Rent Consultaion AHP January 2015
RENT & SERVICE CHARGE CONSULTATION – 2015/16
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Aberdeenshire Housing Partnership (AHP) has each January sought the views of tenants on the proposed rents and service charges for each new financial year.
Now that Moray and Aberdeenshire Housing Partnerships are part of the AHP Group we have been working very closely with the Tenants Association (MAHPTA) to develop a more in depth form of ongoing consultation on all aspects of the Group’s activities as a landlord.
The close working we have had with MAHPTA has involved the Tenants Association (including the new “village voices”) examining our business plan in detail. In particular, agreeing what rent levels are required to keep AHP viable; ensure we can keep houses well maintained and that we are able to move forward with plans to improve our service to tenants.
We believe this more detailed level of ongoing consultation with the Tenants Association is constructive, meaningful and ensures the voice of tenants is at the very heart of what the AHP Group is doing and where we want to go.
By 31st March 2015 AHP will have substantially completed the programme of upgrades required to ensure we are compliant with the Scottish Housing Quality Standard (SHQS). A small amount of upgrades may run into April and May – but not many. In view of this we have carried out a detailed reappraisal of our business plan requirements for 2015/16 and beyond and, we have built into our plan the best financial efficiencies we can. Indeed, some of the planned expenditure is intended to produce greater efficiency benefits to current and future tenants in overall services and energy costs.
After extensive consultation with the Tenants Association the Board has agreed that the proposed rents for 2015/16 should be restricted to an increase of 3.5% (excluding any residual impact of the rent harmonisation process). This is the lowest increase in the last 6 years.
It is also important to say this is the lowest increase AHP can sustain to ensure continuity of services provided to tenants; that we have proper provision for repairs; we can repay our debts and have sufficient reserves to meet our banking covenants.
We continue to look for ways of improving efficiency; making savings and enhancing the value of our work. A clear commitment to improving homes and services is central to what we are trying to achieve - we do though need the financial resources to achieve it.
Service charges are usually increased in line with the actual costs incurred in providing additional services such as grass cutting/landscape maintenance; cleaning and environmental upkeep. However, we are undertaking a major review of how additional services like these are provided with a view to trying to secure the most cost effective delivery we can.
In view of this we are pleased to say that in the majority of our developments where services charges apply the charges will be frozen for 2015/16. In a small number of schemes where actual costs have been higher than we can continue to fund at existing levels increases will be restricted to a maximum of £2.50 per month. Tenants who will be subjected to this modest increase will be informed on an individual basis.
Consultation/Giving Us Your Views
The main purpose of this consultation process is to seek your views on the way we are now consulting with the Tenants Association on an ongoing basis (rather than just sending a letter out once a year) and invite any comments you may have on the proposed increase. Your views are very important to the Group and MAHPTA – we do value your feedback. If you would like to give us your views please complete the form posted to you in the freepost envelope provided or use the downloadable form and email to email@example.com .
The Tenants Association (MAHPTA) is very keen to get more tenants involved. If you are interested in joining or wish to learn more please visit ‘Get Involved’ page for more details.
The consultation period will close on 30th January 2015. However, to help with this process we have drafted below a set of “Frequently Asked Questions” that may answer some of the more regular queries raised with us about rent setting. This consultation process takes into account the requirements of the Housing (Scotland) Act 2001
Rent Setting – Frequently Asked Questions
- Why do AHP need to review rents and service charges each year?
AHP’s rental income generated over the long term must ensure we can: Carry out planned and cyclical improvements to our houses. Meet expenditure required to manage and maintain our properties and tenancies. Ensure we can afford the planned improvements to our repairs; housing; energy advice and tenancy support services.
Repay our loan debts and other long term financial commitments. Provide additional necessary services such as grass cutting/landscape maintenance where these are required.
It is important to say we are a Registered Charity and non-profit distributing. All our efforts go towards sustaining AHP as a thriving viable landlord and, towards investing in our services to you.
- Is AHP able to generate income from other sources?
AHP has experienced a huge reduction in our new house building programme which has resulted from decisions taken by Government to reduce capital expenditure. We haven’t built any houses for the last 2 years. This means we are not at present able to generate income from the development allowances we previously enjoyed.
Some 98% of our total income is now entirely dependent on rents. This shows the importance of rental income to us and to you our tenants. We are trying to develop new income streams but this will take time to build up.
- What have AHP done with rental income?
During the period from April 2009 to May 2015 we will have carried out capital works on our properties to a value of £4.6 million. Most of this has been spent on upgrading our older stock including:
- Replacement heating systems (including boilers).
- Door and window replacements.
- Bathroom replacements.
- Installation of new kitchens.
We have also developed a revised cyclical maintenance programme and have introduced a new planned maintenance programme across our full stock – this includes both internal and external works of a very varied nature.
We have continued to ensure we have sufficient finance to manage the housing stock; keep the day to day repairs service operational and where possible improve it; repay our debts and meet our banking covenants.
We have also undertaken our first project using renewable energy and we now having to incur expenditure in planning for the introduction of the Scottish Governments new Energy Efficiency Standard in Social Housing (EESSH) – which will become the next standard to achieve by 2020.
Other remedial work assessed as necessary from a major stock condition survey that has been carried out.
- What will the proposed rent and service charge increase be used for?
AHP continues to face very significant business planning pressures and the rent increase will be used for:
- Introducing and implementing a newly procured repairs and maintenance programme from 2015.
- 2015-2020 – preparations for new EESSH standards relating to energy efficiency.
- Introducing a revised planned maintenance programme based on an updated life cycle costing across our housing stock.
- A continued drive to improve services and, ensuring we will comply fully with the new Scottish Social Housing Charter.
- Militating against the ongoing impact of welfare reform including major changes to Housing Benefit.
- Developing our energy support service.
- Supporting and increasing the level of tenant engagement by ensuring an active Tenants Association and supporting a tenant led scrutiny of our services.
- What does a 3.5% rent increase mean?
In order to help illustrate the impact of the proposed 3.5% rent increase the table below illustrates the “average” weekly rents for 2015/16.
AHP Average weekly rents (service charges excluded) 2015/16
|Size||Average Weekly Rent Increase||Average Weekly Rent 2015/16|
- Why does AHP apply Service Charges and what are they for?
AHP applies charges separate from rents to cover costs of providing services such as grass cutting and landscape maintenance. Such services are procured by competitive tender or quotation and carried out by contractors. We have to organise these services because they would not otherwise be undertaken by the local authority and do not feature within building costs so cannot be calculated in with the rent.
Tenants are sent an annual statement giving a breakdown of any service charges associated with their home.
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