Rent increase consultation 2022-23 – achieving fairness and improved affordability
Places for People Scotland invited feedback from customers on a proposed rent increase from 1 April 2021. We sought thoughts on a flexible approach where we will vary the increase to improve affordability and fairness. The range we proposed was 1% to 3.9% which was below inflation. After listening to our customers’ views we reduced the minimum level of the range to 0%.
The consultation took place in November 2021 and 323 customers completed the survey.
77.71% of respondents agreed with our flexible approach to improve affordability and fairness; and 62.23% agreed with the proposed range of 1% to 3.9%.
You can read the consultation paper here . If you would like a print copy of this, please contact us.
The rent increase follows the guidance from the Scottish Housing Regulator which asks registered social landlords to balance affordability and the ability to deliver services and manage properties. Our rent increase can be up to a maximum of inflation plus 1%. We use the September’s retail price index (RPI):
|RPI - retail price index
||Agreed Rent Increase
We must be financially strong to deliver our planned investment programme, maintain and improve the quality of our services and make a positive impact in our communities.
Rent is our main source of income and pays for maintenance, repairs, and housing management. Income from rents allowed us to keep essential services running throughout the pandemic. It also met the increased demand for emergency repairs and the additional costs of keeping colleagues and customers safe whilst working in their homes.
In 2020-21, 27p in every £1 collected was available for reinvestment and we used this to develop new homes. We will build over 300 for those in need this year, contributing to the Scottish Government’s housing targets.
We also spent 24 pence in every pound on planned maintenance and major repairs last year and will spend approximately £17 million in 2022-2023 to maintain and improve the quality and energy efficiency of customers’ homes.
We continued to operate and maintain services in line with Scottish Government guidelines throughout the pandemic and did not put any staff on furlough. The health and wellbeing of customers, contractors and colleagues remains our priority.
How we measure affordability
Since 2018 we have used the Scottish Federation of Housing Associations (SFHA) affordability tool for our affordability tests on rents. A “moderate incomes” approach using income data just above the level that would make households typically eligible for Housing Benefit has been developed. The lowest 30% of earnings is the benchmark, then adjustments are made for differences between single households, families, and pensioners. Our aim is to balance rents for customers and align their rents to 30% of their income.
Please visit our website for more information on the rent review, and to see answers to frequently asked questions. Information on the help and support available if you are in financial difficulty is available here.
Rent Consultation 2022-23 – Improving Affordability and Fairness
We want your feedback on our rent increase proposals before any final decision is made. Here is a summary of our position.
You can read more detail here as well as finding out how to give us your feedback.
The deadline for feedback is 28 November 2021.
- We follow rent increase guidance from the Scottish Housing Regulator.
- We use the Scottish Federation of Housing Association’s Affordability Tool. This tests if our rents meet the recommended affordability level of 30% of all income which includes benefits.
- Our rent policy is usually the September retail price index (RPI) rate plus 1%
- This year RPI is 4.9% which could mean a possible 5.9% increase if we choose to follow that policy.
- In two of the last four years our rent increases were lower than RPI.
- We know that incomes are being squeezed right now and that will be a worry for some.
- We want to improve affordability across all our rents. We want to get everyone as close to that 30% level as possible next year. We will continue to improve affordability in coming years.
- This year we want your thoughts on a flexible approach where we will vary the increase for different households to improve affordability and fairness. The range we are proposing is 1% to 3.9%. This is below inflation.
- The essential costs to build, manage, maintain, and improve your homes are increasing with the high level of inflation. We need to make sure we can cover these increased costs.
- We will continue to invest in our services and in your home. (See “Quality of repairs and the standard of our properties” below.)
- We need to meet energy and fire safety standards.
- We plan to build more affordable homes. (See “New affordable homes” below.)
- We will make the final decision on the rent increase in December 2021 after getting your feedback.