Unlocking Financial Efficiency Through Regular Window Maintenance: A Component Accounting Perspective

Introduction

Component accounting is a specialised area of accounting that applies to registered social housing providers or social landlords.

Component Accounting tracks individual capital components (kitchens, bathrooms, boilers, etc.), depreciating their installation cost over their individual lives and writing them off when they are replaced.

This article aims to explain on how a preventative maintenance approach can significantly enhance the financial benefits realised through component accounting.  Looking at the impact of extending the useful life of windows in high-rise properties and the impact of Asset Values.

What is Component Accounting?

Component accounting is a strategic approach to valuing properties based on their individual elements, such as windows, boilers, and roofs, each treated as a standalone asset. This method involves tracking the cost, depreciation, and replacement of these components over their respective lifespans. It’s about acknowledging that each part of a property contributes differently to its overall value and incurs unique costs over time.

Component Accounting helps housing associations to make more strategic decisions about where to allocate resources, when to schedule maintenance, and how to plan for replacements. By understanding the specific depreciation rates and condition of assets such as heating systems, roofs, and windows, asset managers can schedule proactive maintenance to prevent costly emergency repairs, enhance tenant living conditions, and extend the useful life of these components. This foresight in planning not only helps in budgeting for future expenses but also in securing the necessary funding without disrupting the financial stability of the housing association.

Maintaining higher asset values benefits social landlords significantly as it strengthens their financial standing and borrowing capacity. Higher property values can lead to increased equity, offering more leverage for securing loans or funding at more favorable terms. This financial flexibility is crucial for supporting ongoing operations, facilitating expansions, or investing in property improvements and community development projects.

In a broader sense, higher asset values contribute to the social landlord’s ability to fulfill their mission: providing quality housing and fostering vibrant, sustainable communities. This not only underscores the organization’s financial health but also its commitment to improving the lives of its tenants and the welfare of the wider community.

The Importance of Regular Window Maintenance on useful lifetimes.

Regular maintenance can significantly increase a window’s lifespan, realistically extending it from an expected 20 years to an impressive 30 years before necessitating replacement. This extension is not only a testament to the value of preventative care but also a strategic move that offers substantial cost savings over time.  This is a vital consideration for High-Rise properties where access costs significantly add to the cost of window replacement.

More than that, defective windows are a common culprit in the development of damp and mould on surrounding walls, exacerbating the need for frequent repainting and potentially incurring substantial costs for specialized damp and mould removal services.

By ensuring windows are regularly maintained, social landlords can avoid these cascading problems, thus preserving the structural integrity of their buildings and enhancing the living conditions for tenants.

Comparative Depreciation Analysis

Consider two scenarios over a 60-year period for a property’s windows, valued at and average of £6,000 per property. In the first scenario, without maintenance, windows last only 20 years, necessitating three replacements over 60 years at a total cost of £18,000. In contrast, regular maintenance extends their lifespan to 30 years, reducing replacements to two over the same period and lowering the total cost to £12,000.  Assuming an annual service visit cost of £100 per property this delivers a 16% saving of £3000 over the 60 year period.  The annual service visit is also likely to significantly reduce responsive window repairs to the block offering a further saving.

The Financial Benefits

Beyond the direct savings in replacement costs, regular window maintenance offers additional financial benefits. Firstly, extending the lifespan of windows reduces the frequency of capital outlays for new installations, easing cash flow pressures.

Secondly, well-maintained windows contribute to better energy efficiency, lowering utility costs and potentially increasing the property’s market value. Through component accounting, these benefits are not just theoretical but can be precisely quantified, providing a clear picture of the return on investment.

SAFEKEEP Strategy for High Rise Window Maintenance

Speak to Mila to  with High-Rise window repairs that you manage.  Mila are the experts for this kind of project.  We have over 30 years experience and access to the best window supply chain in the market.  Our engineers are fully training for working at height, harness working and protecting residents when carrying out repairs.  Our simple model is called SAFEKEEP.

Survey (S): Detailed Checks with Tailored Reporting

Our engineers conduct meticulous checks on your windows and doors.  Firstly for correct operation. Then for compliance with health and safety regulations.  Thirdly, signs of water and air ingress. We also consider any additional factors requested by our clients to furnish landlords with a detailed report. Not only does this report spotlight areas that need fixing. It also serves as a tangible audit trail, showcasing safety precautions undertaken. Finally, the report proposes potential enhancements for the windows.

Adjust (A): Preventing Small Issues from Becoming Major Ones

The emphasis here is on proactive care. Windows require continual small adjustments to windows and regular lubrication.  This prevents minor issues from spiraling into bigger, costlier problems. Guarding against more significant repairs and, worst case, complete window replacements.

Fix (F): Swift and Uncomplicated Solutions

Our approach to fixing is straightforward and effective. Once a problem is identified, our team ensures it’s repaired efficiently.  We prioritise the safety and functionality of the windows and doors to uphold the comfort and security of our residents.

Enhance (E): Advancing Beyond the Basic Functions

Enhancements go beyond mere fixes. It could involve elevating ventilation to combat issues like mould or damp. Or escalating the energy efficiency of windows. Or upgrading security features. In every enhancement action, the objective is to boost the existing functionality. Enhancements may also prolong the lifespan of your installations.

KEEP: Keep your Windows and Residents SAFE

By engaging in long-term contracts, landlords can spread repair costs over an extended period. They gain preferential access to Mila’s responsive repair services. The ‘KEEP’ phase protects your window and door investment.  It is the scheduled programme of future safety audits.  This provides a steadfast availability of a repairs service when it’s needed.  It’s how you KEEP your resident’s windows operational over the long-term with all safety measures functional.  It’s how you prevent small problems becoming large expensive ones.

Learn more about how SAFEKEEP can benefit your properties. Contact Mila today to request our High Level Window Maintenance Brochure

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