AHA tries to keep costs as low as it can

THE Angus Housing Association has set its budget for 2012/13 at just over £6.1 million and agreed to limit its rent increase for next year to 5.4%.

In their report to Committee members, the Association staff outlined that three rent increase options of RPI only (5.4%), RPI plus a half percent (5.9%) and RPI plus 1 percent (6.4%) had been sent out in a consultation paper to the Association’s nearly 1,800 tenants in Angus and Dundee.

In their responses, 3.6% of tenants voiced opposition to any rent increase whatsoever, 64.1% backed the inflation only option with the combined balance of 32.3% backing one of the higher options.

The inflation only 5.4% increase works out at an average of £3.36 per week for tenants.

Explaining the rationale behind the Committee’s unanimous decision to limit the rent increase to the lowest possible option, Association Chairman, Hazel Farquhar, said: “It was clear to us in considering the comments expressed by our tenants that in these very tough economic times, many of them are really struggling financially and many have had their wages frozen for the last two years.

“We are, therefore, doing everything we can to keep our rent increase to the absolute minimum.

“To achieve this, we have, since the start of the current financial year, reduced our salary costs by £125,000 per annum, and made savings in other overhead costs.

“At the same time, we are still very much committed to continuing to improve the quality of our older homes and to protect the excellent condition of all of our remaining housing stock.

“Accordingly, we have made provision to increase our investment in Improvements and Cyclical Maintenance to £1.25 million next financial year.

“We will also be continuing with a programme of insulation works to increase the energy efficiency of our houses to try to offset some of the huge increases in heating costs being experienced by our tenants.

“By the end of 2012/13, around 99% of our housing stock will be compliant with the Scottish Housing Quality Standard and our aim is to remain financially prudent in order that we can improve significantly on this standard in the years to come.

“Unfortunately, however, this will mean we will only be building four new homes.

“This is because of the cuts made in the Scottish Government subsidies to Housing Associations.

“With the average subsidy for each new home built for affordable rent being cut from an average of £65,000 to an average of £40,000, the only way we could sustain a new build programme would be to cross-subsidise building new houses by further increasing our rents well above inflation and by cutting back on services and improvements for our existing tenants.

“We have considered these options and rejected them because it is our opinion that our rents are already too high.

“With big cuts in the Housing Benefit help our tenants get from the welfare system looming on the horizon, budgeting for many of our tenants is only going to get tougher and we feel it is our duty to help keep their living costs as we possibly can.”