5.4 per cent rent increase

ANGUS Housing Association tenants will face a rent increase for next year of 5.4 per cent, the level of the Retail Price Index (RPI) at October 31, 2011

At the committee of management meeting last Wednesday, the budget for 2012/13 was confirmed at just over £6.1 million.

In their report to committee members, association staff outlined that three rent increase options of RPI only (5.4%), RPI plus a half per cent (5.9%) and RPI plus one per cent (6.4%) had been sent out in a consultation paper to the nearly 1,800 tenants in Angus and Dundee.

In their responses, 3.6 per cent of tenants voiced opposition to any rent increase whatsoever, 64.1 per cent backed the inflation only option with the combined balance of 32.3 per cent backing one of the higher options. The inflation only 5.4 per cent increase works out at an average of £3.36 per week for tenants.

Association chairman Hazel Farquhar, explaining the rationale behind the committee’s unanimous decision to limit the rent increase to the lowest possible option, commented: “It was clear to us in considering the comments expressed by our tenants that in these very tough economic times, many of them are really struggling financially and many have had their wages frozen for the last two years.

“We are, therefore, doing everything we can to keep our rent increase to the absolute minimum. To achieve this, we have, since the start of the current financial year, reduced our salary costs by £125,000 per annum, and made savings in other overhead costs.”

She went on: “At the same time, we are still very much committed to continuing to improve the quality of our older homes and to protect the excellent condition of all of our remaining housing stock. Accordingly, we have made provision to increase our investment in improvements and cyclical maintenance to £1.25 million next financial year. We will also be continuing with a programme of insulation works to increase the energy efficiency of our houses to try to offset some of the huge increases in heating costs being experienced by our tenants.”

Ms Farquhar said that by the end of 2012/13, around 99 per cent of the association’s housing stock will be compliant with the Scottish Housing Quality Standard and the aim is to remain financially prudent so that they can improve significantly on this standard in the years to come.

She continued: “Unfortunately, however, this will mean we will only be building four new homes. This is because of the cuts made in the Scottish government subsidies to housing associations. With the average subsidy for each new home built for affordable rent being cut from an average of £65,000 to an average of £40,000, the only way we could sustain a new build programme would be to cross-subsidise building new houses by further increasing our rents well above inflation and by cutting back on services and improvements.

“We considered these options and rejected them. With big cuts in the Housing Benefit help our tenants get from the welfare system looming on the horizon, budgeting for many of our tenants is only going to get tougher and we feel it is our duty to help keep their living costs as affordable as we possibly can.”