A recent survey has found that the housing providers operating in areas with higher COVID-19 restrictions are more likely to experience an increase in arrears.
HouseMark’s latest COVID-19 impact data shows that landlords previously operating in higher tiers experience on average arrears levels 40% higher than their counterparts – as 99% of England moves into the toughest two tiers of the lockdown system.
The survey finds that “significant” sector-wide operational pressures remain, with void levels still 36% higher than in December 2019 and non-emergency repairs demand surpassing performance.
Housemark data found that there was a period of relative stability from June to October, with arrears falling slightly to 3.48%.
Yet the data also showed that arrears levels varied significantly depending on local conditions.
Landlords operating in areas with tighter restrictions reported levels 40% higher on average than their counterparts across the rest of the UK (3.07% vs 4.28%).
The number of lettings in the sector increased by 22%, representing an additional 6,200 properties.
However, vacancy rates are still 36% higher than they were during 2019/20, equating to around 11,500 empty homes in the UK.
Housemark estimates that over the first half of the financial year, the sector has lost £31.5m in income due to the drop in lettings activity because of COVID.
Since August, Housemark says repairs have increased by over 30%, estimating that the sector tackled up to 240,000 non-emergency repairs during the period – well above typical demand levels.
Completion rates for emergency and non-emergency jobs declined slightly in October from 84% to 83%, increasing the pressure on repairs backlogs.
Housemark says landlords that have been providing additional health and wellbeing support for staff reported sickness levels 22% lower than their counterparts.
Sickness absence is up by 20% from expected levels, and Housemark says that less than half the increase can be attributed to COVID, either directly or through self-isolation.
Talking about the latest analysis, HouseMark chief executive Laurice Ponting said: “Significant challenges remain for income lines impacted by arrears, empty homes and delays to development programmes.
“Coupled with the increase in reported repairs alongside the potential for further service disruption and increased operating costs, landlords will need to move quickly to understand the impact on their business and take mitigating action.
“With some landlords set to be hit significantly harder than others, understanding performance in relation to peers will be crucial.
“The ongoing crisis response is adding to an already complex agenda being managed by Boards and executives – we will continue to help our members and the UK sector understand the wider impact, as well as contextualise their own performance, in anything but ‘normal’ times.”
HouseMark is one of the UK housing sector’s largest membership organisations, aiming to provide solutions and opportunities to drive performance improvements.
- The executive summary of the report is available to view at HouseMark’s website.
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