Monday, 21 April 2014

Rent increase for 2011/12

Posted in: Discussion | Policy forum

03/11/2011 2:56 am

Unsuitable or offensive? Report this discussion

Sort: Newest first | Oldest first

Author

Message

03/11/2011 9:58 am

No.  It's a different government.  In any case "stepping in" would involve unwinding zillions of calculations around how the new self-financing regime is going to work from April next year, so unless they have a rabbit already built into that particular hat, I fear that disappointment awaits.

Unsuitable or offensive? Report this reply

Anonymous

Anonymous

03/11/2011 10:18 am

The average council rent last year was in effect a two-year increase as it was frozen the year before as central government gave money to thaat effect to loacl government.

The September 2011 inflation figure (CPI) was 5.2% and (RPI) was 5.6% an the formula used in ((RPI+0.5%) plus or minus £2))

Governmen policy holds two diametrically competing forces.  The 'we are all in this together' one and the housing policy of increase rents to pay for more new build at the other scale.  So what the overall increase in social housign will be is anyones guess!

In terms of increase last year the HB payments to council tenants increased from £67.86 to £70.99 - a 4.6% increase and for associations from £77.43 to £79.67 (2.89%) and all social tenants from £73.04 to £75.85 - a 3.84% increase using official HB figures from April 2010 to 2011

So while some council tenants may have had a 6 or 7% rise the average figur is considerably less

Unsuitable or offensive? Report this reply

03/11/2011 11:48 am

My landlord would be screwed if they cut housing benefit, currently they are loaded, the state pays in full and on time, without fail.

He doesn't have to work for a living, and for him to make a living, neither do I.

Unsuitable or offensive? Report this reply

F451

F451

Location: Europe
Posts: 182

03/11/2011 3:28 pm

Potentially, the biggest rent increases will be in the conversions to 'Affordable Rent' from barely affordable social rent to totally unaffordable 80% Market Rent.

If these are included in the rent increase figure it is likely to be even higher than the percentage increase in executive pay, or the percentage increase in utility profits, or the increase in rail fares.

Unsuitable or offensive? Report this reply

Rick Campbell

Rick Campbell

Location: Macclesfield CHESHIRE
Posts: 424

03/11/2011 6:15 pm

A three bed PRP house is currently around £93 a week (48 week year, semi-detached, small garden at front and darned big one at back). Terraced P[RP house round the corner, small garden at front and back -- AR at £125 (48 weeks),

Private rent close to the first property, terraced, no gardens -- £650 every 4 weeks.

Just saying.

Unsuitable or offensive? Report this reply

To whom it may concern

To whom it may concern

Location: Home Counties
Posts: 32

03/11/2011 7:48 pm

I can hear some saying that the first property must be heavily subsidised by £130pw - but the I know some people are really, unintentionally, ignorant.

Perhaps the questioner should draw from Rick's example what rents will be once 'Affordable' rents take over from Social housing.

Unsuitable or offensive? Report this reply

Sancho

Sancho

Posts: 226

03/11/2011 10:29 pm

Derren, putting all the bedwetting to one side for a moment, the most rent will increase by is RPI + 0.5% + £2.  All of this depends on where your rent is in relation to 'target rent'.  The increase may be less, it won't be more.  Ignore the excitement about 'affordable' rent, it doesn't apply to existing tenants.

Unsuitable or offensive? Report this reply

Matt Murdock

Matt Murdock

Posts: 108

04/11/2011 8:42 am

In my borough in London they're talking about 8.1% in total

Unsuitable or offensive? Report this reply

Joe Halewood

Joe Halewood

Posts: 247

04/11/2011 10:09 am

Rick - what you were just saying I will comment on:

You said above "

A three bed PRP house is currently around £93 a week (48 week year, semi-detached, small garden at front and darned big one at back). Terraced P[RP house round the corner, small garden at front and back -- AR at £125 (48 weeks), Private rent close to the first property, terraced, no gardens -- £650 every 4 weeks.

Just saying."

£93pw on a 48 week cycle is £85.85 on a 52 week cycle and this is needed for comparison.

The £650 every 4 weeks for the smaller private property is £162.50pw or if its a monthly figure £150.01pw.

So if the private rent is £150.01 pw its 74% more than the social home and all will be paid by LHA which is currently £160.38 in CE (Macc) for a 3 bed property.

If its £162.50pw then its an 87% increase of which nearly all (98.7%) will be covered by LHA

Unsuitable or offensive? Report this reply

F451

F451

Location: Europe
Posts: 182

04/11/2011 10:57 am

Sancho - are you trying to deny the Government's drive to conversions.

Each bid for HCA grant has been required how many conversions of existing stock to 'Affordable' rent are involved, and bids without conversions may be less favourably recieved.

The expectation is for the majority of relets to be converted.

There will be no new social housing built, other than in exceptional circumstances and even then with the expectation of early conversion.

Yes, so long as a tenant sits tight, does not exchange, or sign a new tenancy agreement, they are safe, but that does not prevent the final removal of social housing by the bleeding drip of tenure conversion to finish what Right-to-buy began.

