How we Spend Every £1 of your Rent Money

Staffing Costs

This includes salary costs plus payments that we have to make as an employer. These include Employer’s National Insurance contributions and Employer contributions to staff pensions. Staffing costs also includes miscellaneous items like advertising costs for recruitment and staff business travel costs, and allowances for our first aiders and fire wardens.

Office Overheads

Includes all the costs that are necessary for the offices to function effectively. This includes things like heat and light, telephones, IT costs, postage and printing and legal fees. It also includes insurance for our properties. For our 2024 insurance renewal we have experienced a 46% increase in premium due to the current state of the insurance market.

Reactive and Voids Spend

The costs of day to day repairs to properties plus costs associated with bringing properties back to a lettable standard following a period where they have been empty(void).

Cyclical Maintenance 

This includes things that happen on a regular cycle such as external paint work, gutter cleaning, gas boiler and other equipment servicing and common area regular landscaping(gardening) works  as opposed to a repair that occurs on an ad-hoc basis. 

 Planned Maintenance

The costs of upgrading g properties as part of our planned maintenance programme. An example of this is a pre-planned programme to replace kitchens across an area or scheme. This category also includes one-off replacements of things like kitchens, boilers, bathrooms etc. These may not be part of a programme of works but may be found to need replacement because they are no longer fit for purpose or have been damaged beyond repair. Often a one-off replacement is done when a property is empty before allocating to a new tenant.

Services and other Expenditure

Service costs relate to a service that is not included in the standard rental charge and incurs a separate service charge. An example of this is stair cleaning in a block or a caretaker service. Occasionally a tenant has a specific requirement for specialist equipment for which we charge separately and the cost of maintaining and replacing this equipment is included in service costs. Other expenditure is a very small percentage and relates to anything which does not fit naturally into any other category.

Loan Principal

The Association borrows money in order to be able to build new properties. We receive subsidy from the Scottish Government which acts as a deposit but we need to borrow the rest. We then have to repay that borrowing over a period of time. The amount of capital we repay in a year is referred to as the loan principal.

Loan interest

As well as repaying what we have borrowed we also need to pay interest on that borrowing. After a long period of low interest rates these have increased rapidly since the Covid pandemic and are just starting to fall slightly now. Some of our loans are on a fixed rate with the rest on variable interest rates.

Reserves/other Income

The categories above account for more than the total rent receivable in the year.  The balance of spend comes from other income and reserves (approximately 4%)