquire existing properties.
Obsolete Dwellings
There are a number of reasons why a property may cease to meet the Association's strategic requirements and become obsolete. The following indicators will be used in making informed judgements:
- All properties where there has been a vacancy lasting more than 13 weeks
- All properties where there has been a re-let period of more than 13 weeks and where there have been more than four refusals
- All estates or blocks where the rent losses due to voids have been more than 5% in the last year
- Any individual housing unit where there is a need to spend a considerable amount on repairs in the next 12 months. (presently £20,000 for property with 2 or more bedrooms; £10,000 for property with 1 bedroom or bedsit)
The profile of the stock condition survey will be adjusted in line with properties where we spend the most on day to day to repairs.
Customer Satisfaction
A variety of vehicles are used to secure feedback into the service. These will be kept under review and strengthened. Useful input into service development will continue to be secured from our Maintenance Group, comprising officers and service users.
On-going satisfaction with reactive repairs will be measured from the satisfaction slips issued with each order generated. Where the Association carries out planned and cyclical works, we will send each tenant a Key Performance Indicator form to fill and return. Targets for satisfaction levels have been set and high levels of customer satisfaction are being recorded.
Securing Added Value
Hafod Housing has created a welcome increase in work for the local communities in South Wales and the WHQS programme will provide continuity and sustainability of employment by the continued use of small to medium enterprises both in construction and the supply chain. This is consistent with our wider objective of retaining the value of the investment made within the communities where we work.
The quality of a neighbourhood is at least as important to residents as the properties we maintain. Decisions on where to invest and where to avoid or disinvest will be supported by appropriate neighbourhood information. The Association will continue to develop new homes and invest in existing homes in areas presented by various challenges. Central to this approach will be our commitment to build and sustain local communities via our Community Investment Strategy. .
Maintaining a relevant approach
We will continue to consult with Board, staff and customers to ensure that the Asset Management Strategy is consistent with the:
- Business plan
- Procurement and strategy
- Operational plans
- Customer expectations
- Delivery of services
The asset management strategy is designed to cover a three-year period, and at the end of that time will be subject to a comprehensive review. An action plan is attached at appendix 1 which identifies key areas for review over the current year. An annual update against the targets will be provided to the Board.
Financial Planning and Business Plan
The stock condition data base will be used to feed figures into the thirty year business plan. This database incorporates all current component replacement costs (including works to bring properties up to WHQS) and anticipated life cycle replacement periods for all property types. The business plan model will make a provision for the effects of inflation over the business planning cycle. The review of this business plan is carried out annually.
Based on the Welsh Assembly's Regulatory code the Association aims to carry out 70% of its maintenance work on planned maintenance and 30% on reactive maintenance.
The objective of the 30 year business plan is to ensure where practicable that the Association can fund its maintenance costs as they fall due from revenue (i.e. rental stream and other income) sources. Where cash funded requirements necessitate the drawdown of new loan funding, this is done on a global Association basis against existing facilities.
