20
NORTH LANARKSHIRE COUNCIL
REPORT
To: HOUSING COMMITTEE Subject: RENT STRUCTURE REVIEW
From: DIRECTOR OF HOUSING
Date: 1 OCT 1996 Ref: JGT/TR/4
1 Introduction
1.1 The pupose of this report is to review the rent structures which operated within the former District Councils and to recommend a rent structure to be further developed and introduced on an incremental basis within North Lanarkshire Council.
2 Background
2.1 Reference is made to the Housing Finance Policy Review, approved by the Housing Committee at its meeting on 6 December 1995, which acknowledged the need to review rent structures within North Lanarkshire Council.
2.2 The report demonstrated that the different approaches adopted by each of the merging authorities have resulted in significant differences in both the overall average weekly rent level and the average rent for each apartment size.
2.3 The adjustments to the base rent increase on 1 April 1996 in certain parts of the area and for specific sizes of house were initial steps towards bringing average rent levels into line for each apartment size throughout North Lanarkshire. However, a comprehensive review of existing rent structures is required so that Committee may determine the most appropriate basis on which all house rent levels will be set. 1 21
2.4 Table 1 below shows the Average Weekly Rent Levels for 1996/97.
Cumbernauld Monklands Motherwell Strathkelvin Ex - CDC & Kilsyth
Average Weekly € € € € € Rent (52 weeks) 28.99 30.89 28.76 29.55 36.28
BY APT SIZE 1 I 27.25 I 29.41 24.67 28.21 2 I 28.17 I 29.75 26.93 27.85 34.56 3 29.20 30.87 28.39 29.41 36.07 4 29.93 31.17 30.06 30.85 37.33 5 31.41 31.54 30.36 32.93 36.93 6 NIA 32.46 33.71 35.91 38.97 8 NIA NIA 35.69 38.41
Table 1
3 Considerations
3.1 Any rent structure adopted by North Lanarkshire Council should be fair and easily understood.
3.2 The rent structure should take account of apartment size, house type, amenity and degree of modernisatiodimprovement. Indeed all of the merging authorities, with the exception of Monklands, considered these factors. Appendix 1 summarises the main features of each system. Monklands’ rent structure was based on an assessment of rent levels in 1977 which were the subject of flat rate across the board increases until 1 April 1996. As a consequence of this approach, weekly rent differentials are minimal as shown in Table 2 below:
Weekly Differential Between Averaye Rent for 2 & 5 Apartments
Ex- Authoriv Weeklv Differential
Cumbernauld & Kilsyth €3.24 Monklands €1.79 Motherwell €3.43 Strathkelvin f5.08 EX- CDC €2.37
Table 2
3.3 The former Motherwell District Council’s structure had been further refmed by the operation of a “Points Weighting System” which awards points reflecting relative desirability of certain housing attributes. 22
4 Points Weighting System
4.1 A “Points Weighting System” in the context of a rent structure can be defined as a system of determining differential rent levels based on the relative importance of a number of predetermined factors.
4.2 For example, the former Motherwell District system takes account of 3 factors:
a) Property Type - differentiating between detached houses, terraced houses, flats etc.
b) Amenity Grading - differentiating between degree of modernisation, improvement, adaptation.
c) Heating Type - differentiating between the various types of central heating systems installed.
4.3 A points score is then arrived at for each of the above factors within a range of 0 to 4 points, with a score of 0 points equating to the lowest rent level and 4 the highest. Points are applied as detailed at Appendix 2.
4.4 Having established the number of points attributable to each of the 3 factors, a points total is calculated which then becomes the rent category for a particular house. Points totals vary from 0 to 10. The calculation of a points total for a 4 apartment, semi-detached, modernised property with a gas (wet) heating system as illustrated at Appendix 2.
Accordingly, there are 11 different rent levels within each apartment size.
4.5 There are also standard differentials for:-
a) apartment size, (currently approximately E1.42 per week);
b) category (currently 20.60 per week).
4.6 The “Points Weighting System” is considered to reflect a demonstrably fair and equitable system for the setting of rents in North Lanarkshire. It is also flexible and capable of further refinement.
5 Concierge Service
5.1 The Concierge Service within the former Monklands District Council area is an intensive management system providing a 24 hour security, cleaning service in a number of multi storey flats.
5.2 The average estimated cost of providing the service at each location is El 18,000 (excluding loan charges). Including a further 2 Concierge Stations which have recently been commissioned there are the equivalent of 9 Concierge Stations, giving a total of E1,062,000 in running costs (ie. staff and property costs but excluding loan charges).
5.3 The tenants of the multi storey developments enjoying the benefits of the Concierge Service have not had their rents reviewed to reflect the provision and cost of hsamenity.
5.4 By introducing an amenity class for the Concierge Service within the Points Weighting System, a differential could be established between those tenants receiving the service and those tenants not receiving the service. 1 23
6 Cumbernauld Development Corporation Stock
6.1 Table 1 shows the average rents for the housing stock transferred from Cumbernauld Development Corporation to which the Points Weighting System could also be applied.
