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Around eight out of ten council homes in Caerphilly County Borough could see their rent increase, if a new way of working out bills is adopted by the council.
Caerphilly County Borough Council’s rent policy is currently being reviewed in line with the Welsh Government’s expectations that social landlords should be charging an affordable rent.
Caerphilly County Borough Council is thinking of using a formula from the Joseph Rowntree Foundation (JRF) called the Living Rent Model. In Wales, Cardiff is the only other local authority which uses this method.
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.
However if this was introduced for tenants of Caerphilly County Borough Council, it would mean 83% of council-owned properties would see an increase in rent.
A meeting of the council’s Housing and Regeneration Scrutiny Committee was told that on average, rents is currently 3.9% below what they would be using the JRF model.
At the meeting on June 9, the council’s head of housing Nick Taylor-Williams stressed the county borough would still be an affordable area for rent – despite the proposed increase.
Increasing rent using the JRF model would boost the council’s income by £2.4 million a year. That money would go into the Housing Revenue Account – which means it can only be spent back on council housing.
What will the changes look like?
Current tenants will not be affected by the proposed increase, as they are protected by current Welsh Government policy.
The current rent policy limits any rent increase for social landlords to Cost Price Inflation (CPI) plus 1% – using the level of inflation from the previous September each year.
If the JRF model is adopted, two, three and four bedroom properties, such as flats, bungalows, and houses, could see a rent increase when re-let to new tenants. However, rent for a one-bedroom property could be lowered.
Despite the JRF model calculating a lower rent for one bedroom properties, a report presented to the committee’s councillors admitted that rents for these could instead be frozen.
| Bungalow | Flat | House | Maisonette | |||||
|---|---|---|---|---|---|---|---|---|
| No. of Bedrooms | New | Current | New | Current | New | Current | New | Current |
| 1 | £90.03 | £93.04 | £81.85 | £85.56 | £90.03 | £90.96 | – | – |
| 2 | £106.40 | £100.53 | £98.22 | £93.20 | £106.40 | £101.30 | £102.31 | £98.68 |
| 3 | £114.59 | £107.93 | £106.40 | £100.61 | £114.59 | £108.90 | £110.50 | £98.68 |
| 4 | £122.77 | £114.71 | – | – | £122.77 | £113.81 | – | – |
| 5 | – | – | – | – | £130.96 | £122.17 | – | – |
Cllr Shayne Cook, cabinet member for housing, said: “It is important to stress that if the JRF Living Rent model is adopted, all existing tenants would be protected under the current Welsh Government rent policy. As a social landlord it’s essential that we use an established model to ensure affordability for our tenants is measured fairly.
“It is true that adopting this model means we can benchmark against household earnings and allows flexibility in setting rents so that affordability is central to our decision making.
“Every year we review our rents in line with the limits set by Welsh Government and the money gained from any rent increase will go back into maintaining our council housing stock, providing services for all our tenants and building new council homes which will tackle the high demand for social housing in our county borough.”
Based on All-Wales statistics for 2019/20, the report also stated that Caerphilly Council rents were the third lowest in Wales, but that Caerphilly was the fifth highest area for workplace earnings.
The council, under its Caerphilly Homes brand, currently has a housing stock of 10,648. Of this, 75% receive financial assistance such as housing benefits or universal credit.
A survey of council tenants revealed that 65% thought their rent was “fair and affordable”.
At the scrutiny meeting, Plaid Cymru councillor for St Cattwg, Judith Pritchard, asked if those who are not online were consulted.
The councillor was told by officers that some phone calls were made to tenants, but the majority of the consultation was conducted online. Three focus groups were also held to gain residents’ views on the JRF living rent model.
The report was unanimously supported by the scrutiny committee, and will now be presented to cabinet before a final decision is made.
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