Rent Consultation for 2012-13
It is proposed to increase our rents by 6.4% from
1 April 2012- in line with the terms of the Rent
Policy of inflation (the Retail Price Index at October 2011)
plus 1%.
Member's rent will also be increased by an additional small amount each month to cover the shortfall in rent from converting the Co-operative’s market rent properties to social rented properties – which was approved by our Committee of Management with effect from 1 April 2010.
Background
Our Rent Policy outlines how we calculate the rent to be charged and our approach to rent increases. The Co-operative sets the rents for its properties in accordance with the size and type of property. Rent increases are always kept to a minimum but the Co-operative needs to cover its costs.
Affordability
During 2011 a working group, to review the Rent Policy, met regularly to consider a new affordability test, in line with the recommendation of the Scottish Federation of Housing Association (SFHA) Rent Setting Guidance booklet.
The criteria of the affordability test suggests that the lowest allocation criteria is met for a property - that is one member of the household is working 35 hours on minimum wage. Overall this gives an affordable level of 96.3% - i.e. the levels of rents charged by the Co-operative are affordable to our members.
Interest on Borrowings
We have commenced work on our major development at Donside which is a larger and more complex project than any undertaken to date. The Co-operative is investing in your future and a rental income stream will come from this investment – this is what the Co-operative is all about.
The Co-operative needs to finance this substantial development and has drawn down £5m of funds from the European Investment Bank in September. Lloyds Bank has reviewed the funding that is currently in place with the Co-operative and we have agreed a re-pricing to be put in place from 1 April. Additional borrowing, to fund the completion of the development at Donside, will require to be drawn down next year.
What this all means is that loan interest repayments are estimated to increase by some 35% next year and part of these increased payments will have to be funded from increased rental income.
Maintenance
We have done our best to improve our maintenance service (retaining the high standard that you have come to expect) but keeping costs within our budget. Almost 96% of the Co-operative’s current stock meets the Scottish Housing Quality Standard requirements and all are expected to meet the requirements by 2015. Tenants First is addressing energy consumption with an insulation programme for existing properties and a quest for highly insulated low energy houses in new build.
Comparability
The Co-operative has compared the weekly rents of its properties with similar sized properties of other social housing providers and we are pleased to report that our rents compare very favourably with those of other local housing associations. A table of comparatives for the current year (2011/12) is shown below.
Tables for our properties in Angus and Glasgow have not been included because rents at these properties are slowly being brought into line with the Co-op’s Rent Policy and any comparison would be misleading.
TABLE 1 – Aberdeen City
|
1apt |
2apt |
3apt |
4apt |
5+apt |
Castlehill HA |
£46.89 |
£59.44 |
£67.97 |
£75.87 |
£93.15 |
Grampian HA |
£47.23 |
£56.60 |
£65.32 |
£73.47 |
£88.35 |
Langstane HA |
£53.78 |
£62.11 |
£70.35 |
£79.15 |
£98.32 |
Tenants First |
0 |
£60.65 |
£73.75 |
£83.21 |
£93.15 |
Table 2 - Aberdeenshire
|
1apt |
2apt |
3apt |
4apt |
5+apt |
Aberdeenshire HP |
0 |
£62.88 |
£72.79 |
£84.49 |
£92.97 |
Castlehill HA |
0 |
£49.30 |
£62.03 |
£73.40 |
£80.55 |
Grampian HA |
0 |
£55.62 |
£68.79 |
£77.28 |
£85.17 |
Langstane HA |
£46.99 |
£55.83 |
£64.79 |
£72.90 |
£79.33 |
Kincardine Co-op |
0 |
£51.82 |
£62.22 |
£74.08 |
£78.71 |
Tenants First |
0 |
£53.60 |
£61.86 |
£74.83 |
£81.36 |