7 Free Weeks
7.1 All of the merging authorities with the exception of Monklands District Council, operated a 48 week charging cycle with 4 free weeks (2 in December and 2 in July). Monklands District Council operated on a 50 week basis with only 2 free weeks (December).
7.2 It is proposed to take a sample survey of tenants’ views on harmonising to either a 48 or 50 week charging cycle and this will be the subject of a further report to Committee.
8 Implementation of a Points Weighting System
8.1 The implementation of a Points Weighting System for all of North Lanarkshire’s housing stock will result in some tenants gaining and others losing, the exact level of rent increase being dependant upon the type of house occupied and the current rent charged. In general terms higher increases in rents will apply to those with greatest amenity.
8.2 At present the rent account from the former Monklands area is on a separate computer system. Work is currently undenvay to ensure that all rent accounts within North Lanarkshire are on the same system as soon as possible. This change will permit an evaluation of the detailed implications of introducing a points weighting system.
8.3 In devising the rent structure it would be necessary to ensure that individual rent increases are kept to an acceptable level and introduced on a phased basis.
9 Conclusions
9.1 This report outlines a proposed structure for a differential rent system and Committee is asked to approve this approach in principle to allow fuller evaluation of the introduction of such a system and consultation with tenant groups throughout North Lanarkshue Council on this matter. On completing the full evaluation and consultation further reports will be submitted for consideration.
9.2 The adoption in principle of a preferred model rent structure at this point will provide a useful framework within which the Council can decide to apply and/or weight any increase in house rent levels which may be determined for next financial year. Such an approach will ensure that progress continues towards the harmonisation of rent levels and differentials which will be a medium to long term goal and therefore addressed on a phased basis.
10 Recommendations
10.1 It is recommended that:
a) a Points Weishting System as outlined in Section 4 of this report be developed for North Lanarkshue with a fbrther more detailed report submitted to Committee for consideration prior to completion; and
b) a further report on the implications of harmonising free weeks be presented when the results of the sample survey are known. 24
11 Background Information
11.1 Available from Housing Department.
G S Whitefield Director of Housing Appendix 1 Appendix 1 (a) Ex-Cumbernauld & Kilsvth District Council Rent Levels 1996197
No. ofApts. Category Maisonette Terraced S emi-Detached Detached
1 Standard 26.50 26.69 26.79 Gas 27.80 27.99 28.10 Electric 26.93 27.12 27.23 Solid Fuel 27.22 27.4 1 27.52
2 Standard 27.49 27.68 27.76 27.95 Gas 28.79 28.98 29.11 29.25 Electric 27.93 28.11 28.25 28.38 Solid Fuel 28.22 28.40 28.54 28.67
3 Standard 28.51 28.60 28.67 28.81 28.89 Gas 29.81 29.90 29.97 30.10 30.18 Electric 28.94 29.02 29.10 29.24 29.3 1 Solid Fuel 29.23 29.3 1 29.39 29.53 29.60
4 Standard 29.67 29.58 29.69 29.80 Gas 30.81 30.88 30.99 31.10 Electric 29.94 30.01 30.12 30.25 Solid Fuel 30.23 30.30 30.41 30.52
5 Standard 30.64 30.72 30.82 30.91 30.99 Gas 31.85 3 1.93 32.03 32.13 32.20 Electric 3 1.05 31.12 31.22 31.32 31.39 Solid Fuel 3 1.32 3 1.39 3 1.49 3 1.59 31.66 Appendix 1 @)
Ex - Monklands District Council Rent Levels 1996197
