We’ve developed a way of understanding how different properties perform called the Asset Return Model (ARM).
ARM looks at whether the rent we get for a property covers the running costs. It works out how much it will cost to look after the property over thirty years including:
• planned upgrades such as new kitchen or bathrooms, and
• the cost of housing management and customer service.
The model calculates how much rent we will collect over the same period and allows for any times the house is left empty when tenants change over. ARM calculates whether the rent we get for the property will cover the running costs.
If properties aren’t performing well, we have several choices about how to put things right. We can make changes to the way we let homes, perhaps by restricting them to a particular age group. We might change the layout, for example, by converting flats back into family homes depending on demand. In some cases, the most cost-effective solution can be to sell the property when it becomes empty. We can then invest the proceeds in improving existing homes or building new ones that better meet our customers’ needs.
ARM is helping us to make the most of our property assets by giving us important data we can use to make investment decisions which will benefit the business and our customers.