Parkhead Housing Association launches 2018 rent consultation

Parkhead Housing Association is to recommend a 2.8% rent increase in order to allow the Association to fund its expenditure and maintain a level of reserves for new build projects.

The Board of the Association met just before Christmas and considered a range of options with regard to budget and rent charges for the upcoming year.

The Association said it did so “in the full knowledge of the current financial situation facing many of our tenants and mindful of the financial needs of the business in terms of service delivery”.

To meet the above costs the Board considered four options. To meet the business needs of the Association the Board had previously agreed a minimum rent increase of the Retail Price Index (RPI) level. This would allow the Association to invest, on average over £1 million per annum, in its existing stock and build reserves to fund future new build.

As RPI has consistently ran higher than Consumer Price Index (CPI) the Association last year decided it would be in tenant’s best interests to focus upon CPI rather than RPI as the measure of inflation.

The options considered were;

  1. Increase rents by the Consumer Price Index (CPI) which was 2.8% in October (as opposed to RPI which was 4%). An increase of 2.8% will add £2.07 p/week to the average rent.
  2. Increase rents by CPI plus 0.5% (3.3% in total).
  3. Increase rents by CPI plus 1.0% (3.8% in total).
  4. Increase rents by CPI plus 1.5% (4.3% in total).
  5. While the Board recommended a 2.8% increase to meet expenditure and allow future investment the final decision will take into account views of its tenants.

    The Association is running an online consultation and holding two public meetings to discuss the proposals on January 22.

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