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We’ve sent a letter to all tenants relating to our rent consultation. If you’ve opted for paper free, you should have already received this by email. If you are not paper free, our letter is making its way to you and you should receive this shortly. You can also access a copy of letter below. You may also receive a call from our housing officers about the rent consultation as we are keen to hear from as many of our tenants as possible. The survey can be completed on your tenant portal: my.clochhousing.org.uk.
Cloch Housing are asking for your views on our proposed rent increases for 2023/2024. We want to hear what you think and all the details on how to put forward your views are in the letter below. We realise there is a lot to take in, but we always want to give you as much information as possible to allow you to understand what we are proposing.
We are proposing a 6% or 7% rent increase.
- Introduction
- Do rents have to increase?
- What happens if we increase the rents below inflation?
- What happens next?
- What rent money is spent on
- What do the different rent options mean to me?
- Service Charges
- Have your Say
- How can we help?
Introduction
Cloch Housing Association has delayed our usual consultation timescales on our proposed rent increase, which would normally have taken place in December 2022. We delayed this because The Scottish Government said that landlords cannot increase rents until 31st March 2023 and this freeze may be extended past this date, or that a potential rent cap may be applied. The Scottish Government have been working closely with the housing sector and now understand that all rental income is reinvested into our homes and services and housing associations will always aim to keep rents as low as possible. They have therefore announced that they will not extend the rent freeze legislation on the understanding that housing associations will not increase rents from the 1st April 2023 above CPI inflation, (10.7% as at November 2022).
Do rents have to increase?
We understand that increasing rents may seem unreasonable during the current cost of living crisis, however we are having to balance this against the cost of providing our services. Costs have dramatically increased over the last year and in many areas the increases have been well above inflation, for example
- Energy costs have increased substantially.
- Our repairs and maintenance costs have increased between 20% and 30%
because of higher material and labour costs. - Our £14 million loan funding has had a rise in interest costs linking with mortgage rate increases.
For Cloch to continue to provide well maintained and improved homes a rent increase is required to cover our increased costs. If we do not increase rents, we would need to make significant savings - cutting back on replacing items such as kitchens and bathrooms, cancelling or delaying planned maintenance and possibly, reducing services by cutting staff levels.
What happens if we increase the rents below inflation?
Any increase below inflation has an impact on the money we have to deliver services — not just in one year but every following year too. If we apply a below inflation rent increase and do not reduce our costs eventually the Association will run out of money.
We have listened to customers' views and concerns about the cost of living crisis, and we are not proposing to increase rents in line with inflation and our costs.
We have been working on preparing our budgets for the next financial year, starting from April 2023 and have carried out a review of where savings can be made to help reduce the rent increase required. We have reviewed and adjusted our planned maintenance programme over the next five years with a reduction of £4.4 million on proposed works. It is our intention to reconcile these works in the future when the market stabilises and to allow Cloch to achieve more value for money. We have also been working with our lenders and have been able to re-mortgage some of our loan funding which has reduced loan interest costs.
What happens next?
The information in this letter will explain what we spend rent money on and how any potential rent increase will impact on what we can spend from 1st April 2023.
We will publish our survey results on our website once it closes and we will also write to you by the end of February to advise you of your new rent charge from 1st April
What rent money is spent on
The chart shows how the cash received from our rent and other income is planned to be spent in 2023/24, with the majority of the rental income invested in our homes.
Key information:
Investing in our homes includes repairs and planned maintenance. Staff provide the services.
Loan payments include interest costs of borrowing as well as amounts to pay back the loans we have for building houses.
Other costs include medical adaptations to properties and wider action activities to support tenants, for example, financial fitness advice and tenant sustainability support.
What do the different rent options mean to me?
We want to consult with you on a rent increase of 6% and 7%.
A 6% rent increase is the lowest increase we can apply without significantly impacting our services and would allow us to invest around £7.8 million in planned maintenance over the next 5 years. This is 35% lower than what we had planned to invest if an inflationary rent increase was applied, however allows us to carry out all essential planned maintenance work.
A 7% rent increase, as opposed to 6%, will mean there is more money to provide support to our tenants over the coming year and provide more money to spend on planned maintenance over the following years. We would use the additional income generated to:
maintenance programme from 2024/25 to 2027/28. As an example, this amount would allow an additional 90 kitchens to be replaced in homes subject to future material and labour cost variations.
2022/23 for each size of property, (not including service charges), and compares this to the average weekly rent based on the increase options of 6% and 7%:
|
Property Size |
Average weekly rent 2022/2023 | Average weekly rent for 2023/2024 based on 6% | Average weekly increase based on 6% | Average weekly rent for 2023/2024 based on 7% increase | Average weekly increase based On 7% |
|---|---|---|---|---|---|
| 1 apartment | £72.45 | £76.85 | £4.40 | £77.58 | £5.13 |
| 2 apartment | £81.73 | £86.64 | £4.91 | £87.45 | £5.72 |
| 3 apartment | £95.20 | £100.91 | £5.71 | £101.86 | £6.66 |
| 4 apartment | £108.15 | £114.63 | £6.48 | £115.72 | £7.57 |
| 5 apartment | £102.82 | £128.07 | £7.25 | £129.28 | £8.46 |
| Average Overall | £95.67 | £101.42 | £5.75 | £102.38 | £6.71 |
The table shows that a 6% rent increase would on average increase rent by £5.75 per week and a 7% increase would, on average, increase rent by £6.71 per week. The difference in the two options is £0.96 per week.
Service Charges
Service charges are collected to cover the costs of additional services. We recover the full costs of providing any service by dividing the projected costs for the year by the number of tenants/owners who receive the service. You only get charged for the service if you receive it.
Rent Restructure
As you are aware, we wrote to tenants in October 2019 advising that following consultation about a fairer rents system, rents would need to be restructured over a period of time to ensure target rents are achieved and over the past few years we have been working through this process.
We want to get your view on whether you think we should postpone this process for this year only, as the rent restructure can increase some tenants' rents by an additional amount above the 6% or 7% rent increase, we are consulting on, for example a maximum of a further £10 per month was applied in 2022/23 to some tenants' rents as part of the rent restructure.
An option is to freeze this process for 2023/24, meaning all tenants rents will increase by the 6% or 7%, (depending on the outcome of the rent consultation) and there would be no further increase on top of this associated with the rent restructure.
Have your Say
You have until the 27th January 2023 to complete the survey or attend a forum.
- Complete our survey on your tenant portal: my.clochhousing.org.uk.
- Telephone us on 01475 783637 and a member of staff will complete the survey for you — this should take no more than 5 minutes.
- Attend one of the open day sessions noted below:
Monday 23rd January 2023 - 6pm to 8pm at Gibshill Community Centre, 2 Smillie Street, Greenock. Hot food served at this event.
Thursday 26th January 2023 - 2pm to 4pm at Cloch Housing Association, 19 Bogle Street, Greenock. Afternonon tea will be served.
Staff will be on hand at the open days and evening session to answer any questions about the rent consultation or discuss any other areas of our service that you want to talk through.
If you need help, including translation services, please contact our office on 01475 783637 or email us: office@clochhousing.orq.uk
How can we help?
If you are struggling to pay your rent or other household bills, we can help. Our partners at Financial Fitness offer free impartial Welfare Rights advice and money management help. There could be a benefit that you are entitled to, even if you are currently working, or maybe you need help with your household budgeting skills. Financial Fitness staff are now holding surgeries from our office, and you can contact your Housing Officer to make an appointment or contact Financial Fitness directly on 01475 729239. There may also be other help the Association can provide so please contact us for more information.
