Improving value for money through stock swaps: it can be done!

Improving value for money through stock swaps: it can be done!

A couple of recent news items led me to think about some of the similarities and differences in housing trends in Wales and England and some lessons on value for money that could be shared.

The national news story focussed on the shortage of new homes, the increasing costs of renting and the growing waiting lists for social housing in England. The National Housing Federation study1 predicts house prices increasing by 21% over the next five years, with home ownership falling to 63.8% of the English population over the next decade. The trade news story was Inside Housing’s reporting of two aspects of improving value of money: the analysis of operating cost variations, and the prospective homes swap by Knightstone Housing Association and Sovereign South West as part of service efficiencies.

The latest UK Housing Review2 confirms that outside of London home ownership is least affordable in the South West of England. Wales however has the most affordable home ownership ratio of mortgage costs to income, excepting Scotland and the North of England.

Why is that? Housing associations, local authorities and ALMOs have played their part through a combination of improved efficiency to deliver more with less and rationalisation to gain better value for money. This was not always the case.

In the mid-1990s when Tai Cymru (Housing for Wales) was in existence, I remember being called to a meeting of Chairs and Chief Executives of Welsh housing associations. The meeting was for Tai Cymru to deliver an edict that it expected housing associations to rationalise stock. Tai Cymru had done the analysis of operating costs, though they were equally concerned about services to tenants. They said that it made no sense for one housing officer to be driving west along the M4 to deliver services to tenants in an area where another housing association had its offices, and vice-versa. The initial response was not surprising – it can’t be done, what about VAT? etc. However, after a fair degree of pressure and following tenant consultation, the pattern of stock ownership across Wales was redrawn, with some two- and three-way swaps taking place and it has delivered improvements to tenants’ satisfaction and overall efficiency.

The transfer of 719 homes in Wiltshire from Knightstone to Sovereign, and 641 homes the other way in Somerset shows it can be done in England. There are now well-developed approaches to stock rationalisation3.

Don’t wait for the regulator to tell you how to do it.

Judy Wayne is a Director at Altair

1. Housing Market Analysis, Oxford Economics. July 2011
2. UK Housing Review, Hal Pawson and Steve Wilcox. CIH June 2011
3. See Location, location, location. Achieving efficiencies through stock rationalisation. TSA. Feb 2009