Risk management in the social housing sector
During the most recent turbulent times, risk management in the social housing sector has significantly increased in importance. Over the last three years, the UK has experienced unprecedented turbulence and uncertainty; Brexit, COVID and Russia’s invasion of Ukraine. Each of these has brought significant challenges to consumers and businesses.
The Sector Risk Profile published on the 20th October 2022, sets out the main risks facing the social housing sector.
It also details some of the actions registered providers should be taking to mitigate these.
The Social Housing Sector aims to provide quality, affordable homes. In the current economic climate, there are many barriers to this:
Building new homes
Building new homes will be more problematic. The cost of borrowing will increase due to higher inflation rates. Rising interest rates, higher cost of materials, supply chain issues and lack of workers too will all cause issues. Have you thought about how you can mitigate these issues?
Maintaing the current housing stock to a good standard is important. Simple issues can become much larger and more costly to fix if left too long. Material and labour costs and availability are currently cause for concern. High-profile cases where standards have not been maintained leading to health issues for residents have hit the reputation of the sector.
The latest high-profile case is the tragic death of toddler, Awaab Ishak. Awaab developed a respiratory condition due to the mould ridden property he lived in with his parents which eventually killed him. The investigation into the case by the Regulator of Social Housing is still ongoing. The social landlord’s government funding has been stopped until they can demonstrate improved compliance with their responsibilities.
For social landlords, this is now the time to ensure that all maintenance programmes get the prioritisation they require – in terms of time, labour, and money.
Rent arrears will continue to increase as people struggle to pay their rent/mortgage with the ongoing cost of living crisis. The rent cap will assist but it will only go so far. The rent cap also restricts the income stream for the social housing provider who may have to look to diversify to increase income.
How will you aid your cash flow? Do you know how far your reserves go? Are you able to diversify?
The demand for affordable housing is going to increase as the full effect of the UK’s recession is felt. What percentage increase in demand could you fulfil? How can you lessen the strain of demand?
Data security is always of paramount importance, but during economic downturns cyber-attacks rise in number and severity. Housing organisations hold a significant amount of data and so would be high on the target list of criminals. Cyber-attacks can be financially expensive as well as inconvenient as services can be disrupted. Clarion, the largest Housing Association in the country was attacked and is still rebuilding it’s systems since the incident.
Learn how our risk management software could help your organisation meet its 2023 business objectives and improve resilience please email: firstname.lastname@example.org.