It has become increasingly important for housing providers to maintain good information about the assets they hold in addition to that which they need for day-to-day operations or accounts. The principle purposes are:
Charging properties to lenders;
Valuations for loan security or balance sheet purposes;
Regulatory reports, including NROSH;
Active asset management, where properties may be considered for transfer tenanted or disposal out of sector;
Mapping information through geographical information systems to inform spatial strategies.
This article highlights the most commonly required information for any asset-related transaction and good practice for gathering, maintaining and using this data.
Why build an asset register?
In the past, there was little incentive for housing providers to maintain detailed records of static information about the profile of their properties, commonly known as an asset register. Increasing trading activity and more demanding due diligence on loan security means that it is essential that records are brought together and maintained to a high standard.
The business case for creating a robust asset register is that whenever a transaction takes place, the housing provider should be able to access the records quickly and efficiently. There will be reductions in the staff time required and, over time, there are potential savings in professional fees incurred on due diligence. There will also be a significant reduction in risk, such as when additional security is urgently required to comply with covenants. This has happened recently where housing providers with stand-alone hedging instruments have faced ‘margin calls’.
The introduction of scanning technologies and electronic data storage makes the practical arrangements easier than maintaining large paper files and relatively inexpensive. The main costs will be the staff time needed to assemble, validate and load the information. Once in place, most of the information changes infrequently so should be economical to keep up to date.
Content of asset registers
The core contents will be the information on title needed to answer preliminary enquiries every time there is a property transaction or a property is charged. There will be additional information required where schemes are less than 10 years old. The principle contents of a comprehensive asset register would include the following:
Title, title plan, and lease of land
As-built plans and pictures
Planning documents and building regulations consent & sign off
EPC and NHBC certificates
Tenancy agreements and leases to residents
Nominations and management agreements
Health & Safety documents
Contracts affecting the property
Managing an asset register system
It is unlikely that housing providers will store the components of an asset register in a single system. Basic property information is held in all the common housing management, asset management and finance systems. What is absolutely critical is that each property is assigned a Unique Property Reference Number (UPRN) that is used consistently in each database. The information in any asset register system can then be tied together.
Many housing providers’ IT systems generate their own UPRNs. While these are suitable for day-to-day operations, they will not be compatible with local authority and other geographical information systems. The national standard that allows different datasets to be tied together is the National Land and Property Gazetteer (NLPG). As a minimum, address data should be kept in a format that conforms to BS 7666 (2006) and is therefore compatible with Post Office systems.
Implementation and maintenance
Traditional housing providers that have built up their portfolios over many years often lack historic records, with some needing to acquire datasets from the Land Registry to validate and update their records. There is then a process of archiving to pull historic information from paper files but even then there will frequently be gaps that can only be filled by making enquiries of public authorities or commissioning surveys. The good news is that once this work has been done and the records saved electronically, there will be little need for further updates and paper records can then be archived or shredded.
Asset registers are essential for any housing provider that actively manages its assets. Savills will be providing guidance on asset registers as part of the National Housing Federation’s ‘Guide to Asset Management’ to be published later this year.
Mervyn Jones is director of portfolio management within Savills’ housing consultancy.