2023 - 2024 Rent Charges and Management Fee Consultation

Pineview only makes charges to ensure there are funds to undertake our ongoing work. The only income the Association receives comes from the rents that tenants pay, and we always do our best to keep your rents as low as possible.

The Association is a non-profit making charity. Any surplus income from any year is put aside for future repairs and improvement works such as kitchens, windows, boiler replacements etc.

Without enough rental income to generate surpluses to set aside, we do not have any money to keep tenants homes up to standard. Likewise, the lower the rent increase, the lower the amount of money we have to spend. Our costs increase year on year, and this is why rents also have to increase.

We forecast into the future to make sure there will always be sufficient resources to provide services and maintain homes and areas.

In order to have a forecast we need to make an assumption within our financial business plan about the amount our income will increase each year to allow us to meet our costs which increase each year. The base line assumption is the October CPI % increase. October 2022 CPI was 11.1%.

A key part of our rent setting process involves consultation with our tenants on what level of rent is set from April. 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 and 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 housing associations only set rents once a year, every April.

Ministers have said that they will take into account what rent increases are being consulted on when they make a decision – no later than mid-January 2023 – on what the position is to be on social housing rents from April 2023.

However, both the Scottish Government and the Scottish Housing Regulator have said that housing associations should still carry out our normal consultations with tenants on rents for next year.

The rent charge affects what the Association can do. Our costs have increased considerably above CPI so any rent increase below CPI will mean reduced income and therefore reduced money to be able to be spent on tenant and property services.

If the rent increase is less than inflation and the high inflation rate continues it means that the Association will inevitably experience a significant real terms drop in income.

The Management Committee is acutely aware of the impact of the cost of living crisis on tenants, with most people struggling with higher prices for food, energy and general living costs and also the many inflationary pressures / increasingly challenging cost environment which the Association has been facing.

However, as a tenant focussed organisation and in recognition of how tight thing are for everyone right now we believe our priority is to take action to limit any increases and then deal with any shortfall in income in the future.

We are therefore not proposing to increase rents in line with inflation and our costs. As such, the Management Committee have agreed to consult on three options:

Option 1 – 3% increase.

Option 2 – 5% increase.

Option 3 – 7% increase

Tenants Rents
Rents are calculate according to the size, type and amenities of a property. Points are awarded for each of these and they are then added up and multiplied by a factor to give the monthly rent. The rent structure details the points for each factor and is included within the newsletter and available on our website - https://pineview.org.uk/how-rents-are-set/

Sharing Owners Charges
Sharing owners are charged a proportion of the rent for a rented property in line with the % that the Association owns. A deduction is then made for a maintenance allowance (as sharing owners need to pay for their own repairs, pay for a share of common repairs and maintenance, and pay for their own replacements such as kitchens and boilers). A shared owner management fee is then added on for managing and factoring. Other charges are for services as appropriate, such as gas servicing. For sharing owners the consultation options relate to the core rent element and sharing owner management fee, with service charges being charged at cost.

Owner Occupiers Charges
Owners are charged an owner occupier management fee for factoring, and also charged service charges for any services as applicable to the property/owner. The consultation options relate to the management fee, with service charges being charged at cost.

Your opinion matters
Please can you take the time to consider this consultation and let us know your opinion. Please can you let us know your opinion by 4pm on Monday 16th January 2023. Following this, the Management Committee will consider the consultation responses (all responses will be reported anonymously) and make a decision for charges to apply from 1 April 2023. This outcome will be advised to everyone by letter by the end of February 2023.