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 a large number of benefits, including JSA and ESA, will not be increased in 2017/18 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.

Tenants have always rated us very highly on value for money, particularly in comparison to other housing associations, however up until 2015/16 feedback suggested our rents were becoming less affordable every year. We are pleased to note that this trend reversed in 2016/17 when satisfaction with value for money stood at 76% (compared to 62% in 2012/13).

4. What did tenants tell you this year?

We received 65 replies to this years’ survey, with:

  • 85% saying they think Melville’s current rent and service charges are affordable
  • 69% in favour of a 2% increase for 2017/18
  • 8% supporting a 2.5% increase
  • 3% saying they would support a 3% increase
  • 20% against any of the three options

As a result of the feedback, Melville’s Board made the decision to increase rents by 2% (roughly £1.60 a week) from 1 April 2017.

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

Yes we have. In 2016 senior Melville staff and Board members sat down to decide just how affordable current rents were. They did this by looking at a hypothetical single tenant, working a 35 hour week on the living wage (£7.20 an hour) and paying £295.97 per month for a one bed Melville flat. We made fair assumptions about living costs and found that this tenant would have very little left after rent, food, heating and travel (by bus), for ‘non-essential’ things like socialising, and emergencies. On this basis the group concluded that, for people on the living wage, the rent was just affordable, but no more. With this recent review in mind, Melville continues to fine tune its VFM strategy, building on an initial solid base, with an approach that will benefit all Melville tenants.

6. 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).

7. 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.

8. 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. Last year management costs accounted for 27p in every £1 spent by Melville. This is a significant fall from 33p in every £1 spent the previous year.
  • 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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