|5 minute read time
Talking about costs
Written by Lisa Graveling, head of marketing
What does the cost-of-living crisis mean for Home Group? (and why does it even matter?)
It might feel like the cost of living crisis is all we hear about at the moment, and we know it’s something many people are very worried about. Some customers have asked – what does this all mean for Home Group?
We’ve asked our Chief Financial Officer, Helen, to share her thoughts on the impact on us as an organisation.
“The current economic situation is affecting everyone, including organisations like ours. Most businesses, small and large, are affected in one way or another but there’s a few things that make a bigger difference to us:
- Firstly, and it won’t come as a surprise, energy bills. Energy costs have gone up. We’re doing our very best to negotiate these, but sometimes these price hikes are unavoidable.
- Costs for things like cleaning and gardening are going up significantly. This increases the cost of service charges for some of our customers.
- We’ve seen an increase in costs for some repair supplies – with some hitting a 40 year high. In some cases this means it costs more for us to carry out repairs for customers. Just one example of this is for glass. There are huge pressures for glass manufacturers because of energy bills. This means some manufacturers are producing less, meaning demand and costs are high.
- Increased pressure on our supply chain and material shortages have made it more difficult to source some materials we need to complete repairs. This has meant that some repairs are taking longer than we would like at the moment.
- We borrow money to build homes (a bit like a mortgage). Most businesses have variable debt (not fixed prices). Interest rate increases mean that it costs us more to borrow the money we use to build the homes we need to. This affects the cost to build new homes, and also the debt we already have on our existing properties for rent.
- Organisations like ours are being affected by a labour shortage. The health and social care crisis means we are using more temporary staff -this makes it more expensive to deliver services. In addition. many of our suppliers and contractors rely on European labour and Brexit, combined with the pandemic has led to understaffing and more competition when recruiting.
We’re really aware that every pound we spend is a pound of our customers' money – your rent. It is this rent that allows us to:
- build more homes,
- provide repairs and maintenance to the homes we have,
- and to pay for Home Group colleagues to support customers in a number of ways.
It is costing us more to deliver this promise at the moment because of some of the things I've mentioned above. We will keep talking to customers about what is important to them as we move through this cost-of-living crisis so that we can prioritise the right things. If you would like to share your views, and help us improve our services, please get involved.