Optimising Social Housing Investment Returns Through Tenant Experience and Satisfaction

Analysis of Tenant Satisfaction Measures (TSMs)

The Regulator of Social Housing's first comprehensive analysis of Tenant Satisfaction Measures in November 2024 provides crucial insights for investors seeking to optimise returns through tenant-focused strategies. The TSM framework comprises 22 measures-12 perception-based and 10 management information metrics spanning overall satisfaction, repairs, building safety, engagement and neighbourhood management.

The data collection methodology significantly impacts results. 77.7% of landlords used telephone surveys, while only 1% conducted face-to-face interviews, despite the latter consistently yielding more favourable outcomes. This methodological variance creates important considerations when comparing performance across providers.

Key Satisfaction Drivers

Statistical analysis conclusively identifies repairs and home maintenance as the most significant drivers of overall tenant satisfaction. This provides clear investment intelligence on where resources should be prioritised for maximum impact on tenant retention and property condition.

Approximately 70% of social housing tenants report satisfaction with their landlord's service, home safety, maintenance, and treatment with respect. However, complaint handling emerges as a critical weakness, with only one-third of tenants satisfied with their landlord's approach, representing a significant regulatory risk area.

Demographic Insights

Tenant age emerges as the most influential demographic factor, with over-65s reporting significantly higher satisfaction (82%) compared to under-35s (62%). This age-related satisfaction pattern appears consistently across most metrics, suggesting targeted approaches may be necessary for younger tenant cohorts.

The shared ownership segment raises a challenge, with only 49.5% reporting satisfaction compared to 70% of social tenants. Shared owners cite rent/service charges (38%), repairs (33%), and customer service (26%) as primary dissatisfaction drivers, critical considerations for investment strategy decisions in this growing segment.

Correlation between Tenant Satisfaction Metrics and Financial Performance Indicators

Recent data reveals potent correlations between tenant satisfaction and financial outcomes across the social housing sector. The geographical dimension is particularly interesting as major urban areas are experiencing significant rent arrears increases while rural regions show improved performance:

• Manchester: 27.6% increase in arrears

• London: 19.5% increase in arrears

• Scotland: 20.3% decrease in arrears

• Rural UK: Notable improvements in arrears management

This urban-rural divide is mirrored in satisfaction scores, with smaller rural housing associations achieving higher median satisfaction than large urban local authorities. Housemark attributes urban challenges to "higher staff attrition and the complexities of managing densely populated areas".

The five-year decline in overall tenant satisfaction, from 85.1% in 2018/19 to 75% in 2022/23, coincides with increasing operational pressures and extended void periods. This drop could indicate a significant financial risk factor for investors.

Repair Services: The Critical Financial Driver

The Regulator's analysis conclusively identifies repairs and maintenance as the most significant drivers of tenant satisfaction:

• 64% of dissatisfied tenants cite repairs issues as their primary concern

• Repairs satisfaction scores average 15 percentage points lower in TSMs compared to transaction-specific surveys

• "Undertaking repairs are a key part of a property being well maintained and those that take a long time to resolve or are outstanding are a main source of dissatisfaction"

Notably, landlords investing in data-driven improvement strategies show measurable results, with 44% of providers reporting improved tenant satisfaction between 2023-2024.

Digital Platforms Improving Tenant Engagement and Satisfaction

The social housing sector is increasingly looking to digital solutions to improve the tenant experience while simultaneously improving operational efficiency and investment returns.

Advanced Maintenance Solutions

AI-powered predictive maintenance could be the advancement in property management to fix some of these issues in tenant satisfaction. Mobysoft's RepairSense platform is a great example of this approach, using artificial intelligence to foresee maintenance issues before they escalate into tenant complaints. By analysing historical repair records and current property data, the system identifies patterns that indicate potential problems, enabling proactive intervention.

The RepairSense Damp & Mould Module specifically targets one of the most serious tenant satisfaction issues in social housing. Launched in March 2025, this solution:

• Identifies properties prone to damp and mould before tenants report issues

• Prioritises repairs based on severity to prevent minor cases escalating

• Reduces avoidable repair requests, freeing resources for urgent cases

With Awaab's Law enforcement approaching in October 2025, this technology addresses both regulatory compliance and tenant wellbeing.

Digital Engagement Tools

Beyond maintenance, digital platforms are transforming how housing providers engage with tenants. TPAS Scotland's work with ng homes demonstrates how digital survey tools can gather actionable insights about tenant preferences, particularly valuable during the post-pandemic transition.

Map-based engagement platforms like PlaceChangers enable tenants to provide location-specific feedback on estate improvements, with interactive visualisations bringing proposed projects to life. These platforms create shared feedback environments where tenants can view neighbours' comments, fostering community dialogue while providing housing associations with demographically filtered insights.

The establishment of digital consultation lists, as seen with ng homes' 60-participant engagement group, shows how technology facilitates ongoing resident dialogue without requiring physical meetings.

Support Services that Enhance Tenant Outcomes and Reduce Turnover

Working tenant support services are increasingly recognised as critical drivers that impact both tenant satisfaction and investment performance in social housing.

Tenant Participation Frameworks

External expertise in tenant engagement delivers measurable benefits. The partnership between ng homes and TPAS Scotland exemplifies this approach, resulting in a comprehensive overhaul of participation strategy and the establishment of a Resident Improvement Group with formal consultation processes. This structured approach creates sustainable engagement rather than sporadic consultation.

Creating formal structures with clear governance-including scrutiny groups with their own Code of Conduct and Terms of Reference-provides tenants with genuine influence over housing services. This shift from tokenistic consultation to meaningful participation directly correlates with reduced complaints and higher satisfaction.

