Setting Rents

We have spent a great deal of time in recent years making sure that our rents are affordable. Find out more about the work we've done, the questions we are most frequently asked, and the changes we've made.

1. Is Melville aware of the financial pressure tenants are under?

We are and we’re very sympathetic. We’re keeping a close eye on the impact that changes to welfare benefits are having, and particularly the effects of Universal Credit.

We know that wages are not keeping up with inflation, and that many benefits remain frozen which will have an impact on affordability.

We therefore try and keep our rent increases as low as possible.

2. Why do rents for Melville tenants seem to go up every year?

Unfortunately our costs go up all the time, sometimes by a little, sometimes by much more, therefore, in order to keep delivering the same level of service and necessary home improvements, we need to review our rents every year.

3. How often do you speak to tenants about rents?

We consult tenants every year about rents, and include rent questions in our comprehensive independent tenant satisfaction survey that is carried out once every three years.

We also hold an annual meeting in January with our tenant reps and other tenants interested in discussing the consultation process, setting out our income and expenditure and how rents are set.

Beyond this we always welcome suggestions on how we might improve value for money.

4. Have you ever worked out if rents really are affordable?

Yes, we regularly review the affordability of our rents using a number of methods.

In 2018 the Melville Board sat down to decide just how affordable current rents were. They decided that in the example of someone working full time, and on the national living wage, a one bed Melville flat was just affordable but left little spare income for emergencies or savings. 

On an ongoing basis we also collect as many income details as we can before signing tenants up to a Melville property. We also take the opportunity to discuss personal budgeting and affordability. In the two years up to November 2018 we collected income details for 269 new tenants. Of these we estimated that only 42 would be able to afford their rent without help from partial or full housing benefit or Universal Credit housing cost.

We have also used the SFHA rent affordability tool to determine the affordability of our average weekly rents. The tool suggested that our rents are generally affordable for those earning a moderate wage however there is a significant income shortfall for those tenants depending on Universal Credit for income.

5. What has Melville done to make rents more affordable?

Melville started looking more closely at value for money in 2012, introducing a value for money (VFM) framework designed to improve service at little or no additional cost, and ensuring affordable rents. As part of this exercise Melville took a closer look at rents, which we knew were above the average for Scottish RSLs. In order to deliver better value for money, Melville began planning for annual rent increases at a maximum of RPI (Retail Price Index inflation) only, and to harmonise our rents, providing a fairer and more open rent structure than the one inherited from Scottish Homes. In consultation with tenants, the new rent structure was introduced in April 2014 based on size, type (flat or house), age of property and demand, with demand split into lower and higher demand areas (with specific locations set out in the rent policy).

6. How do Melville rents compare to others such as the council?

Melville’s rents now sit slightly below the average for Scottish RSLs and we continue to offer rents which are significantly below the market rate for Midlothian. We do however remain significantly more expensive than Midlothian Council, although Council rents are currently increasing at a much higher rate than Melville’s are.

7. What has Melville done to cut costs?

Each year Melville formally considers and consults on the affordability of its rents and each year the Board receives a report on progress made against the VFM framework. Recent notable successes include: 

  • Improved rent affordability and lower annual rent increases.
  • Reducing management costs by £400,000 per annum from 2014 thanks to a reduction in senior staff posts.
  • Achieving significant savings since appointing new repairs and gas contractors, switching insurance provider, and keeping a close eye on all our contracts to ensure they deliver good value for money.

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