Rent Consultation

Our tenants will soon receive a copy of The Tenants Voice newsletter which will also contain a letter inviting tenant to give their feedback on the next rent increase.  The purpose of the letter is to give you details on what your current rents are being spent on and also to remind you that the amount of rent that you pay has a direct impact on the range of services that we provide.  

How your rent is spent

Income and expenditure relating to the Council’s landlord role must be recorded separately from other council budgets.  The Housing Revenue Account (HRA) is a ring-fenced budget and uses income gathered from your rent to make repairs to your home, upgrade the housing stock, pay staff and fund new build housing.  The HRA also pays for historic loan charges as well as more recent borrowing for new housing.  A unique feature within the HRA allows officers to convert some of its revenue into capital (CFCR) to help fund future capital works (which pays for heating, kitchen and window replacements and so on) and reduce prudential borrowing.

The law says that all councils must balance their HRA’s annually.  This is to make sure that our housing activities remain affordable and feasible.  The rent you pay only benefit tenants and we therefore ask for your continuing support in keeping rent arrears to a minimum.  We have produced a chart to show what your rent funded in 2016/17.

What are the options?

Every three years, the financial health of the HRA is assessed independently to consider whether the range of housing services remains affordable.  The 2013 assessment deemed it necessary to have a 10 year rent increase to maintain services at current levels and help fund our new build housing programme.  This was set at 4.5% for the first two years and a 5% increase was planned for the remaining eight years.  The 2016 assessment has reviewed the performance of the HRA and has concluded that a 5% rent increase is no longer required at this time.

The level of council rents in Moray remains well below the national average.  In 2015/16 the average weekly rent for Highland Council was £68.13 for Aberdeenshire Council was £70.76, with our rent for the same period standing at £52.38.  Find out how we compare with other landlords in Scotland.

We carried out some rent modelling linked to new build housing and it is within this context that we now put forward two potential rent increase options for you to consider:

  • Option 1 - a 3.5% increase for each of the next three years which will maintain all existing services at current levels.
  • Option 2 - a 4% increase for each of the next three years would maintain services at current levels and also increase the supply of new build housing to 70 units per year.

What will these options mean for you in financial terms?

Based on the average weekly rent of £54.99 for 2016/17 (reflecting a 52 week rent year) the table below gives some indication of what average rent increases will look like depending on the level of increase adopted:

Increase 2017/18 2018/19 2019/20
3.5% £1.92 £1.99 £2.06
4% £2.20 £2.29 £2.38

Ideally we would wish to pursue option 2 for the reasons set out above but this is ultimately a choice for you.

How to give your feedback

You can respond by returning your tear off slip at the bottom of the letter in the prepaid envelope or fill in the survey online.

The consultation ends on 13 January 2017.

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