Agenda item

Purpose of Report

To propose that the Council be requested to approve an increase to council house rents of 6.5% within the terms of the Government’s Rent Policy for social housing (April 2020 updated 15 November 2021) and approve the introduction of revised rents from Monday 3 April 2023.

To propose that the Council be requested to approve an increase of 5% on Council garage rents for 2023/24, in line with other fees and charges revisions by the Council.

Decision

(1)       That the Council be recommended to approve the basis of rent calculation for changes to individual Council house rents, as set out in paragraph 6 of the report, which represented an increase in the average calculated 52-week council house net rent in 2023/24 of 6.5% for social housing rents (an average increase of £4.71 per week) and for affordable rents (an average increase £7.58 per week), per property, which was in accordance with Government policy.

(2)       That the Council be recommended to increase garage rents for 2023/24, as set out in paragraph 6.1 of the report, by 5%.

Alternative Options Considered and Rejected

As detailed in the report.

Reasons for the Decision

In October 2017, the government announced its intention to set a long-term rent deal, with annual rent increases on both social and affordable rent properties of up to the level of Consumer Price Index, plus 1% from 1 April 2020 for a period of at least 5 years.

In keeping with the current Housing Business Plan approved by Council and the Governments Rent Guidelines, the formula rent rise for 2023/24 should be based on CPI in the previous September (September 2022 = 10.1%) plus 1.0% as stated above.

Following a national consultation due to the national economic situation, Government had stated that the rent increase in social housing would be capped at 7% for the year 2023/24. Thereby stepping away from the previously agreed CPI plus 1%.

After consideration of the impact on the Council’s tenants and other pressures that household incomes were facing, particularly the most vulnerable in our community, and at the same time recognising the economic and financial pressures it had in delivering services to its customers, it was proposed to apply a lower level of rental increase than 7% as stated above.

The level of rent increase with effect from Monday 3 April 2023 was proposed at 6.5%. As a result, the budgeted rental income for 2022/23 would be £32,231,610, subject to approval.

An increase in garage rents of 5% was proposed, which aligned with the Council’s fees and charges increase for 2023/24. This would result in an average increase in the rent charged to £8.67 per week for 2023/24 (based on a calculated 52 week charge period), an average increase of £0.43 per week.

The proposed changes had been considered and were generally supported by the Lincoln Tenants Panel.

Contextually it should be noted that in July 2015 the Government announced that Social Housing rents would be reduced by 1% year on year from 2016 for four years. The impact/loss created from this was compounded by the fact that Local Authorities would have been increasing rents in line with guidance, IE CPI plus 1% over the period, not reducing by 1%.

The impact on the City of Lincoln’s HRA was an estimated rent loss of £17,000,000 over that four-year period. This income would have been spent on improving existing stock and adding homes to our stock which were desperately needed by our community.

Had this rent reduction not been imposed and the rents were increased as per the HRA Business Plan (CPI+1%) the average weekly rent for social housing rent would now be approximately £9 per week more.