So not excitement at all but real design - and as for effects on rents, they will be considerably higher, as will averages as a result, so target rents will have to increase effecting what remaining social tenants are left by then as they will be the ones faced with the further rent hikes.

Unsuitable or offensive? Report this reply

Sancho

Sancho

Posts: 226

04/11/2011 11:27 am

f451, no, I'm not denying the possibility of conversions.  I am just trying to keep things clear.  There's still an unfortunate rumour out there that existing tenants on existing tenancies will somehow need to pay 'affordable' rents, which isn't the case.  In the context of a thread regarding rent increases on an existing tenancy, I was merely making the point that 'affordable' rent is irrelevant. 

I'm not convinced, by the way, that 'affordable' rents will be substantially higher than target rents in the majority of the country.  It's an issue in London and other high value areas, but not so much in most places.  The bigger debate is around security of tenure.

Unsuitable or offensive? Report this reply

F451

F451

Location: Europe
Posts: 182

04/11/2011 11:57 am

If you read the proposals Sancho you will see that the guidance is to maximise rent charges wherever in the country they are. Where existing social rents are higher for instance, affordable rent products will be charged at these levels. Where market rents are higher then affordable rents will be linked to these - it is clearly explained.

If all new rents are therefore aimed as high as possible then the average rent per area will increase. This will have a knock on effect to target rents just via simple mathmetical progression.

Rigging the market to increase rents by all possible means will cause, oddly enough, all rents to rise, so yes, existing tenants do need to take caution from the government's policy. No amount of cotton wool will make the renting future look any better.

Unsuitable or offensive? Report this reply

Anonymous

Anonymous

04/11/2011 1:08 pm

Council housing is subsidised by it's very nature anyway.

Unsuitable or offensive? Report this reply

Joe Halewood

Joe Halewood

Posts: 247

04/11/2011 1:26 pm

Sancho  you say above that- "I'm not convinced, by the way, that 'affordable' rents will be substantially higher than target rents in the majority of the country"

If that holds then the affordable rent regime wont create the extra funds to develop new social housing, which is after all its remit.  Hence if it doesnt then no new developments will materialise and the affordable homes programme will have failed to achieve what it set out to do.  Rents will still have risen and so will cost more to the public purse in housing benefit.

The alternate view is that AR rents will be considerably higher than LHA rates (which as a national average ranges between 54 and 69% depending on what figures are used for gross market rent) and this will impact massively in the public purse bill.

Either way and with all the possibilities between these two points rents will increase and so will the public purse bill of housing benefit.  AR therefore cannot be irrelevant as its least possible influence will still place upward pressure on rent and be realised

Unsuitable or offensive? Report this reply

F451

F451

Location: Europe
Posts: 182

04/11/2011 1:33 pm

Nonny - please detail the nature of that subsidy.

To help:

Development cost - subsidy is also paid for home ownership products, so no 'by nature subsidy there.

Rent - current rent income exceeds government payments to Councils, so no subsidy there

Housing benefit - pound per property more is spent on 'Affordable' RSL housing and even more on Private sector housing than is spent on Council housing, so no 'by nature subsidy there.

So, these three facts aside nonny - your facts are?

Unsuitable or offensive? Report this reply

Sancho

Sancho

Posts: 226

04/11/2011 3:29 pm

F451, I have read the proposals.  I 'live' the proposals every day. 

Joe, what I'm saying is that in some of the lower value towns in the Midlands and the north, the current target rent is already 80% of the market rent so these rents will not increase.  All the money from AR would theoretically be coming out of London but, as I'm sure you know, all the LAs are fighting against it.  The Government aren't having that becuase, as you say, that would render the entire change to AR pointless.

The Government may or may not win that battle.  If they do, as plenty of people have said, this will push people out of London and into 'the regions'.  I suppose, then, there is an argument that the new demand will push up market rents in those areas and mean that the AR exceeds the target rent. 

So, yes, I suppose in a roundabout way, affordable rent will eventually push up people's rent in areas where it is currently at or below target. 

Unsuitable or offensive? Report this reply

F451

F451

Location: Europe
Posts: 182

04/11/2011 3:43 pm

My sympathies to your living the proposals Sancho - at least tommorrow is Saturday, a day of rest for some, and on Sunday we can be traditional and family focused, so long as that's still legal, before returning to lives in paper on Monday.

Meanwhile, at Hatfield Poly for one night only - Shapps and the Superstars singing, 'The only way is up!'

Unsuitable or offensive? Report this reply

Anonymous

Anonymous

04/11/2011 3:43 pm

Of course council housing is subsidised.

The tenants do not pay the market rent.

Unsuitable or offensive? Report this reply

F451

F451

Location: Europe
Posts: 182

04/11/2011 3:56 pm

This could go on for a while - so nonny, does a market landlord make a profit or provide the home at cost, and if not at cost then do you understand why the market rent is not the benchmark, but the social rent is as that is at cost.

