Council rent rises capped at 7 per cent
Proposed rent increases for council-owned homes are to be capped at seven per cent in 2023-24, according to a financial update report to be presented to Rugby Borough Council’s cabinet.
To limit rent increases to help with the cost of living crisis, the government has set the cap which means that the council will not be able to increase rents in line with the normal guidance of inflation plus one per cent – which would have seen a 11.1 per cent increase. This will mean that income for reinvestment and debt repayments will be reduced by at least £1.8 million over the next five years.
68 per cent of council tenants currently receive help with their rent in the form of Universal Credit or Housing Benefit.
However, the report also shows that a loan secured for the Biart Place and Rounds Gardens schemes at an interest rate of 1.4 per cent would now cost 4.42 per cent – vindicating the council’s decision to secure a loan from the Public Works Loan Board at a low rate before interest rates increased.
The financial update report shows councillors that the council remains the lowest cost landlord in the borough, with rents for a one-bed property around £5 per week cheaper than a housing association, and around £55 per week cheaper than private sector rent.
The report also includes indicative proposals for replacement kitchens and bathrooms, acquisitions and repairs budgets, and plans to deliver insulation and other energy efficiency improvements which will help both with bills and to help to deliver on the Council's climate change commitments. However, these will be approved by councillors when they set the Housing Revenue Account budget for 2023-24 at their meeting to be held in early February 2023.
Cllr Emma Crane, Rugby Borough Council portfolio holder for Communities and Homes, said: “The information presented in this report shows that we are in a good position to continue to invest in improving our homes.
While the decisions will be made by councillors in February 2024, the data shows that we will be able to continue our programme of improvements and investment in new and replacement properties.
“And, while we understand that any increase in rent will be unwelcome, more than two thirds of our tenants will have all or part of their rent paid by Universal Credit or Housing Benefit.”
The financial update report will be considered by councillors at the meeting of cabinet to be held on 9 January.
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