Background
This is the time of year when the Co-operative is planning the budget for the next financial year starting in April 2024, and as a key part of that, we are carrying out our statutory consultation with tenants on what level of rent is set from April.
The Management Committee recognise that these have been some of the most challenging financial times for households in recent memory. Many people are struggling due to higher prices for food, energy, and general living costs.
The Management Committee is committed to keeping rents as low as possible and to finding the right balance between affordability and the need to cover the cost of providing services and continuing investment. The majority of our income (approximately 97%) comes from rents.
Do Rents have to Increase?
The costs of providing services, meeting our legal and statutory obligations, and keeping the area safe and tidy have gone up significantly over the last two years.
| The last two years have seen rent increases of 2.7% from April 2022 and 5% from April 2023. The Scottish average rent increase of social landlords from 1st April 2023 was 5.07%. | In October 2022, inflation (CPI) was 11.1% – a 40 year high. CPI at March 2023 was still above 10%. CPI at September 2023 was 6.7% and in October 2023 it was 4.6%. |
The Rent Policy
WWHC’s Rent Policy seeks to balance the provision of housing services with affordable rents. The Co-operative is non-profit making but we need to generate a surplus in order to have funds to pay for major repairs and renewal programmes when required. The Rent Policy is points based with factors attributable to service and amenity elements so that there are rent differentials between different property sizes and types. The Policy and Business Plan are linked to CPI.
How is Income Spent?
The Co-operative’s income needs to cover the cost of:
- Management Costs
- Maintenance Costs
- Voids and Bad Debts
- Development Costs not met by other grant funding
- Loan Repayments
- Future Major Repairs and Renewal Costs
No other Registered Social Landlord in Scotland has a high proportion (61%) of multi storey flat stock type.
Below is a breakdown of how money is spent across budgets:
| % of budget 2023/24 | % of budget 2024/25 | |
| MSF costs including Concierge | 24.8% | 25.0% |
| Planned and reactive maintenance costs | 18.8% | 21.6% |
| Insurances | 3.1% | 4.4% |
| Office staff salary and employers costs | 24.5% | 23.4% |
| Office maintenance and running costs | 4.1% | 4.4% |
| Affiliations, fees and training | 3.0% | 2.9% |
| Community Support / Wider Action | 2.2% | 1.7% |
| Loan repayments | 19.5% | 16.2% |
Supporting our Tenants and Community
Since March 2020, WWHC has been successful in securing external funding of over £300,000 to help our tenants with issues including food and fuel costs caused by both the pandemic and cost of living crisis. We have also put in place an additional welfare benefit advice service.
Maintenance Plans – Next 5 Years
- MSF external panel cleaning
- Flat Entrance Doors – MSF and LR Properties
- Kitchens and Bathrooms – condition surveys currently being carried out have identified a number as needing renewed over the next 5 years
- Common area / close and landing improvements – lighting, painting and flooring
- Hard landscaping / car parking improvements
- Boiler upgrades (for properties built 2009)
- External painting works (for properties built 2009)
What has the Management Committee considered so far?
The Committee has carefully considered options ranging from 4% to CPI at 6.7% in September 2023. Committee took into account the significant costs increases over the last 12 months, with the actual inflation figure for areas such as labour and materials for our property maintenance at around 10% currently. WWHC’s insurances is another spend area where costs have risen significantly and well above CPI.
- We take expert advice and benchmark costs e.g. maintenance costs. There are number of pending procurement exercises with anticipated cost increases budgeted for.
- We benchmark multi storey flat rent levels and services against other landlords with this stock type.
- We procure services jointly with other landlords where possible.
- We are implementing a new IT system which means we have been able to reduce staff costs.
- We have longer-term contracts with fixed costs in place where possible e.g. landlord energy supplies fixed until 1st April 2025.
- We are members of appropriate industry bodies where cost information is shared and collective agreement reached.
- We will continue with close monitoring and explore additional efficiency savings.
Rent Increase Proposal of 5% for 2024/2025
The Management Committee have a duty to consider the long-term impact of decisions that are made today and need to ensure long-term financial viability.
A 5% increase is the lowest that can be proposed without significant reductions in services and future investment plans.
This option aims to:
- Sustain the current levels of services in the short term
- Generate a positive cash flow for the Co-operative in the longer term
- Maintain our planned investment programme to our properties from 2024/25
What would this mean for rent levels?
The following table illustrates the impact on average rents*:
| Property Size | Average Weekly Rent 2022/23 | Average Weekly Rent with 5% uplift | Average Weekly Rent with CPI (6.7%) uplift |
| 2 apartment | £85.42 | £89.28 | £90.13 |
| 3 apartment | £101.63 | £105.38 | £106.39 |
| 4 apartment | £114.01 | £119.16 | £120.30 |
| 5 apartment | £125.99 | £128.42 | £128.96 |
Tenant Focus Groups
Two tenant focus group sessions will be held on Monday 8th January 2024 where we will be requesting feedback on our recently published Allocations Policy Review and this rent consultation. Sessions planned as follows:
| Location | Tiree, Whitlawburn Community Resource Centre |
| Session 1 | 1pm – 2pm |
| Session 2 | 4.30pm – 5.30pm |
We encourage tenants and members to attend to share their views. You can attend any session noted above. Refreshments will be provided.
Consultation Response
For all tenants that we hold mobile numbers or email addresses for, you will be sent a specific link to allow you to respond to the consultation online.
Please send us your comments no later than 5pm on Wednesday 17th January 2024.
You can also respond by any of the following methods:
| Respond to the Online Survey Anonymously | https://cxfb.co.uk/sc/8A0E2912/8C012812 |
| In Writing | Please fill out the form delivered to your home and hand it in to the office or Concierge station. Spare forms are available at the office. |
| By Telephone | 0141 641 8628 |
| By Email | enquiries@wwhc.org.uk |
| Via our website | Contact us |
If you require further information, please let us know.
| Rent levels affect all of our members and tenants so it is important that as many tenants as possible respond. We appreciate you taking the time. All responses will be considered by the Management Committee when making a final decision. |
If you are worried about paying your rent, please contact us as soon as possible so we can discuss how we can help.
