07:33 Wednesday 2nd March 2011
Peterborough Breakfast Show BBC Radio Cambridgeshire
ANDY GALL: Peterborough’s largest housing association is set to increase rents by just over 5%. On average, that’s around £4.50 a week extra from April, increasing the average rent to £76. The increase is worked out by a Government formula. Mick Leggett is from Cross Keys Homes and joins us now. Good morning Mick.
MICK LEGGETT: Good morning.
ANDY GALL: So this is a big increase, but do you have any choices, or are you literally governed by a Government formula?
MICK LEGGETT: We are. Yes. About ten years or so ago the Government decided that if you looked at council rents, and housing association rents and social rents generally, there was no comparison. Some were much lower and some were much higher. They said by 2012 these should all be equalised. So basically the formula is quite simple, although paying for the extra rent is obviously the tricky bit. But in September every year we look at RPI, and then it’s RPI plus a half. So RPI in September was 4.6%. The year before it was actually about 0%, so we didn’t put our rents up. But this year as you say we’ve got that rise in rents that concerns us.
ANDY GALL: You’re dictated to by that then. But what’s the impact upon residents? It can’t be good.
MICK LEGGETT: 70% of our tenants fortunately are on housing benefit, so they won’t actually notice any difference, because that will just go up automatically in line with those increases. But there’s obviously 30% who are going to have to find the extra money, which obviously when you were talking earlier about petrol prices and other prices are all going up, it’s very difficult for people.
ANDY GALL: But do you think 5% increase is fair in this climate though?
MICK LEGGETT: I think it’s very difficult, because everything is going up by around those sorts of measurements. RPI has gone up since September, so it’s even higher. I think probably really the view as to whether it’s good value for money would come from our tenants rather than from me. They’re the ones who would think ..
ANDY GALL: But what is the view from tenants though? Have you heard anything from them yet?
MICK LEGGETT: Well the letter for this rent increase has only gone out today. But we do an annual survey every year about satisfaction, and all those sorts of things, and we’ve just had the results from the ones we did around Christmas-time, and 89% of our tenants do say that the rents are good value for money. So I think they are aware that over the last five six years we’ve improved kitchens, we’ve given them new heating systems, we’ve done lots of improvements on the estates. And I think that just the way we deliver our service is much better than it used to be in the old days.
ANDY GALL: This isn’t the only thing that’s going up. If you live in Cross Keys Homes, service charges are also going up. By how much and why?
MICK LEGGETT: That really depends. Service charges apply to mostly sheltered housing or to flats. If you’re in a house you generally haven’t got a service charge. So it’s to pay for the heating and lighting of the communal areas, or if you’re in a sheltered scheme, the scheme manager, and those sorts of things. We’ve got increases in there because what’s happened, when we transferred and took over the Council stock, we made a promise that some service charges and rents would only go up in line with the Government requirements. So our service charges over the time has only gone up by about 27%. But the actual costs as you know of heating and electricity has more than doubled in that time. So what we have to do now is do some sort of a catch-up. Now we don’t want to hit everybody at once with those increases, so we’re going to phase them over five years. But it does mean that people are going to be paying about £1.20 or £1.40 extra a week on their service charges, roughly.
ANDY GALL: You’re dictated to by inflation.
MICK LEGGETT: Yes. And the costs. We can’t charge any more, so we can’t make a profit on that, not that we do anyway. We’re a charitable organisation. But we can only recover the money it’s cost us. So what we’ve been doing over the last six years is not recovering the amount it’s cost us. So there’s a bit of a catch-up, not in terms of the money we’ve lost in the past, but actually what the cost of the service is going forward.
ANDY GALL: But with these increases that you’ve mentioned that are coming on-line, for the 30% or so of people that have to find that money independently, is there going to be extra help for them?
MICK LEGGETT: Well not financial help, except obviously there’s benefits and those sorts of things. But what we’re wanting to do is support people. So we’ve got a couple of telephone lines that people can ring if they want to enquire. We’ve got two really. We’ve tried to make it simple. If you’ve got a query about your rent increase, so whether you think it’s right or wrong, we’ve got a number, if I can give you that, it’s Peterborough 385028. But if you want to get some advice about whether you should get more benefits, or can get any help, or you can manage your money better in some way or other, there’s another number which is a Freephone number 0800 0932258. If you’re not sure, ring the second one and we’ll deal with you.
ANDY GALL: Great. Mick Leggett from Cross Keys Homes, thanks for joining us this morning.