Knowes Housing Association's Tenant Rent Consultation 2025/26

BACKGROUND

As an important part of the annual budget process, Knowes Housing Association Ltd (KHA)’s Management Committee is required to review the rents the Association charges on an annual basis and decide whether it will be necessary to increase these rents for the forthcoming financial year 2025/26 (1st April 2025 to 31st March 2026).   

KHA’s Management committee recognise that these continue to be some of the most challenging financial times for households in recent memory. Many people are struggling as a result of higher prices for food, energy, and general living costs. Some of our tenants will be making difficult choices about buying food and heating their homes.

The Management Committee is commited to keeping rents and service charges affordable for our tenants. This year we are proposing an increase that is reflected in KHA’s Business plan to ensure that KHA remains viable over the long-term

WHAT HAS BEEN KNOWES HOUSING ASSOCIATION RENT INCREASE IN PREVIOUS YEARS?

Knowes Housing Association Ltd is a community benefit charitable organisation with the aim of providing social housing that is both well maintained and affordable to our tenants. Any surplus that KHA generates is reinvested into maintaing and developing existing and new housing stock. Historically, KHA has had low rental increases compared to the national averages for Registered Social Landlords and much less than the private sector.

The table below shows Knowes rental increases over the last 4 years compared to the Scottish average and inflation:

Historically, KHA’s business plan assumes rental increases of CPI + 1%. However, due to the disruptions of Covid on supply of goods and materials, as well as its effect on the cost of living for the tenants, the Management Committee has applied less than CPI rental increases for a number of years now. Thus, over the last 3 years Knowes rents have been lower than inflation and lower than national average.  Last year we were required to apply a rent increase of CPI plus 1% to ensure that we could continue to provide the service that tenants require, however we were still below the national average increase for the Scottish social housing sector. 

Average weekly rent comparisons:-

What are Knowes’ rents like compared to other social landlords who operate in the West Dunbartonshire Local Authority area?

For the financial year 2024/25, Knowes’ rents are comparable to the other social landlords in the area and below the average of the RSLs in this group.

 DO RENTS HAVE TO INCREASE AGAIN IN 2025/26

The costs of providing our services and maintaining our housing stock have increased signiicantly in the last few years. On average we saw our costs going up by 30% over the last two to three years and in some cases upwards of 50% on pre-pandemic levels.  Price inflation has started to slow down in the past year with the consumer price index (CPI) sitting at 2.3% in October 2024 up from 1.7% in September and CPIH sitting at the higher 3.2% up from 2.6% for September 2024.    The rate of inflation has fallen since October 2023; however this does not mean the prices are coming down in real terms – it only implies that prices are still rising but at a slower rate than last year.  The costs of materials and labour will never return to pre-pandemic levels and we are faced with meeting these higher costs now for the foreseeable future.

Therefore as we have applied less than inflation price increase for a number of years now, going forward we will by necessity have to apply higher than inflation rent increases going forward.  If we do not address the budget shortfall that rising costs have brought about then tenants will face a significant reducation in the repairs service with the consequence that our properties and wider estate will fall into disrepair.  This is not a viable alternative.  Not only are we are obliged by law to maintain our housing stock to required standards, we also plan to do more than this.  It is our business objectives to continue to provide an excellent repairs, maintenance and property improvement service to our tenants and to ensure we address any areas where we fall short of our high standards as soon as we can.  In order to achieve our business objectives we estimate that for next year we are looking at a minimum rent increase of CPI plus 1.2%. 

WHAT IS THE RENT INCREASE THAT KHA’S MANAGEMENT COMMITTEE IS RECOMMENDING?

After careful consideration the Management Committee of Knowes are recommending a rent increase of 3.5%. This is equivalent to October CPI +1.2% rate of inflation. Applying 3.5% will safeguard the medium and long term future of the organisation and ensures that our rents remain affordable to tenants and comparable to other landlords in the area.

A rent increase of 3.5% next year will cost our customers on average an additional £3.22 per week and will raise a further £225,427 for the financial year 2025/26 and every year thereafter.

This increase will allow us to carry on with all the planned improvements to our stock over the next 5 years.  In the next 5 years we plan to:

·        Invest £9m into our stock – this will include renewal of kitchens, bathrooms, windows and heating systems.  It will also allow us to factor in improvements to the energy efficiency of our homes, work towards net zero targets and further improve the wider estate and local community

·        Build 27 new homes in the local area, investigate other development opportunities and buy properties off the market for social rent where possible.  New homes for social rent are much needed in our area as we have over 750 applicants currently on our waiting list.

·        Continued improvement of our day to day repairs service.

We will continue to benchmark not only our rents but our management costs against other local landlords in the area to ensure our rents remain affordable and to ensure we provide a value for money service to our customers.

Please take the time to complete the survey below.

If you would prefer a paper copy by post or to make a telephone return please contact Amy Sweeney or Yvonne Sweeney on 01389 877752 Option 5.

Please complete and return by Tuesday 14^th January 2025.   Please only enter if you are a tenant of Knowes Housing Association Ltd.  Only the person holding the tenancy agreement in each household should return this form.  If you are a joint tenant then you both may submit a form.

We will require your name and address on the completed form.  All completed entries will be entered into a prize draw for a £50 voucher.

Rent Consultation Survey