Getting value for money from our assets
Hexagon’s main financial asset is our residents’ homes; at the end of March 2015 they were worth around £421 million. In this section we look at some of the ways in which we are trying to make sure that we get value for money in several areas.
Making sure that the people who should be living in our homes actually are is really important. To clamp down on tenancy fraud we have been:
- Making use of web-based technology to assist with investigations;
- Working with local authority fraud teams for help with specialist checks;
- Members of the London Fraud Hub, an IT based data matching group; and
- Providing our Housing Officers with specialist training in this area, using a more ‘intelligence’-based approach to investigating tenancy fraud.
We suspected that Mr A. had sub-let his property because we suddenly received complaints about a dog in the flat. Our gardening contractor reported to us that the dog was fouling the communal garden. We investigated and found a man living in the flat who said he was a friend of the tenant and just flat-sitting while the tenant was working on cruise ships as a musician.
We had an email address for the tenant, so we contacted him. He claimed to have sustained an injury on a cruise ship and was being treated abroad. He stated his intention to return, but when a reasonable time had elapsed and his own date for return passed, we concluded that he would not be returning after all. We took successful legal action to repossess the property.
If you do think that one of your Hexagon neighbours has sub-let their home, let us know!
Rent is our main source of income, so making sure we let our empty homes as quickly as possible is always a top priority. We improved the average time it took to let our empty homes in 2015/16 to 34 days from 40 the year before; this is still worse than the mid-point (median) for other London housing associations and our target of 28 days. We made some big changes to the way in which we record data in 2015/16 which helped improve performance and we expect to see performance improve further in 2016/17.
Performance on rent loss deteriorated a little during the year – we lost 0.89% of our rents on empty homes – this would put Hexagon around the mid-point for housing associations nationally, but a little worse in London.
We expect this to improve in 2016/17 as we consider sale on fewer older homes.
When a home becomes empty or we survey a home to see what improvement work will be needed in the future, we consider whether bringing it up to modern standards is good value for money. We think about things like:
- How much the home is worth now.
- How much the work will cost.
- How much the property will be worth after the work.
- How easy it will be for us to let the home once the work is done.
- Whether the layout of the home meets modern standards.
Usually the answer is that we will spend the money needed now (if it is empty) or plan it for the future.
Sometimes, though, we decide that the best option is to sell the home. In the 4½ years leading up to March 2016, a total of 32 homes were approved for sale, and we used the income to help pay for improvements to existing homes and build new ones. The majority of homes (44/76) we reviewed were brought up to the current standards and re-let.
We are making some changes to this approach in 2016/17 using some specialist software and bringing together a lot more cost information to help us make our decisions.