I really thought we'd got over this, but then another uneducated poster pops up and we go through all this again - can IH provide a glossary of terms we can point such people to rather than run around in circles.

Unsuitable or offensive? Report this reply

Derren Cooper

Derren Cooper

Posts: 56

04/11/2011 4:04 pm

Sorry I was a away for a couple of days, hence my late reply, but thanks for all the answers.

I wasn't looking at affordable housing, or assured tenancies, I was looking at the secured tenancies of council housing.

As mentioned, the basic formula is RPI+0.5%+£2, but this is only part of the formula, and depending on average rents it can work out much higher for individual properties.  Having spoken to contacts in three different councils I'm aware of 6.4%, 7.9% and 8.5% in their initial assessment, and someone mentions above another which has assessed theirs at 8.1%.

Last year was not doubled to make up for the previous year, it was also based on a fiarly high RPI, and it happens the previous year had a negative RPI.  The year before that the average increase was looking like going to be 6.2%, with some councils facing higher increases, but the Government stepped in at the last minute (literally 4 weeks to the day prior to the increase) and announced they will compensate LAs only if they bring their nicreases down to 3.1%.  Social landlords missed out on this com,pensations and faced a public flack for having increases which were double what the cuoncils were charging, and the Government ended up paying out millions to compensate councils for their losses.

Unsuitable or offensive? Report this reply

View results 10 per page | 20 per page | 50 per page |

Rate this topic (5 average user rating)

  • 1 star out of 5
  • 2 stars out of 5
  • 3 stars out of 5
  • 4 stars out of 5
  • 5 stars out of 5

You must be signed in to rate.

Post a Reply

You must sign in to rate this topic or make a post

sign in register

Why not register?

Registration allows you to sign up for newsletters, comment on articles, add posts in the forums, quiz our panel of experts, and save articles and jobs in the My IH section.

Register now

Newsletter Sign-up

More Newsletters

Most active members

Most recent posts

  • From Mia Woody, 07/04/2014 2:19 pm in Discussion forums re housing especially social housing

    rollonfriday.co.uk

  • From Mr Webb, 02/10/2013 4:32 pm in are housing benefit under occupancy rules a threat to vulnerable people?

    The vulnerable do appear to have been crucified by the welfare reforms. No doubt though the policy makers will claim it was not their fault and find some other group to blame it on.

  • posted Anonymously, 15/09/2013 9:07 pm in HCA Framework Document

    i know of a social rent property which was vacant one day, new tennant ( via nomination from homeless) informed 3 days later, no mention of " affordable rent" in offer letter. Rent has increased by over 300.00 per month.  Now that certainly is not Affordable..

  • From raymond hunter, 13/08/2013 7:51 pm in mutual exchange refusal

    had alot of questions but you guys got all the answers thanks.

  • From tony mcq, 06/07/2013 3:45 pm in L&Q Structural problems floor shakes when neighbours walk about

    PLEASE  LET  ME  KNOW  IF  YOU  WANT  TO  SEE  ME  OR  CONTACT  ME-----ABOUT   YOUR  HOUSING  DISTURBANCE--AND  STRUC TUAL   PROBLEMSS  IM  HAVING  SAME  PROBLEMS---WITH   L Q---IS  MY LANDLORD  TOO------TONY----

  • From Jason Matthews, 25/05/2013 1:11 pm in Bedroom tax and lack of smaller properties to move into

    thanks Anna - just what I needed

  • From DaftAida, 26/09/2012 9:25 pm in HOUSING ASSOCIATION TENANT FAILURE

    Oh, and just a couple of other points; don't bother explaining to those who are obviously clueless. Unless they've been in an extraordinary situation they can't possibly understand - let them remain in ignorance. Cut them off and out as being too offensive to bother with.

  • From alan brunwin children's author, 03/08/2012 4:13 pm in Yobs with Dogs: Another "needs" based allocation outcome

    I live in shelterd housing and its a life of hell. we have a Rottweiler dog housed with two old people in a one bed no garden first floor flat next door to us 5 feet away, and its made our life hell. Kepts us awake night day with them taking the big dog down the staircase banging doors. The Housing assosiation are a law unto themselves do what they like to you. Even told us to move out if we don't like it. shame on them.The dog comes first.

  • From Progressive Solutions Required, 18/07/2012 3:27 pm in The rise of the private rented sector

    What saddens me more Joe is that the scale of additional private rented homes has not involved any considerable extent of new building, simply the recycling of former home, and a large number of former social homes at that, into cash cows and multiple occupation rabbit hutches.

  • From Rue, 29/06/2012 3:24 pm in the way of shared ownership

    Many thanks for that, Sancho. I have indeed investigated most of these. Unfortunately nothing is available at the mo, in the price bracket - smaller share say 25 -30%. And those that have been around longest are now on the open market, and vendors seem reluctant to continue the conversation with the housing association from whom they bought the original share. One in particular, I fell in love with, and have been watching its lack of movement on rightmove at f. m. v.