What are void properties costing you?

What are void properties costing you?

by 01 June, 2017 0

The life cycle of a void property impacts multiple departments within any housing provider as well as the end user, the tenant. When you think about the impact on time and resource of 1) The voids team, 2) The DLO or maintenance contractor, 3) The lettings team, 4) The finance team and 5) The financial inclusion team, then you begin to realise collectively your staff could be spending hours on the phone to energy providers for every single void property. Our services allow you to outsource a number of these tasks whilst reducing actual energy costs and ensuring your new tenants begin their tenancy more sustainably.

How many man hours are lost each year on hold to energy suppliers and what is the real cost of that time? If your organisation is responsible for energy costs during void periods, how much are you paying in standing charge? Who has the task of having to sort and pay all of those individual energy bills? How much does your organisation invest in debt and money advice, or into a financial inclusion team? How many energy advisors can you afford to support tenants?

The costs and impact of void properties and the management of utilities is probably more significant than you think. According to Total Jobs the average salary for a Housing Officer is now £28,362 that equates to £14.54 an hour based on a 37.5 hour contract. Even if it only took 30 minutes for each of the 5 aforementioned departments to contact the energy supplier and close accounts, clear debts, open new accounts, provide meter readings, pay outstanding balances and offer support and advice to new tenants, that would still be £36.35 per void. If the average void period in the UK is currently 25.7 days and a typical standing charge is 26p a day then a property with a Gas and Electricity supply would also accrue a cost of £13.36 whilst it was empty and that is before any actual energy is used for testing, or reparation works. So far then we are looking at £49.71 per void property, without any complications or additional energy costs. How many void properties do you have each year? The Inside Housing report suggests churn rates are as high as 10.1% in the north of England. Let’s imagine then that you run a modest Housing Association with 10,000 homes in the north of England, a conservative estimate would be that just the energy component of the managment of your void properties would be costing you £49,710 annually.

Even if you employ an energy company to help you manage the void process, do they help with every single property? Do they leave your staff to deal with evications and abandonments? Do they deal with other energy companies and clear down debts from them? Do they offer your tenants competitve tariffs, or do they have high cost Standard Variable Tariffs (SVT’s), you know the ones the major parties are campaigning to cap? Do your tenants get into debt and require the support of your financial inclusion team further down the line?

It is possible to quantify some of the direct costs of voids, but once we start considering energy costs to tenants over the longer term it becomes more difficult to anticipate the impact and costs. One thing we do know though, energy costs are increasing, even with a cap in place.

It is possible to reduce these costs, ensure tenants have access to cheaper tariffs and ensure your staff are not spending time on hold to, or dealing with energy suppliers. If you would like to find out more contact us at ask@energyangels.co.uk

 

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Leigh Fairbrother

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