Friday, 03 July 2015

Three authorities will set rates below official guidelines, survey reveals

Councils to increase rents by 5.1 per cent on average

Just three of the 25 top stock-owning councils in England will increase rents below government-set guidelines for 2013/14.

The vast majority of council tenants will face rent hikes of between 4.5 per cent and 6 per cent.

The average increase will be 5.1 per cent, according to a survey carried out by Inside Housing.

Of those councils with at least 20,000 homes, just Lambeth, Leicester and Nottingham councils have elected not to apply the maximum increase possible.

Communities and Local Government department guidelines recommend that councils put rents up by September’s retail price index level (2.6 per cent) plus 0.5 per cent plus up to £2 a week to meet its target of having housing association and council rents converge by 2016.

However, under council self-financing reforms, local authorities can choose their own rent levels.

Sandwell Council raised rents by 9.6 per cent - more than any other local authority surveyed. The west midlands council has, however, switched from an October increase to April and so has not raised rents for 18 months. Leeds Council’s 5.9 per cent rise was also above the government guidelines after it opted not to impose the maximum increase last year.

Last autumn, the Association of Retained Council Housing warned that authorities not taking advantage of the government formula could risk their ability to fund investment in their housing stock.

Nottingham’s increase of 5.5 per cent is 0.5 per cent lower than the maximum allowed. Dave Liversidge, cabinet member for housing at Nottingham Council, said the move was in line with a business plan that assumed RPI of 2.1 per cent and would cost around £600,000 a year.

Lambeth Council in south London has increased rents by 4.2 per cent, rather than the 4.5 per cent allowed. A council spokesperson said it took the decision ‘to cut the cost of living for our residents’.

Similarly, in Leicester rents increased by just 3.4 per cent instead of the maximum 4.1 per cent.

In numbers: council rent increases in 2013/14

25 councils surveyed by Inside Housing

5.1 per cent average rent increase

3 councils plan to set rents below government guidelines

£600,000 amount Nottingham Council will lose in revenue under its planned 5.5 per cent increase

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