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Rent for council homes in Caerphilly County Borough is expected to increase by 6.5% from April 2023 – if approved by senior councillors.
This would increase the current average rent by £6.10 per week, from £93.80 to £99.90 per week, over 52 weeks.
According to the report, 78% of council tenants’ rent is funded from financial support – such as housing benefit or universal credit – which is taxpayer funded.
The report, which is set to be presented to the housing and regeneration scrutiny committee on Tuesday, November 29, states: “We need to strike an appropriate balance between our commitments to service delivery (including increasing housing supply), and to protecting tenants from large rent increases.
“A rent freeze would protect tenants, but would not be financially credible to the HRA.”
The Housing Revenue Account (HRA) can only be spent on council housing, therefore any income generated from council tenants’ rent will go back to the council’s housing pot to be spent on maintenance and new-builds.
The report states that a freeze in 2023/24 would result in higher rent increases for years afterwards.
Despite the proposed increase, the council will still have to borrow around £10 million to “meet the demands and costs of the services”.
In July 2022, the council adopted a new way of working out rent, which was a formula from the Joseph Rowntree Foundation (JRF) called the Living Rent Model. Its aim is to work out affordable rents linked to people’s income, it does this using earnings data for an area from the Office for National Statistics.
Despite the increase, council homes’ rent is still “affordable” under the JRF model.
In a survey sent out to tenants by Caerphilly Homes – which is the housing branch of the council – 88% of respondents were extremely or very concerned about the cost of living.
Caerphilly Homes, along with all other social landlords in Wales, has voluntarily agreed there will be no evictions due to financial hardship in 2023-24, where tenants engage with their landlords.
Caerphilly Homes has restructured the rents team to place greater focus on support. There are 19 members of staff in the department, four of which focus on rent and debt recovery, six who deal with welfare benefit checks and entitlements, and nine who focus on tenancy support and sustainment.
The new Renting Homes Wales Act comes into effect from December 1 which means that tenants need at least two months notice of any rent increases – previously this was 28 days.
In addition to council homes, the rent of council-owned garages is also expected to increase for the first time in three years. Garage rent is proposed to increase by 5.5%, which is the equivalent of £8.85.
Caerphilly Homes currently own 887 garages, of which 135 are let to council tenants and 505 are let to private residents, the remaining 247 are empty.
The housing and regeneration scrutiny committee meeting can be viewed here, at 5.30pm tomorrow.
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