Rent Structure Review North Lanarkshire Federation Open Meeting

Rent Structure Review North Lanarkshire Federation Open Meeting 17 th February 2018

Overview • What is a rent structure • Why change how rents are set & what should a restructure should achieve • Areas for consideration • Example of other structures • Timetable 2

What is a rent structure? • A Rent Structure or Model is a mechanism that allows North Lanarkshire Council to set rents for the properties it owns and manages. 3

Why restructure how the rents are set? • To ensure fairness, transparency and consistency • To make sure the structure is open and easy to understand manage • To address any anomalies or inconsistencies differents for same property type and size • To make sure the difference in rent between properties of different sizes and type are fair 4

What should a rent restructure achieve? • Ensure sufficient income to provide services and meet Council obligations • • Managing the stock Delivering repairs & maintenance service Meeting and maintaining SHQS & EESSH Investment & new build programmes Fulfilling requirements of the Business Plan Repaying the cost of any borrowing Long term financial viability • Ensure affordability for tenants • Consider comparability with other landlords 5

A rent restructure is not about…. • The annual rent increase • Increasing the overall amount of money NLC collects in rent • Making everyone pay more 6

Why might there be inconsistencies in how rents are charged? • Rents increased when improvements made? • Type of heating considered? • Type of windows considered? 7

NLC Properties …. • • Total Number of properties Bed sit / 0 bed 2 apt / 1 bed 3 apt / 2 bed 4 apt / 3 bed 5 apt / 4 bed 6 apt / 5 bed 7 apt / 6 bed • 8 apt / 7 bed 36, 512 317 6, 592 18, 796 9, 761 1, 016 27 0 3 8

Annual rent – 2016/17 £ 110, 613, 480 9

Current Rent Structure • A base rate dependant on the property size (1, 2, 3, bedroom etc) 10

Current property types – points and values 11

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NLC – low differentials 13

House Types & Sizes • What do you think? 14

Key Principles • Easily understood and straightforward to maintain • Same rent for same house type and size across the authority • Should be fair, equitable, consistently applied and supported by tenants • Should ensure sufficient income continues to be generated to the Housing Revenue Account (HRA) • Implemented in phases to protect existing tenants and ensure affordability 15

What could change? • Some rents could go down and some rents could go up…. • Difference in rent for properties of different sizes could increase… • Size and Type only taken into account when setting rent… • Lowest level of points assigned to block of flats, highest points assigned to detached houses…should this change or stay the same? 16

Sample base differentials 17

Sample points differentials 18

Sample new rent matrix 19

Sample of Rent Changes 21

Implementation of a new structure A. Immediate – all increases and decrease applied in full in year 1 B. Phased – based on a set number of years – how many? C. Phased – based on maximum/minimum percentage (in addition to annual rent increase) to be applied – what percentage? D. Phased – based on a maximum/minimum £ value to be applied – what value? 22

Proposed timetable • Consultation with Tenants Federation – 9 th Jan 2018 • Food for Thought Session – 16 th Jan 2018 • Wider consultation with tenants – online, newletter, direct mailing, focus groups – March to May • Feedback results and confirm new structure to be adopted • Report to committee – 5 th September 2018 • Rent increase notifications – Feb 2019 • New structure implemented – April 2019 • Transition over number of years in line with agreed implementation policy 23

Be a part of the process and keep in touch with how the consultation is progressing by visiting: www. northlanarkshire. gov. uk/rentstructure 24