CLG outlines rent rise proposals
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Rents will rise by more than 6 per cent for the next two years under the government’s draft proposals for housing revenue account funding.
The Communities and Local Government department has announced its draft rent increases and subsidy formulas, which will set parameters up until 2011 to ‘provide as much stability as possible’ during the Treasury’s review of council housing finance.
The guidelines for average rent increases will ignore the current high rate of inflation and stick closely to this year’s rate – with a proposed 6.2 per cent rise for 2009/10 and a 6.1 per cent rise the following year.
The CLG also proposes a cap on actual rent rises of 7 per cent, and promises to compensate councils for any expected loss of income if they planned to make additional increases.
But the new formula for HRA subsidies will not be increased at the same rate as rents, leading to criticism from some.
Alan Walter, of pressure group Defend Council Housing, said this meant the ‘robbery’ of tenants had gone up by £100 million.
‘The difference between what tenants pay and the allowance given to local authorities for maintenance and repair has gone up from £1.7 billion to £1.8 billion. It is an absolute scandal,’ Mr Walter said.
A CLG spokeswoman defended the rent rise: ‘The proposals will result in an average rent increase of around £3.95 per week, and for 60 per cent of social tenants this increase will be covered by housing benefit,’ she said.
Councils have until 9 December to give feedback on the draft funding determinations.
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Readers' comments (2)
John Lloyd | 28/01/2009 8:20 pm
I have just been informed that my rent is proposed to increase by 54.5%in April.Given the disproportional amount that the costs of housing associations are awarded by private individuals( in some regions this is in the form of a land tax of 50%) economies should be made internally before passing on costs to unsuspecting tenants many of whom are not in a position to challenge maclevelian treatment from their landlords.
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Kenneth Pritchard | 09/03/2009 7:06 pm
This a copy of a message sent 9th March 2009 to the following people:
Gordon Brown. MP – Prime Minister.
Margaret Beckett. MP – Housing Minister.
Andrew Mitchell. MP – Sutton Coldfield .
I am 60 years old and live alone on a pension which puts me above any benefit threshold. I get no assistance with my rent and/or service charges.
I live in a sheltered housing complex in Sutton Coldfield, West Midlands which is owned and operated by a Housing Association.
I have had notice that my rent is going up on the 1st April 2009 by 9.36%. The overall rise including rent and service charges is for me personally 13.49% which amounts to an extra £48.90 per month increase. As I am sure you understand this increase, together with other increased costs is ruining my quality of life.
The local council rent rises were set at 6.1% in accordance with the formula set out by the Government. ( RPI (Sept 2008) + ½ % + or - £2.00.) I understand that your Government has provided funds to the local authorities to allow them to halve the rise for Council Tenants this year to just over 3% due to the present economic climate. Good news for Council Tenants.
Are you going to do the same for Housing Association Tenants as well ? Most of us are on a reduced or fixed income otherwise we wouldn’t have needed to have been in Social Housing.
It seems that those of us at the lower end of the scale are getting no help from your Government while you continue to pour Billions of Pounds into Banks which got us into this mess ! Send a little our way please ?
Thank you for listening
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