The Connected Housing Association? Social housing and the internet of things

01 December 2016

The ‘Connected Home’ and Internet of Things market is estimated to be worth £4.5 billion in the UK by 2020 and some $150 billion worldwide.  While industries such as utilities, telecoms and hi-tech manufacturers are all entering this new market from different angles, are housing associations ready to embrace the Connected Home?

Smart technologies could help tenants to save on energy costs, spot issues with their water supply and protect their belongings. Similarly associations could monitor the condition of their assets, potentially catching maintenance issues and preventing them from turning into inconvenient or dangerous incidents.

However, despite the hype, consumer take-up is still relatively low. In February 2016, PwC published a public survey which showed that less than 10% of people have smart central heating and that 72% say they are highly unlikely to introduce smart home technology in the next 2-5 years.

We recently hosted a roundtable of representatives from UK housing associations and the subject of Connected Homes was very illuminating. Although it’s fair to say the interest is there, the conversation around the table showed the path forward is fraught with difficulty.

The first assumption that many technology firms make is that the majority of properties are now connected to the internet as is required by smart technology.  However, digital inclusion in social housing is a known problem and, as smartphone connectivity offers greater bandwidth at decreasing cost, fixed line connectivity is becoming more discretionary. Tenants may have the control device, but there’s often nothing at home for the smart devices to talk to.

The second issue discussed was the volume of data from smart devices and the issues around its use. With new regulations coming into force each year, the definition of data and how it’s protected, reported, monetised and even forgotten are getting stricter, with associated onerous responsibilities and stiff penalties for data owners and users. The housing associations around the table said they were not set up to deal with the deluge of operational data that would result from thousands of connected homes, nor were they ready yet to securely hold the sensitive data collected.

The final challenge was at the heart of an association’s purpose: should industry standard devices be provided for those who would benefit most from lower bills (although no such interoperability standards exist today), should it be “bring your own”? (but then who supports this) or should it be aimed at the private sale or rental market to attract premium prices and in that way generate more income for the associations to then channel into their social purpose? There was no easy answer here.

Against a backdrop of the day to day pressures that housing associations face, answering these questions around the connected home are too easily consigned to a future date. However, with the technology maturing at an exponential rate and practical examples of its value appearing to consumers and landlords alike, in our view conversations around potential new services, new operating models, secure data usage and technology choices need to be held now.

 

Kevin Jarrett | Partner
Email  | +44 (0)7764 958 782

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