Issue - meetings

Report of Assistant Director - Growth and Economy

Purpose of report

To recommend adoption of a new procedure for annual rent increases for affordable rent and shared ownership properties in the Council’s housing assets portfolio (consisting of both affordable rental and shared ownership) . The report sets out the way in which increases are determined by Central Government and the measures taken by the Council to ensure the proposed increase maintains affordability for tenants and owners.

Recommendations

The meeting is recommended: 

1.1         To agree that rent increases are applied annually to both affordable rental and shared ownership properties in line with government guidance considering the need to ensure that rents remain affordable, using the two measures of Local Housing Allowance and comparable rental data for the District.

1.2         To delegate responsibility to the Corporate Director – Environment and Place, in consultation with the relevant Portfolio Holder, to produce and subsequently implement an annual rent increase procedure which will commence 1 April 2022.

Resolved

(1)           That it be agreed that rent increases are applied annually to both affordable rental and shared ownership properties in line with government guidance considering the need to ensure that rents remain affordable, using the two measures of Local Housing Allowance and comparable rental data for the District.

(2)           That responsibility be delegated to the Corporate Director – Environment and Place, in consultation with the relevant Portfolio Holder, to produce and subsequently implement an annual rent increase procedure which will commence 1 April 2022.

The Assistant Director - Growth and Economy submitted a report which recommended adoption of a new procedure for annual rent increases for affordable rent and shared ownership properties in the Council’s housing assets portfolio (consisting of both affordable rental and shared ownership) . The report sets out the way in which increases are determined by Central Government and the measures taken by the Council to ensure the proposed increase maintains affordability for tenants and owners.

At the discretion of the Chairman, the Leader of the Labour Group, Councillor Woodcock, addressed Executive.

In response to Councillor Woodcock’s request that a decision on this matter be deferred pending consideration of the impact on the council’s finances, the Chairman explained that extensive consideration had been given and stressed that the council would be operating within set parameters, namely in line with government guidance and comparable measures. The benefit of the proposed new procedure was that small annual increases were preferable to having to contemplate a single large increase in the future.

Resolved

(1)          That it be agreed that rent increases are applied annually to both affordable rental and shared ownership properties in line with government guidance considering the need to ensure that rents remain affordable, using the two measures of Local Housing Allowance and comparable rental data for the District.

(2)          That responsibility be delegated to the Corporate Director – Environment and Place, in consultation with the relevant Portfolio Holder, to produce and subsequently implement an annual rent increase procedure which will commence 1 April 2022.

Reasons

All rent increases applied follow Government guidance, currently The Rent Standard. This specifies the increase that social landlords can apply each year. Within the Council these potential increases are measured against two affordability markers, the Local Housing Allowance and an internal analysis of comparable local rents for both social housing providers and the private rented sector to ensure the increased rents remain affordable for residents.

The annual increase adds to the asset value of the portfolio as well as increasing revenue income which is required for capital loan payments; rentals; conversions/improvements; housing/leasehold management and repairs.

Alternative options

Option One: Annual rent increases are determined without an approved  procedure in place.

Rejected: Having a procedure in place gives clear guidance regarding how increases are determined by the Regulator of Social Housing and the measures in place within the Council to ensure rents remain affordable for the Council’s tenants and shared owners.

Option Two: Do not increase rents on the Council’s Housing Assets.

Rejected: The annual increase will contribute towards increasing the value of the Council’s housing assets portfolio and will also increase the revenue income for the Council which is required for capital loan payments; rentals; conversions/improvements; housing/leasehold management and repairs. These costs are subject to upward cost pressure and if not covered by prudent rent increases will become a revenue pressure on the Council.