Bv TvDe/Size ADt Size Weeklv Rent
Detached 3 30.82
Semi Detached 29.66 30.87 31.19 31.54 32.46
End Terraced 29.80 30.85 31.12 31.49 3 1.30
Mid Terraced 29.80 30.85 31.12 31.49
Sheltered House 2 29.95 3 32.55 4 32.86
4 in a Block 29.53 30.73 31.02 31.49
Block of Flats 29.47 29.75 30.90 3 1.26 31.59
Tower 2 29.89 3 31.15
Maisonette 3 30.99 4 31.24
Bungalow 2 29.64 3 30.84
Paraplegic 2 30.38 3 31.92 4 32.18 28
Appendix 1 (c)
Ex - Molhenvcll District Council Rent Levels 1996/97
CO?TAGES:- C0lTAGES:-
UDETACHED 1 PROPERTY MAIsoNEl-IE SEMI-DETACHED ERRACED MULTI- STOREY 41N A BLOCK 'IFNEhENT TYPE END - TERRACED - I I I
~~ AMENITY HIGHER RENT PARAPLEGIC MODERNISED CLASS HIGHER AMENITY SHELTER REFURF3ISHED + SUPPLEMENT BUILT AFTER 1973 I-
GAS (WET) ELEC. WARM UNDElUTOOR CENTRAL I TENANT HEATING SYSTEM INSTALLED SYSTEM
RENT SCHEDULE APRIL 1996 WEEKLY (52 WEEKSJ
APARTMENT SIZE
1 2 3 4 5 6 7 8 00 €25.35 €26.77 €28.18 €29.60 €31.02 €32.45 €0.00 €33.86 01 €25.95 €27.37 €28.78 €30.20 €31.62 €33.05 fO.OO €34.46 02 €26.55 €27.97 €29.35 €30.80 €32.22 €33.65 €0.00 €35.06' 03 €27.15 €28.57 €29.98 €3 1.40 €32.82 E34.25 €0.00 €35.66 04 €27.75 €29.17 €30.58 €32.00 €33.42 €34.85 €0.00 €36.26 05 €28.35 E29.77 €3 1.18 E32.60 €34.02 €35.45 EO.00 €36.86 06 E28.95 €30.37 €31.78 €33.20 €34.62 €36.05 €0.00 f37.46 07 €29.55 €30.97 €32.38 €33.80 €35.22 €36.65 €0.00 f78.06 08 €30.15 E3 1.59 €32.98 f34.40 €35.82 E37.25 €0.00 €38.66 09 E30.75 €32.17 €33.58 €35.00 €36.42 €37.85 EO.00 €39.26 10 €31.35 €32.77 €34.18 €35.60 €37.02 €38.45 €0.00 €39.86
* HIGHER RENTED, HIGHER AMENITY HOUSES, ADD A FURTHER €2.17 PER WEEK Appendix 1 (d)
Ex - Strathkelvin District Council Rent Levels 1996/97
House TvDe Weekly Rent
End Terrace 29.46 31.05 32.60 34.21 36.83 35.91
Mid Terrace 28.96 30.51 32.10 33.67 35.26
Semi Detached 32.10 33.67 35.26 36.83
4 in Block 29.98 31.57 33.16 34.74
Maisonette-groundmiddle 3 31.57 4 33.16
Maisonette-top 3 30.51 4 33.16
Cottage-end 3 32.60 4 33.67
Cottage-middle 3 32.10 4 33.67
Cottage-semi detached 4 35.26 Appendix 2
OUTLINE OF POINTS WEIGHTING SYSTEM
4 3 2 1 0 CO?TAGES:- COTTAGES:- FLATS:- FLATS:- FLATS:-
PROPERTY TENEMENT I $mi-mTAcm] MID- TERRACED MULTI- STOREY 4M A BLOCK MAISONETTE TYPE END - TERRACED DETACHED I I I I AMENITY CLASS HIGHER N3NT PARAPLEGIC HIGHER AMENITY SHELTER + SUPPLEMENT REFURBISHED ** BUILT AFTER 1973
GAS WARM AIR COAL ELEC. WARM AIR UNDERFLOOR CENTRAL STORAGE GRANT AID TENANT HEATING HEATERS SYSTEM INSTALLED SYSTEM
* PRE WAR HOUSING STOCK MODERNISATION PROGRAMME * * INCLUDING RE-ROOFING. EXTERNAL CLADDING AND ENVIRONMENTAL IMPROVEMENTS
RENT SCHEDULE APRIL 1996 WEEKLY (52 WEEKS)
APARTMENT SIZE
POINTS 1 2 3 4 5 6 7 8 00 €23.40 €24.71 €26.01 €27.32 €28.63 f29.95 fO.00 231.26 01 f23.95 f25.26 €26.57 €27.88 f29.19 f30.51 fO.00 f31.81 02 f24.5 1 f25.82 €27.12 E28.43 229.74 €3 1.06 €0.00 232.36 03 €25.06 226.37 €27.67 f28.98 f30.30 €3 1.62 fO.00 f32.92 04 f25.62 226.93 €28.23 €29.54 E30.85 f32.17 50.00 f33.47 05 f26.17 E27.48 f28.78 €30.09 E3 1.40 f32.72 €0.00 234.02 06 €26.72 f28.03 €29.34 €30.65 €3 1.96 €33.28 €0.00 f34.58 07 f27.28 f28.59 €29.89 E3 1.20 f32.51 f33.83 €0.00 235.13 €33.06 €34.38 50.00 235.69 08 €27.83 229.14 f30.44 pq...... 09 €28.38 f29.70 €3 1.OO €32.31 f33.62 234.94 fO.OO f36.24 10 €28.94 230.25 €3 1.55 €32.86 f34.17 €35.49 €0.00 236.79 * HIGHER RENTED, HIGHER AMENITY HOUSES, ADD A FURTHER f2.17 PER WEEK
4 apartment Semi detached, modernised property with Gas Heating System 4 points for Semi-detached, 2 for modernised, 2 for Gas (wet) system. This gives a point scoring of 4 (apt size) 08 (points) equating to a weekly rent of f31.75