Demographic-Specific Supportl

The ageing population presents both challenges and opportunities for social housing providers. With projections indicating 29% of England's population will be aged 60+ by 2035, adapted housing with appropriate support services becomes increasingly important. Specialist supported housing for older people consistently demonstrates higher satisfaction levels, with supported housing specialists reporting a median overall satisfaction of 77.5% compared to the sector average of 70%.

Regional variations in satisfaction correlate strongly with demographic profiles, with landlords operating predominantly in the Midlands and North reporting significantly higher median satisfaction (74.6% and 74.3% respectively) compared to London (59.7%). This reflects both demographic differences and the effectiveness of regionally-tailored support services.

Design Considerations for Tenant-Centred Housing Developments

Evidence-based design elements significantly impact both tenant satisfaction and investment returns in social housing. The Derwenthorpe development is a good example of this approach, achieving 91% resident satisfaction, comparable to owner-occupier levels and substantially exceeding typical social housing satisfaction rates. Residents specifically valued space, light, general appearance and internal layout as key satisfaction drivers.

The Lifetime Homes standard provides a comprehensive framework for creating accessible, adaptable housing that supports tenant satisfaction across demographic groups. These design features have proven particularly valuable for households with disabled members, where accessible bathrooms and wide hallways "had made a significant impact on their lives." The Design Council emphasises that this person-centred approach ensures "residents and communities will be engaged throughout the planning, construction and management stages."

Key design elements that enhance tenant satisfaction:

• Accessible entrances with level thresholds

• Wider hallways and doorways that accommodate mobility aids

• Reinforced walls and ceilings for future adaptation

• Dual-purpose features like large windows (energy efficiency and natural light)

• Adaptable room layouts supporting changing household needs

• Appropriate ventilation systems preventing damp and mould

• Thermal comfort considerations preventing summer overheating

• Communal spaces encouraging community interaction

Technical performance considerations are equally important, particularly in energy-efficient designs. Research on passive housing demonstrates that monitoring indoor temperature, CO2 concentration, and humidity levels is essential for maintaining tenant comfort. Overheating during summer months represents a particular challenge in top-floor apartments, requiring careful ventilation optimisation that balances energy efficiency with tenant wellbeing.

Case Studies Showing Financial Outperformance from Tenant-Focused Housing Providers

The Derwenthorpe development exemplifies how tenant-centred approaches translate into financial performance. With 91% resident satisfaction, significantly exceeding typical social housing rates, this Joseph Rowntree Housing Trust project demonstrates how thoughtful design and community integration reduce turnover and maintenance costs. Residents particularly valued the integration of green space with housing and the provision of a community hub, both contributing to higher retention rates.

Ng homes' proactive engagement strategy in Glasgow illustrates how structured tenant participation frameworks deliver operational efficiencies. Despite challenging economic conditions, their 2024-2027 business plan shows covenant compliance and viability while delivering a £38 million component replacement programme over five years. This demonstrates how effective tenant engagement can support substantial investment programmes even during economic pressure.

The rural-urban performance divide shows evidence for tenant-focused approaches. Rural providers consistently demonstrate more stable housing management conditions and effective income recovery practices, with rural regions showing improved arrears performance while major urban areas experienced significant increases.

Recent sector-wide financial data reveals emerging resilience despite ongoing pressures. Average operating margins for social housing providers rose from 18.5% in 2022-23 to 19.3% in 2023-24, despite record-high costs per unit exceeding £5,000 (up 11% year-on-year). This improvement follows concerted efforts to manage expenditure while maintaining substantial investment in existing housing stock-with providers spending a record £8.8 billion on repairs and maintenance in 2023-24, 13% more than the previous year and 55% above pre-pandemic levels.

Additional Research Considerations

The social housing sector faces significant challenges in accurately measuring and interpreting tenant satisfaction data, with important implications for investment decision-making.

Recent data reveals a concerning trend in complaint volumes, with Westminster Council reporting a 32.6% increase in housing complaints in 2023-24 compared to the previous year. This mirrors sector-wide patterns, with the Housing Ombudsman Service reporting a 69% increase in determined complaints in Q1 2023/24.

The reliability of tenant satisfaction methodologies is also a significant consideration for investors:

• Survey method significantly impacts results:

  • Telephone surveys (used by 65% of landlords) yield average satisfaction of 70%

  • Internet surveys produce significantly lower scores at 58%

  • Face-to-face interviews generate the highest satisfaction at 75%

  • The Regulator considers survey methodology "fundamental context" when assessing landlord performance

• Seasonal complaint patterns emerge from the data:

  • Sharp increases in October/November coincide with communal heating system activation

  • Higher volumes during winter months correlate with colder temperatures and increased rainfall

  • Complaint awareness campaigns significantly impact reporting rates

• Complaint distribution reveals priority areas:

  • 51% concern responsive repairs and property conditions

  • 24% relate to housing and neighbourhood issues

  • 17% involve health and safety, major works, or communal systems

Commercial property research provides valuable insights for social housing, with tenant satisfaction demonstrating measurable financial impacts: a 10% improvement in commercial tenant satisfaction correlates with 0.17% higher gross rent growth, 0.59% higher effective rent growth, and 2.43% lower vacancy rate growth.

The strongest correlations between tenant satisfaction and financial performance appear in maintenance costs, void periods, and regulatory compliance, all with quantifiable financial implications. While the evidence strongly suggests tenant satisfaction directly impacts investment returns, further longitudinal research tracking satisfaction improvements against financial metrics over time would strengthen the business case for tenant-focused investment strategies.

For more insights like these, take a look at our blog where our social housing investment experts discuss opportunities and challenges for investors. Or browse our social housing investment guide if you’re thinking of taking the next step.