Elected Member Briefing - Rent levels for our tenants

About this briefing note

Report by: Elaine Ritchie

Date: 27 January 2023 

Subject: Update on Housing Revenue Account Budget Setting 2023/24 - Rent Levels for Our Tenants

Responsible Officer: Steven Coyle, Finance Team Leader

Details

Purpose

This briefing note provides an update on Council housing rent levels for 2023/24.   

Briefing Information 

A briefing note was issued to you in November 2022 (EMBN 043-22, exempt from publication) with information about our rent level proposals for 2023/24, and the annual consultation with our tenants on rent levels. 

Every tenant household (7,923 properties) was sent a Rent Level Options consultation form in October 2022 presenting three options for 2023/24 rent levels, and what each option meant for their housing services. Tenants were asked to respond with their preferred option from a choice of a: 

• 2.2% rent increase  
• 2.9% rent increase  
• 3.2% rent increase  

Tenants were also able to take part online using the Council's Consultation Hub. The consultation ran for eight weeks over November and December 2022. 

Consultation results 

A total of 2,625 tenants responded to the consultation, a figure that represents 33% of our tenants. This was the biggest ever response to our annual rent level survey and compares to 2,177 responses last year.  

Over half of tenants said they preferred the option of a 2.2% rent increase:  

• 2.2% increase (51% of tenants chose this) 
• 2.9% increase (33% chose this) 
• 3.2% increase (16% chose this) 

A paper went to Housing and Social Wellbeing Committee on Wednesday 25 January 2023 which recommended a 2.2% rent increase for 2023/24 in line with the views of our tenants.  

This proposal was approved by the committee, and the new rent increase will come into effect from Monday 3rd April 2023.  

What the rent increase will pay for 

Our Capital Investment Programme work is guaranteed and will see investment in:  

• Paying for fixed cost increases 
• Increased cost of materials - £281,000 
• Increased costs for the service and maintenance of emergency lighting - £204,000 
• Increased utility costs - £150,000 
• Contract price increases - £139,000 
• Electrical Inspection Condition Reports for each of our properties - £100,000 
• Additional staff to help us achieve a net-zero carbon emissions housing stock - £44,000 
• Fire Sprinkler Systems - £12,000 
• Continued funding for digital, financial & social inclusion 

Option 2 - the 2.2% increase -  will also pay for enhanced service provision for tenants as well as some cost pressures being faced by the Housing Revenue account:  

• Additional resources to help us achieve a net-zero carbon emissions housing stock (£44,000).  
• Buying back ex-Council properties to increase our housing stock. An additional £15 million will be invested over the next five years to buy-back 30 ex-Council properties each year. 
• Covering the increasing costs of buying stock for repairs and improvements (£281,000).   
• Electrical Inspection Condition Reports (EICR) - £100,000. We are now legally required to ensure all tenants' homes have an EICR to confirm they meet electrical standards. We must test all of our properties every 5 years. 
• New fire sprinkler systems - £12,000. 
• Continued funding for Digital, Financial & Social Inclusion. 
• Increased costs for the service and maintenance of emergency lighting - £204,000. 
• Increased utility costs - £150,000. 

Affordability 

When we put together our rent level proposals we do a lot of work to make sure they are affordable for our tenants.  

We currently have the sixth lowest council rent level in the country and we estimate that our rents are around 9% lower than neighbouring local authorities and 23% lower than local Housing Associations. 

The 2.2% increase will give Perth & Kinross Council an average rental figure of £75.23 per week compared to the projected Scottish local authority average of £80.41.  

The average weekly rent increase on our properties will be:  

• Bedsit - £1.08  
• 1 Bedroom - £1.47 
• 2 Bedroom - £1.59 
• 3 Bedroom - £1.78 
• 4+ bedroom - £1.92 

We carried out an assessment and found that 87% of our residents can afford our proposed rents based on their income alone, without considering any housing benefit they receive. 

In 2023/24 we will continue to have one of the lowest local authority rents in Scotland whilst being able to make important investments in Housing Services that our tenants have told us they want to see, and covering costs faced by the HRA. 

Cost of living support for our tenants 

We know that for many of our tenants' finances are challenging at the moment, so we have also put in place a wide range of financial help and support for any tenant who needs it. 

Our Tenancy Sustainment Fund and Housing Locality Teams' 'Think Yes' budgets are available to provide real and practical financial help for our tenants. We also work very closely with colleagues from the Welfare Rights Team and Perth Citizens Advice Bureau to provide financial help and advice to any tenant who needs it.  

Anyone who is struggling to pay their rent can contact us on 01738 476000 (option 2) to take advantage of the financial support that Housing staff and other Council colleagues can provide.