How we spent tenants' rent - Potential Questions

Staffing

1.) How many staff does Angus Housing Association employ?  

AHA currently has 55 staff, roughly evenly split between our Dundee and Angus offices. Senior staff members work between both offices.

Office Overheads

2) What are legal fees costs

Legal fees- court cases such as eviction.  Contract disputes, reviewing contract documentation, Conveyancing costs when we purchase land for new developments.

3.) Why do we pay insurance?

We pay for various categories of insurance. Property insurance covers damage to our houses and offices caused by fire, flood, leaks etc. This insurance is a condition of any borrowing. We must must insure our properties so that leaders interests are protected. We also hold public liability insurance, Employer’s liability insurance and Cyber insurance.

4.) Why is it a 46% increase in premiums?

Current insurance market factors. Same for all housing Associations at the moment. Insurance companies have been increasing rates significantly following a long period of competitive rates. There are also fewer insurance companies willing to cover Housing Association properties which has also pushed the cost up. AHA uses an insurance broker to secure the best deals possible.

Reactive and Voids Spend

5.) What is a reactive void, and voids spend? What does this mean?

Reactive is day to day repairs e.g. leaking tap, blocked toilet etc. Voids spend is the cost of getting a property ready for the next tenant after someone has left. Some essential checks e.g. electrical check and any repairs required. *next session voids and lettable standards.

6.) What is a lettable standard? – check AHA lettable standards – 14th November and any follow up questions

“The aim of a lettable standard is to ensure the property is clean and habitable and complies with all relevant health and safety regulations and other relevant legislation to meet the needs of the tenant”

Minimum standard for all AHA properties are:

· Wind and watertight

· Safe and Secure

· Clean

· Both property and grounds are in a maintainable condition for a tenant

· All facilities and appliances are fully operational

Standard that a property must be at before we are willing to let it. – probably a question for housing management/ maintenance if you want details of AHA’s standard.

7.) Why is a property empty when so many people are needing a house?

Sometimes a property takes some time to repair if it needs a lot of work doing to it. AHA is very good at turning these properties around and getting new people into them but sometimes delays are unavoidable.

Loan Principle 

8. Who do we borrow money from?

In general banks and building societies.

9.) What is a subsidy and how much is this?

Subsidy is the grant that the Scottish Govt gives us towards the cost of new homes. Amount depends on the size of the property and there are a lot of factors that are considered to arrive at the grant total. Currently approximately £90K per property- less than half of the cost.

10.) Do we have to pay interest back?

Yes, we have to pay interest on our loans. Loan interest in 2023-24 was £2m.

11.) What is capital that we repay?

As well as paying interest on the loans we also have to pay back the original sum we borrowed.

Loan Interest 

12.) How many loans do we have?

We have three main lenders at present.

· Royal Bank of Scotland

· Nationwide Building Society

· Allia C&C who administer the Scottish charitable bond programme.

We have 7 individual loans in total.

13.) Why are there different interest rates?

Each lender makes its own decision on how much to charge for borrowing. Interest charges are how they make their money. As a financially strong organisation we have benefitted from favourable rates of interest. We always go out to tender when we need to borrow money to make sure we get the best deal we can at the time.

14.) Why have they risen?

Interest rates were artificially low for a long period following the financial crisis in 2008.Then along came Covid and rates were cut even further. Inflation then rose quickly getting to 11% and one way of reducing inflation is to increase interest rates(idea behind that is that if interest rates are higher people have less disposable income to spend and costs will stop rising as fast.) so interest rates rose quickly over the last few years and are only now beginning to fall back, but not very quickly.

15.) What are the other income and reserves?

Other income includes income other than rental income.

Reserves are the total amount of surpluses that AHA has built up since it started in 1970.

Important to realise that reserves are not cash. Most of the reserves are tied up in the bricks and mortar of the properties. The statement of financial position shows how much cash the Association has in the assets section.

Other income includes things like factoring income from owner occupiers. We provide a factoring service in areas where there are owner occupiers in the same area as we have houses.

Also sometimes get revenue grants from various places for specific purposes. We get grants for disabled adaptations to properties where a tenant needs something to assist them. Common examples are level access showers instead of baths, and grabrails.

Recently we got a grant to employ an energy advisor for a year. At the end of that year we decided that we wanted to retain the post so the postholder became a permanent staff member