When lockdown measures were first introduced 12 months ago, the sector already had a full plate. The expected publication of the Social Housing White Paper, changes to building safety regulation and the challenges of zero-carbon were amongst the complex agendas being navigated by boards and executives. Who could have anticipated what happened next? Social landlords had to respond to protect the safety of their residents, their people and their communities while maintaining service delivery and not losing sight of their strategic priorities and financial sustainability.
As leaders responded it was crucial to understand the implications of decisions, the impact of the unfolding crisis and the correlation between activity, performance and outcomes. Within two weeks of the first lockdown Housemark pivoted too - we have been tracking the impact and results monthly to help the sector quantify and contextualise performance. Having delivered a full 12 months of insight and analysis to help drive recovery and action our unique sector-wide perspective of ‘normal times’ enabled us to tell the story of the sector’s journey, ‘adapted new normal’ and understand the characteristics of the those who have fared best.
Throughout 2020, we saw a consistent relationship between an organisation’s ability deliver services in an agile way and increased performance. Landlords and contractors who pivoted quickly and confidently by making targeted decisions backed up by reliable data saw their performance hold up, whilst those who hit the pause button or entered a holding pattern lost ground. We saw this trend further through the summer with some providers electing to return to what had been done before, whilst others continued to accelerate and embed what they had learned during the first wave of the pandemic.
Digitalisation tipping point
Globally we know that consumers vaulted five years on their digital adaptation during the early pandemic, as the world found new ways of living, learning and consuming and the housing sector was no exception. Despite well publicised efforts, progress on the digitalisation journey had previously remained patchy. All this changed in 2020. We saw an interesting correlation in the data and narrative - those landlords who were already taking steps to digitalisation, were able to accelerate their plans rapidly and this single decision enabled the rapid pivot of services required which in turn delivered stronger performance and enhanced service continuity. In July we learned that 38% of landlords had accelerated the implementation of tenant portals with the vast majority (90%) reporting active digital transformation in the delivery of one or more services.
Service transformation matters
We have seen varied performance across key areas like arrears, repairs, and lettings, regardless of landlord type, size, or location and through our on time monthly data we have been able to analyse the impact of different approaches to service delivery to quantify the effectiveness of decisions and action. The diverse range of experiences and performance out turns from landlords across the sector emphasise the importance of understanding your own set of circumstances, external context and the drivers of performance. The most recent national lockdown produced the biggest variations in approach, as those who had pushed ahead with service transformation during the summer continued to sustain core service delivery. At the end of 2020, the sector was stepping up with only 8% of landlords saying they were intending to deliver services as they had pre pandemic. A staggering 75% said they were engaged in transforming how they deliver many of their key services, with the balance reviewing only one or two areas of their operation.
Whilst latest figures show that arrears are now 19% higher than March 2020 we have found that there are no panaceas and that staying on top of arrears at a time when tenants’ incomes are falling requires detailed data and insight to target, regular contact and support, working with tenants and tenacity to make sure rent is paid. In some cases, landlords who have adopted this approach have improved their arrears position, whilst for others arrears levels have doubled. The pandemic arrears story is consistent with other key areas of performance and also how the sector responds to adversity - with early seismic spikes starting to come down and significant variations between landlords. Given the scale and complexity of the pandemic landscape, the use of data to drive evidence-based decisions and take appropriate action is driving resilience.
Connected and supported
Sickness levels have exacerbated operational pressures and our analysis has shown that only around half of increased cases are caused by COVID-19, with significant lost hours caused by stress and wellbeing related issues. At 5.6%, the sector average is not only 40% higher than usual but is also flattened by a reduction in cases of typical winter seasonal illness such as flu. In real terms at a time when the sector is grappling with backlogs, capacity is seriously stretched, with burn out after 12 months of heightened operational pressure a further risk. This is another area where early, intervention-based decisions and action to support teams has delivered results. Those organisations who introduced additional wellbeing and enhanced colleague communication and support have not only benefitted from lower sickness levels but have also in some cases seen increased employee satisfaction and productivity uplifts.
Earlier in 2020 we also saw a pattern across many landlords of increased customer sentiment and satisfaction. Our analysis suggests that there were several factors driving this - a real push towards strengthening customer insight, developing a much deeper understanding of residents, particularly those who may be vulnerable, and a channelling of the productivity gain from digitalisation towards increased engagement and providing additional services and support.
One year on and the sector has an opportunity now to redefine what’s possible as we emerge from the uncertainty of 2020. Any organisation using ‘back to the office’ or ‘returning to normal’ corporate narrative should step back and reconsider, as 12 months of the sector’s pandemic data and story has clearly signposted the most effective levers to pull. Housemark is ready to provide the on-time insight landlords need to be confident in the decisions they must make and the action they need to take. We have launched a new sector monthly pulse and quarterly forecast report, both available exclusively for members as part of an enhanced 2021 data offer.
Amanda Leonard, Associate Commercial Director
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