Tenant Satisfaction Measures
The new era of Tenant Satisfaction Measures
09-04-2024
The landscape has changed for housing associations (HAs) in many ways. The social housing sector has been the subject of serious scrutiny in recent times, with the media exposing troubling examples of poor housing up and down the country.
The government sought to step in by proposing a set of Tenant Satisfaction Measures (TSMs) in its 2020 Social Housing White Paper. The 22 TSMs proposed would later come into force under the Social Housing (Regulation) Act in July 2023. HAs with more than 1,000 units began collecting TSM data in April 2023 and the first year of results will be submitted to the Regulator of Social Housing (RSH) by 30 June 2024.
The results will be published by the RSH in Autumn 2024 and will aim to make landlords’ performance more visible to tenants, as well as helping tenants hold their landlords to account.
In addition to surveying residents, the RSH announced in December 2023 that social landlords will also have to give a breakdown of the methods used to survey tenants, including email, phone, or in-person questionnaires.
The Housing Finance Corporation (THFC) seeks to understand what HAs are doing to prepare for the new regime and how TSM data is likely to be used by various stakeholders.
How HAs are preparing
Collecting data on tenant satisfaction is nothing new for housing associations. In the past, it has been commonplace for social landlords to promote “customer satisfaction” rates within their annual reports. But the onset of the TSM regime has formalised and expanded this process, which requires a greater level of attention and resource from HAs.
Fayann Simpson is Chair of L&Q’s Resident Services Board and a board member of Sustainability for Housing (SfH). Her roles mean she has a strong overview of resident-landlord dynamics within her organisation and the sector more widely and she suggests that TSMs represent an “opportunity for tenants to understand that they feel heard”.
“The three words that will decide if TSMs are effective are: communication, collaboration, and feedback,” Fayann notes.
She is keen to underscore the importance of communicating to residents how TSMs will be used to drive improvement. She also highlights the need for HAs to collaborate with their peers and share best practices on, for instance, the best way to collect data.
Fayann’s final point is on feedback. She says HAs will have some idea about what the results are likely to show. But just as important as publishing the data is how HAs respond to feedback from residents and other stakeholders.
Fayann notes that the 22 TSM criteria cut across all departments within HAs and therefore represent a whole organisation effort.
Bromford, which owns and manages 46,000 homes across England, is alive to the challenges that TSMs will bring and has been preparing accordingly. Paul Coates, Chief Customer Officer at Bromford, explains that the HA has been able to hit the ground running on TSMs through its existing “Thrive Survey” which offers real time data on resident satisfaction.
“We’ve been capturing tenant satisfaction measures since the start of the year, using Qualtrics as our insight tool to get that feedback from customers,” he says. Qualtrics is an experience management software that allows Bromford to gather customer feedback in one place.
The system allows Bromford to react to problematic situations quickly. Paul explains: “If a customer gives us feedback that might not be what we expect, it triggers an activity to the team that is responsible for that piece of work, allowing them to close the loop and drive improvement.”
He adds: “We don’t want this to be a static thing that gets reported at the end of the year because then it feels like we’ve not listened to feedback.”
The funder view
The new TSM regime will provide a window into an important aspect of HAs’ performance and could work to strengthen communication between residents and landlords. However, another key stakeholder group that will be watching developments closely is funders.
David Stokes, Credit and Risk Director at THFC, says that the measures will help with THFC’s “whole business” analysis when it comes to considering lending to new borrowers.
He says: “As a lender THFC is concerned with all aspects of the risk profile of borrowers, and tenant satisfaction can be a leading indicator of how well a borrower is being managed and governed.
“Tenant satisfaction with the quality of their home, and that ‘Decent Homes Standards’ are being met, is important to THFC as a socially responsible lender, but high satisfaction can also be indicative of the quality of the security that the borrower has provided for its loans.”
David believes that TSMs will be useful as part of the information gathering that is undertaken when assessing what future stock investment needs of the borrower are.
However, HAs are faced with something of a catch-22 when it comes to improving on their TSM results. TSMs cover five key themes: repairs, building safety, effective complaint handling, respectful and helpful tenant engagement, and responsible neighbourhood management. All of these operational aspects require substantial investment.
But investing heavily in fixing these problems may weaken a landlord’s finances in the eyes of credit rating agencies, therefore detracting from their ability to raise finance. This paradox came into focus recently with S&P highlighted an HA’s “aggressive strategy to maintain large investments in existing stock”.
This is likely to become more of an issue in the coming years as social landlords look to move the needle on net zero through costly retrofitting programmes.
For some time now, the finance community has been looking for investments that align with their Environmental, Social and Governance (ESG) objectives. The social housing sector has sought to capitalise on ESG-linked finance in recent years and has done so successfully due to its strong fundamentals.
According to Chis Evans, Director at Newbridge Advisors, TSMs have the potential to further strengthen the sector’s credentials.
He says: “I really do feel that TSMs will enhance the ‘G’ disclosure when considering ESG. Many organisations are seeking to identify ways of incorporating the voice of tenants into their ESG strategies and TSMs should provide clear guidance as to where areas of priorities are.”
THFC also identifies the synergies between TSMs and the burgeoning ESG agenda, adding: “A well invested, well maintained portfolio of housing should have a lower carbon footprint than a poorly invested one, and this along with the wellbeing of a borrower’s tenants, of which tenants’ satisfaction with their housing is an important feature, all have an important role to play in the ESG agenda.”
Where do we go from here?
The sector is very much in the foothills of the journey to rebalancing the tenant-landlord relationship and the first round of TSMs will mark an important milestone. But collecting the data is just the beginning and landlords will have to reflect on how they can use TSMs to reflect meaningful progress.
Fayann urges sector colleagues to learn from the first round of results and approach them with an open mind.
“I don’t think the information that comes out should be seen as a kind of ‘gold standard’. I think it should be something that we learn from because when the time comes, the data may reveal things we expected and some that we did not expect,” she says.
“I think we have got to be geared up for the opportunity for feedback, not just be focused on getting the information – it’s about what comes next,” she adds.
Imran Mubeen, Director of Treasury at Bromford, expects that his organisation will look to communicate its TSM results in a regular and transparent way.
He says: “Our customers must be at the centre of everything we do, including our new funding and treasury activity. We welcome greater focus from our funders and broader stakeholders on the customer experience at Bromford.
“Historically, our trading updates have been very much focused on financial performance, but moving forwards, our trading update will have a dedicated section on customer experience – including a high level dashboard with TSM disclosure from March 2024.
“We will no longer communicate our financial performance without also referencing how we are delivering to customers – and we will do this through the data established in the TSMs, but also in bringing customers into our meetings with funders and investors so they can share first hand their experience of living in a Bromford home.”
Imran has been advocating more generally for more attention to be given to resident voice. At the start of the year, he announced that Bromford would no longer be accepting credit ratings from agencies unless they met with Bromford customers as part of an annual review process.
A lot of the question marks on TSMs surround HAs and how they are likely to deal with the added responsibility, but there are also questions about how TSMs will fit into the overall governance of the sector.
Chris says: “How the Regulator of Social Housing (RSH) incorporates TSMs into its already established governance assessment is something we will monitor closely.”