Council housing rent proposals on Cabinet agenda
Proposals on rents for Shropshire Council housing tenants will be discussed by councillors next week (20 February 2013).
The council’s Cabinet will consider a proposal to increase rents for existing council tenants by an average of £3.55 a week from April, which is in line with national guidelines and aims to ensure that these rents remain the lowest in the county.
The proposed increase from April 2013, resulting in an average rise of 4.88 per cent, is in accordance with the Government formula rent calculation, which is the recommended basis for setting rents for all councils and registered social landlords. The calculation has been used since 2002 and looks to provide a consistent approach for rent setting.
Cabinet is also recommended to introduce affordable rents on certain properties in the future. The affordable rents are based on 80 per cent of the local market rent, and would apply to new homes built by the council for rent and appropriate re-let properties.
The report explains that the council’s housing service has been operating under the Government’s “self-financing” regime since April 2012, which meant that the council was required to make a one-off payment of £83.3m to the Government last year but now keeps all rent income to fund the service and help repay this over a number of years.
The report also adds that the council is able to increase the affordable housing available in Shropshire after a successful bid to the Homes and Communities Agency (HCA).
The HCA awarded £814,000 towards building 62 new affordable homes for sale or rent; 25 low cost homes for sale on a shared ownership basis and 37 homes for rent. The building works are planned to begin this year and be completed by March 2015.
Affordable rents will be applied to the new homes for rent and introduced to some existing homes as they become vacant, with the decision based on local need, availability and condition of the property.
The proposals were discussed with tenant representative groups last month and if they are agreed by Cabinet and full Council, all tenants will receive a letter to explain the rent increase.
Councillor Malcolm Price, Cabinet member responsible for housing, said:
“We, of course, do not want tenants to face difficulties in paying their rent.
“However, we have to look at the levels rents are set at each year to ensure we have enough money to balance the books and maintain services.
“The rate proposed should still ensure that these rents are the lowest in the county, follows national guidance, and means we would not have a gap in funding which would ultimately impact on the quality of our housing services.
“At the same time, we are looking to the bigger picture by securing grant money to build affordable homes for sale and rent, and refining the detail on affordable rents for new homes built by the council and, where appropriate, properties which are re-let, to help those who are unable to buy or let a property on the open market.”
If approved by Cabinet, the increase in rent for 2013/14 will then require approval of full Council later this month.
Further information
From April 2013, the 4,200 homes owned by Shropshire Council will be managed by a new Arms-Length Management Organisation. They will remain under the council’s ownership. For further information click here.
The Homes and Communities Agency (HCA) is the single, national housing and regeneration agency for England. Its vision is to create opportunity for people to live in homes they can afford in places they want to live, by enabling councils and communities to deliver the ambition they have for their own areas. For more details go to www.homesandcommunities.co.uk
