Disposals and difficult decisions
Why does Connexus sell homes and remove them from its housing stock? Could these homes be re-let? Here’s a closer look at the organisation’s housing disposal strategy.
It’s no secret that the UK is currently in the grip of a widespread housing shortage, with housebuilding failing to keep up with population growth in almost half of local authorities. More affordable housing is desperately needed, and, as a community-focused rural housing group, Connexus’ focus is on providing high-quality affordable housing to the counties of Herefordshire and Shropshire.
So, with the housing crisis showing no signs of slowing, and a worsening economic backdrop putting pressure on affordable housing waiting lists, why does Connexus dispose of a small number of homes annually?
As part of managing over 10,500 homes, Connexus has a disposal strategy that helps decide which homes need to be disposed of (usually by sale). Four key factors make up the disposal strategy:
Poor value-for-money
Rental properties that have proven hard to let often perform poorly financially, with the cost of maintenance higher than any rental income. This is often due to changing housing demands, Which vary across our different communities.
Connexus is a not-for-profit organisation, meaning that all income from rents, sales and any other income streams is reinvested directly in providing housing and services to customers. Value-for-money is always a priority for the business, as every pound saved can be better spent on providing an improved service.
Housing type
Connexus works with local authorities to make sure it responds to local housing needs, delivering the right mix of affordable homes to suit each community. The demographics of each community – whether there are more families or older residents, for example – affect this housing demand.
Properties will be considered for disposal if they no longer meet the local housing need. The money from the sale can be used to provide homes that communities really need or go into refurbishing other more viable homes that Connexus owns.
The construction of older properties is also considered when looking at housing type, with some older properties no longer meeting the standards expected from a Connexus home. The 41 prefabricated bungalows that lined Beattie Avenue, Hereford were considered as part of this strategy, with their construction leading to properties that were not energy-efficient or a high enough standard for residents. This time the decision was taken not to dispose of the properties, but to redevelop the area, with 31 new, high-quality homes being delivered in the coming year.
Challenging location
Poor financial performance is often simply down to geographical location, with older housing stock left stranded in an area with low demand for that type of property, for example. Disposing of these properties allows resources to be redirected to communities with a higher demand for housing. Sometimes a property is not near other Connexus homes, meaning increased costs for repairs and maintenance teams.
Void properties
High-cost or potentially high-value properties that become void, with no tenant, are assessed by the Asset Strategy Team and considered for disposal. The value of the property is considered alongside the factors discussed previously: primarily housing type and need. A decision is then taken whether to retain and re-let the property, or sell the property and reinvest in more affordable housing.
Maximising our services
Disposing of properties previously used for affordable rent can understandably cause concern in local communities. Connexus understands that this can cause uncertainty about the long-term economic future of an area and housing opportunities. The disposal strategy carefully considers the impact that disposing of properties will have on communities and allows the organisation to maximise the number of homes provided across Shropshire and Herefordshire.