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Housing association revises 20% rent increase following MP and council pressure
A large London housing association has agreed to revise down a planned 20% rent rise for some of its key worker tenants after an MP and a council branded the increase “unaffordable and unreasonable”.
Hyde Group said it will now cap rent hikes for its intermediate market rent tenants in Lambeth on 1 July to 10% for the current year – equating to around an extra £100 a month.
The move follows a letter sent to Hyde earlier this month by Vauxhall MP Florence Eshalomi and Jack Hopkins, leader of Lambeth Council, imploring the 55,000-home landlord to reconsider its intention to hit tenants with a 20% rent rise “in the strongest possible terms”.
In the letter, seen by Inside Housing, Ms Eshalomi, Mr Hopkins and Jennifer Braithwaite, deputy leader with responsibility for housing at Lambeth Council, said they were “extremely concerned” about the “disproportionately high” increase and warned that it could force some low-income key workers to move out of London.
Twenty-five tenants – mostly at 57 Lingham Street – faced the maximum increase, equating to around £200 extra a month, while another 45 across the borough faced increases of between 16% and 20%. An additional 97 tenants were set to pay between 11% and 15% more.
Hyde had originally planned to implement the rent increases in April but deferred for three months because of the coronavirus pandemic, instead applying the standard 2.7% initially.
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Si Wharton, a resident at 57 Lingham Street, said: “The offer of a 10% cap this year is encouraging because it shows a willingness to negotiate.
“But it still represents a very large amount of money, particularly for households on one income – what economies to make to find an extra £1,000 or £1,300 a year?”
Intermediate market rent is set at 80% of market rents and is intended for low and medium-income workers who would otherwise be unable to afford to live near their jobs. Annual increases are capped at 20%.
Hyde said the increase follows a change to its assessment of average local market rent values.
The association will carry out another market rent assessment this year to decide on the increase for 2021.
Peter Denton, chief executive of Hyde, said: “As a charity, Hyde has an obligation to consider the collective as well as the individual and this is an unfortunate situation that puts these two in conflict.
“These homes are intermediate market rent, not social rent, and where leases were knowingly entered into at 80% of local market rent.
“Following an expert market review, many customers received no increase or much lower increases. However, there were a number of customers who had been paying 20% less than they should have for some time.
“To help during the lockdown, we capped all increases at 2.7% for three months.
“In order to allay the impact further, we have also decided to cap any further IMR increase this year to 10%, and will undertake further market rent benchmarking this year that will form the basis of our 2021 rent-setting process.”
He added that the 10% cap will mean Hyde is able to build two fewer social rent homes a year in Lambeth.
Update: at 17.55pm on 26.6.20
More information about the 10% rent increase cap was added to the story
Update: at 12.16pm on 29.6.20
The story was altered following clarification from Hyde that it has agreed to cap the rent increases for this year at 10%
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