Rent Consultation
Rent Increase Proposals 2023/24
This is the time of year when we start working on our budgets for the next financial year, starting in April 2023, and, as a key part of that, we're starting our consultation with tenants on what level of rent is set from 1 April 2023. The law requires us to do this every year.
You've probably heard that between now and the end of March 2023, all rents – for social housing tenants and for private tenants – have been frozen by the Scottish Government as a result of the cost-of-living crisis. This hasn’t affected your rent yet, as we only set our rents once a year, from the 1 April.
The Scottish Government will decide later this year whether housing associations will be allowed to raise rents, if necessary, in 2023/24. However, both the Scottish Government and Scottish Housing Regulator have said that housing associations should still carry out our normal consultations with tenants on rents for next year. We will contact you again once we know what the Scottish Government has decided.
How will we set your rent for next year?
As you know, Wellhouse Housing Association is a charity which exists to provide good quality homes at affordable rents. We will always do our best to keep your rents as low as possible.
The cost-of-living crisis affecting our tenants, and the many inflationary pressures which the association has been facing, make it especially important that our consultation with you finds the right balance between rent affordability and the need to maintain our services and continue investing in our homes. This includes things like replacing kitchens and bathrooms and further improving the energy efficiency of our homes to help limit your energy costs.
What should you do next?
We have set out information below on the options we are considering for next year. We hope you will reply to let us know what you think.
Proposed Options for 2023/24 Rent Increase
Given the current rate of inflation, however measured, we are not proposing to increase rents by our normal Business Plan assumption of inflation plus 1%, as this would have amounted to an increase of 12.1% if using October 2022 CPI as the inflation level and the Management Committee have deemed this not to be appropriate. After careful consideration, our Management Committee are proposing for the 2023/24 rent increase two options.
Option 1 Flat Rate Increase of 5%
This level of increase will generate an additional £169,137 of rental income and should allow Wellhouse to meet all of its obligations currently included in the Business Plan, but we would need to delay our plans to build new housing on vacant sites in the area. We would be able to continue with our service improvement plans.
Option 2 Flat Rate Increase of 3%
This level of increase will generate an additional £99,583 of rental income and would result in Wellhouse not being able to meet all of its obligations currently included in the Business Plan. This would include delaying our plans to build new housing on vacant sites in the area and taking steps to reduce expenditure to protect the financial viability of the Association. This includes reducing planned improvement expenditure on things like kitchens and bathrooms, by £115,000. However, we believe this increase will allow us to maintain our current level of service.
What happens if the Scottish Government extends it’s rent freeze beyond 31st March 2023?
If we are unable to increase your rent from 1st April 2023, this would result in Wellhouse not being able to meet all of its obligations currently included in the Business Plan, including our plans to build new housing on vacant sites in the area, and we would have to take steps to reduce expenditure to protect the financial viability of the Association.
This could mean that we need to reduce our reactive maintenance spend. These are the repairs that we rely on you reporting to us. At present we offer and deliver a highly responsive service, with response times better than many other associations.
We would also have to look at reducing our overhead costs.
What does this mean for my rent?
The following table illustrates the impact of both options on our average rents:
|
Property Size |
Average Monthly Rent 2022/23 |
Average Monthly Rent 2023/24 (3% uplift) |
Monthly Increase |
Average Monthly Rent 2023/24 (5% uplift) |
Monthly Increase |
|
2Apt |
£317.79 |
£327.32 |
£9.53 |
£333.68 |
£15.89 |
|
3Apt |
£350.69 |
£361.21 |
£10.52 |
£368.22 |
£17.53 |
|
4Apt |
£391.46 |
£403.20 |
£11.74 |
£411.03 |
£19.57 |
|
5Apt+ |
£432.49 |
£445.46 |
£12.97 |
£454.11 |
£21.62 |
Please note that these averages are based on the range of existing monthly charges per apartment size, so may not match the rent you will have to pay.
The table below lets you see how our average weekly rent in 2021/22 (the latest available figures) compares with other housing associations.
|
Comparator |
Average Weekly Rent |
|
Wellhouse |
£81.25 |
|
Peer Group – Medium Urban |
£83.74 |
|
All Registered Social Landlords |
£91.61 |
What will my rent be spent on?
Supporting our Tenants and our Community
Wellhouse currently spends around £41K on advice services for its tenants and a further £49K on supporting its tenants and community. We also make available £22K to support projects in the area.
Since April 2021 until now, we have also been successful in securing external funding of over £28.5K to help our tenants and community deal with issues including food and fuel poverty caused by the impacts of Covid 19 and the cost-of-living crisis.
Our Investment Priorities for 2023/24
|
Capital expenditure |
3% |
5% |
|
Kitchens |
115,000 |
180,000 |
|
Bathrooms |
130,000 |
180,000 |
|
Boilers |
69,966 |
69,966 |
|
Total |
£314,966 |
£429,966 |
We trust the above information is useful in helping you form a view on our proposals but if you require any further information, please let us know.
Please let us know your thoughts
To make this as easy as possible for you, we have included a link to a survey form for you to complete and return to us by post. You can post it into the box attached to the gates at The Hub if you prefer.
For those who prefer to communicate with us by text we will issue a short survey for you to complete and those who prefer using e-mail can request that the survey be sent to you for return to the e-mail address we have recorded for you.
You can also telephone us and leave your comments – you can contact your Housing Officer.
All surveys that are returned will be entered into a free prize draw and 2 lucky winners will receive a £25 voucher
Please note surveys must be returned to us by Friday 13th January 2023.
Please take the opportunity to return a survey with your views to us, using the method most suitable to you.
Please also be assured that your views are important to us. Rent levels obviously affect all of our tenants, which is why we need as many of you as possible to take the time to respond.
Your responses will be considered by the Management Committee prior to a final decision being made on this matter.
Thanks to those who attended our drop-in session on Monday 12th December 2022 and to the members of our Customer Opinion Panel, for giving us their views.
If you are worried about paying your rent, please get in touch with us straight away, so we can talk about how we can help.