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State of the Sector Analysis FY20/21

Presenting the definitive headline financial results from the Vantage Global Accounts Plus analysis

Social Housing Lettings

Social Housing Lettings made up 73% of the total turnover and is broken down as follows:

TURNOVER BY SEGMENT: CORE SOCIAL HOUSING

Void Losses

In FY20/21, £214.6M was lost due to properties being empty compared to £164.8M in FY19/20. This equates to £86.27 per unit, an increase in relation to FY19/20 which was £66.85 per unit.

For FY20/21 the loss equates to approximately 44,295 empty homes for an entire year. This could also be illustrated as 2,303,316 homes empty for one week per year at an average rent of £93.18 per week, £214.6M worth of lost rent.

Overall this equates to a 30.2% increase in void losses set against an increase in stock of 0.9%.

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“This report provides in-depth insight for the executive team into the sectors performance based on geography and size. Last year, we built upon this by commissioning Vantage to produce a tailored financial report for us including all the VfM sector metrics and then presented to our Board as part of our strategic away day. This helped us understand our position and identify our targets as part of our VfM strategy.”

Mona Shah, Executive Director of Finance & Business Services, Grand Union Housing Group

Operating Margin

We have analysed overall operating margin for FY20/21 and compared to FY19/20. our analysis shows the overall operating margin was £5.19BN for FY20/21, a 1.3% increase on FY19/20.

Social Housing Lettings Operating Margin

Operating margin (SHL) demonstrates the profitability of an organisation’s social housing function. Overall, the margin has remained relatively static compared with FY19/20.

The South East has yet again retained the title of the highest SHL operating margin region at 36.0% with the Yorkshire & The Humber and Greater London having the lowest margin this year with 21.3%.

Operating Costs

We have analysed operating costs for FY20/21 and compared to FY19/20. our analysis covers management costs, repairs and maintenance.

Management costs increased from £2.46BN to £2.50BN in FY20/21, an increase of 1.6%. A major proportion of management costs is employment costs. Employment costs increased by 4.5% between FY19/20 and FY20/21 from £4.21BN to £4.40BN.

The number of employees increased by 2.4% from 112,827 to 115,503.

Repairs and Maintenance Costs

Overall Repairs and Maintenance Costs (including capitalised costs) were £4.63BN in FY20/21 compared to £4.87BN in FY19/20, a 5.0% decrease. Capitalised components spend was £1.32BN in FY20/21 compared to £1.64BN in FY19/20, a 19.5% decrease.

The decrease primarily reflects the issues in programme delivery resulting from Covid-19 lockdowns. This is expected to bounce back in FY21/22 unless further lockdowns are imposed or the labour supply market is severely constrained.

Financial Health & Viability

Overall, total arrears for rent and service charges increased by £7.3M in the year. This now means that the arrears as a % of turnover went from 4.4% to 4.3%, a small decrease.

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“The State of the Sector report is a really valuable resource. We commissioned Vantage to help us with our VFM reporting and peer analysis. Gaining access to data is always problematic and time consuming but Vantage were able to turn this around in a matter of days. They produced an intelligent tailored VFM report and valuable insight into our performance which prompted many discussions on sector best practice. The analysis work has shown us that our performance levels are really strong, and we are on the right track to meet our corporate plan.”

Sam Morgan, Finance Director Rooftop Housing Group