Agenda item

Purpose of Report

To propose to Council that an increase to current council house rents of 2.7% be approved within the terms of the Government’s Rent Policy for social housing and to seek approval for the introduction of revised rents from Monday 7 April 2025.

To propose to Council that an increase of 3% on Council garage rents be approved for 2025/26, in line with the Authority’s Fees and Charges increase.

Decision

1.    That Council be recommended to approve the basis of rent calculation for individual Council house rents, as set out in paragraph 2 and 4 of the officer’s report, which increased dwelling rents by 2.7% for social housing and affordable rents (from 7 April 2025).

2.    That Council be recommended to increase garage rents for 2025/26, by 3% from 7 April 2025, in accordance with the proposal set out in paragraph 2 of the officer’s report.

3.    That the report and recommendation be referred to Full Council on Tuesday 21 January for approval to be sought.

Alternative Options Considered and Rejected

As detailed in the report.

Reasons for the Decision

Having considered the impact on tenants and financial pressures the Council had in delivering services, a rental increase of 2.7% to dwellings and 3% for garages for the 2025-26 financial year was proposed, as outlined in section four of the officer’s report.

The proposed levels of rent for 2025/26 would come into effect from Monday 7 April 2024. Budgeted rental income for the year, subject to approval, would be circa £36,371,680.

The average 52-week net rent for Council dwellings would increase by £2.36 per week, across all property and rent types, under the proposed 2.7% increase.

The average 52-week rent for Council garages would increase by £0.27 per week under the proposed 3% increase.

Annual increases to housing rents were capped at CPI + 1% per annum for dwelling rents, with September 2024 being the applicable CPI figure for rent setting for 2025-26.

CPI in September 2024 was 1.7%. Therefore, the maximum housing rents could be increased in 2025-26 was 2.7%.

The financing for council housing was changed in April 2012 – the ‘Self-financing Regime’ was introduced under which local authorities were required to buy themselves out of the national housing subsidy regime in return for the keeping of future rental income at local level. The valuation of the housing stock and the Council’s Housing Revenue Account (HRA) Business Plan was based on rental income rising in line with the Government’s rent convergence policy and rent guidelines.

The Council’s ability to charge rents was governed by the Rent Standard, one of the economic standards that the Regulator of Social Housing (RSH) expected providers of social housing to comply with. It set the requirements around how registered providers set and increased rents for social housing in line with Government policy as set out in?Policy Statement on Rents for Social Housing, detailed at 3.1, 3.2 and 3.4 of the officer’s report.

The Council had taken a considered approach regarding rental increases to tenants and their households within the last few years, balanced against our need to be financially sustainable and to continue to deliver services. In 2022/2023 a lower increase was approved at 3.6% (compared to a 4.1% maximum) and in 2023/2024 at 6.5% (compared to a 7% maximum) respectively.