Consultation A - Spreading the rent collection weeks for tenants
Your observation and our replies - Consultation A.pdf
All social housing landlords calculate rents and service charges on an annual basis and then collect it as a weekly ‘gross rent’ amount. It has long been the practice in Milton Keynes that we have not been charging tenants rent during the two weeks over the Christmas and New Year period. This is not policy or part of your tenancy agreement. Annually, you still pay the same amount, but your gross rent is divided by 50 weeks rather than 52 weeks, making your weekly amount slightly higher.
For example, if you pay £4,966 annually in gross rent, your weekly charge is spread over 50 weeks and is £99.32. If there were no ‘rent free weeks’ and it was spread over 52 weeks, it would be £95.50 each week.
We are proposing to remove the two‐week rent‐free period and collect the annual rent over 52 weeks from April 2023. We think this is a small way to reduce the amount you pay weekly, which may be useful as the costs of living rise. It will also streamline some of our admin processes, such as submitting returns to the government, which will save us time and costs.
Consultation B - Reviewing service charges
Your observation and our replies - Consultation B.pdf
The Government introduced a national policy in 2000 which changed the way that councils and housing associations set rent for their properties. This enabled landlords to separate out charges for services from rent.
Milton Keynes City Council decided not to separate out charges at this time and continued to charge all tenants through their rent for services.
The cost of energy, materials, and labour to repair and build homes has since increased at a much greater rate than we are allowed by Government to increase your rent. This means we are covering the shortfall instead of using that money to fund repairs, improvements and to build new homes for local people.
We now propose to separate service charges from rent.
In February, we sent you a rent increase letter which contained more information about this review, and we will shortly update our website with more details including how you can help us make decisions for the future. If we hold a mobile phone number for you, we will text you whenever we add things to our website, so you can check out the information if you are interested.
Consultation C - The timeframe for charging leaseholders for services
Your observation and our replies - Consultation C.pdf
As a landlord we have two types of leaseholders: outright leaseholders who own the leasehold of their home and we own the freehold, and shared owners who own part of the equity of their homes.
This part of the consultation only affects our 1,650 outright leaseholders.
Service charges in most cases are payable for an accounting year which runs from 1 April to 31 March. Typically, landlords will estimate what they are likely to pay for things like maintenance around February/March and leaseholders pay regular service charges based on that estimate. Once an accounting year is complete, the landlord reviews actual spend, and the leaseholder will be asked to pay the difference if it is higher ‐ or will receive a credit where this is lower.
Milton Keynes City Council does not do this. Instead, we send you one invoice a year which includes the estimate for the current year and the actual costs for the previous year. We are looking to modernise how we charge you, with service charges initially billed based on an estimate, and then revised based on actual spend. This means:
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Soon
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August 2023
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March 2024
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Sept 2024
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March 2025
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Sept 2025
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Leaseholders will receive estimates for 2022/23 and actual statement for 2021/22
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Leaseholders will receive estimates for 2023/24 and actual statement for 2022/23
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Leaseholders will receive estimates for 2024/25*
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Leaseholders will receive actual statement for 2023/24*
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Leaseholders will receive estimates for 2025/26*
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Leaseholders will receive actual statement for 2024/
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* In 2024 we will need to reset the period in which you can pay your service charges. This gives leaseholders a shorter period in which to pay, so we seek views on how any unpaid service charges can be spread to make payments more affordable.
