2014/15 Rent and Service Charge Consultation


January 2014

In November 2013, the Board of Aberdeenshire Housing Partnership (AHP) considered the proposed rents and service charges for 2014/15. The Board took into account that a very comprehensive information and consultation process has been undertaken with tenants over the last two years. At those times we have given a full explanation of AHP’s business planning commitments including the importance of the rent increases and rent harmonisation programme to improving and maintaining the homes and services we provide.

The Housing (Scotland) Act 2001 requires AHP to consult with tenants on any rent increase proposals and, to have regard to tenants’ views when finalising any increase.

If you would like help to understand this information or require it in a different format such as large print hard copy please contact us. If you require the information in a different language, please click the translation button on the home page.

Proposed Rent and service Charge Increase

The AHP business plan proposes a 5% rent increase for 2014/15. The table below highlights what this will mean as an average increase subject to the type and size of property that you live in. Please note these are average figures and the actual amount for your property will depend on your current rent level.

Average weekly AHP rents (service charges excluded)

Bedroom size Apr-10 Apr-11 Apr-12 Apr-13 Apr-14 Average weekly increase
1 £62.88 £67.42 £71.39 £74.95 £78.50 £3.56
2 £68.98 £74.45 £78.55 £82.45 £86.55 £4.10
3 £80.61 £87.02 £92.24 £96.98 £101.84 £4.86
4 £88.67 £95.60 £101.76 £107.52 £113.12 £5.60
5 £101.70 £107.15 £112.51 £118.13 £124.04 £5.91

It is important for us to give a reminder, as we did last year that some tenants will also still be affected by the rent harmonisation process. It is important for those tenants affected to note the proposed increase is in addition to any increase that may still be due as a result of the rent phasing. This could particularly apply to tenants who first moved into new build homes over the last 3 years.

A small number of tenants will be aware their pointed rent is lower than the current rent payable. In view of this the current rent level is frozen until the pointed rent equalises to it under the harmonisation process. It is important to note this approach for certain properties was part of the new rent system implemented in 2010 and means the rent remains frozen until harmonisation takes effect.

Service Charges

Any service charge increase will reflect the actual costs incurred in providing the additional services concerned (e.g. grass cutting/landscape maintenance; cleaning; environmental upkeep) and the associated administration charge.

While it is possible some service charges will not increase, for those properties where an increase is unavoidable we anticipate this will result in an average increase of some £ 0.42 per week/£1.82 per month on current service charge levels.

Please note all figures provided above are just a guide and do not necessarily represent what the actual final rent and service charge increase will be for your own home.

We do understand that tenants as well as AHP are continuing to face up to real financial challenges at present and we do not underestimate this. We can assure you we are working hard to minimise the impact. We are further developing our activities to help offset rent increases including close working with Local Authorities in relation to the welfare benefit reforms; taking measures to improve energy efficiency in tenants’ homes and continuing to look for wider efficiency savings.

Why AHP need to review rents and service charges each year?

When tenants were first advised of the rent pointing scheme being introduced in 2009/10, AHP provided information on how rents were being brought into line across our stock. This harmonisation is being achieved through the pointing system itself and also through incremental increases on an annual basis to ensure AHP has the financial capacity to bring all our housing stock up to the required Scottish Housing Quality Standards (SHQS) by 2015 whilst maintaining the level of viability expected by our lenders and the Scottish Housing regulator.

AHP’s annual budget review has consistently shown that the programme of rent increases applied since 2010 has been essential. After the latest annual budget review AHP’s Board has agreed that the 5% incremental increase contained in the current plan should continue to be applied for 2014/15. The annual increase has been agreed as a key part of the business plan and is critical to the remaining funding of SHQS and future capital/cyclical programmes.

We do recognise that rent increases can create unwelcome pressures on household budgets. However, you should be reassured 2014/15 will be the final year of the harmonisation programme incorporating the 5% increases for all but a very small minority of tenants.

AHP’s budget for 2014/15 takes into account the significant business planning considerations that has underpinned rent increases within the 5 year programme to date including:

  • completion of the SHQS capital improvements programme by the 2015 target
  • preparations for 2015 – 2020 SHQS standards relating to energy efficiency
  • a drive to improve services and ensure regulatory/Scottish Social Housing Charter compliance.

In the 2014/15 budget we are also making a clear tenant and service led commitment by undertaking vital financial preparations for:

  • the continuing impact of welfare reform;
  • the necessity to forward plan capital improvements to our stock
  • ensuring realistic provision for day to day repairs and maintenance
  • consolidating a comprehensive programme of cyclical works
  • ensuring long term viability

AHP’s rental income generated over the long term will be used to:

  • Carry out planned and cyclical improvements to our houses – this will cost AHP £1.4 million to complete the SHQS programme by the 2015 target and nearly £1 million annually thereafter.
  • Meet expenditure required to manage and maintain our properties and tenancies – this costs AHP over £500,000 annually.
  • Ensure we can continue to afford the programme of improvements to our repairs; housing; energy advice and tenancy support services.
  • Repay our loan debts and other long term financial commitments – this costs AHP over £1.4 m annually.

It is important to emphasise 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.

Giving Us Your Views

We do appreciate your feedback. If you would like to give us your views on any of the information we have provided please complete the tear off form below and return it in the prepaid envelope.

PLEASE NOTE ANY COMMENTS YOU DO MAKE WILL BE TREATED IN STRICT CONFIDENCE.

Please complete this form by 29 January 2014.

For more articles please visit our News and Events section.