Agenda item
HOUSING RENT INCREASE AND BUDGETS 2024 / 25
To consider a report by the Lead Officer: Community Housing (copy attached) on the process for determining the recommendation on the level of weekly rent increase for Community Housing tenants.
Minutes:
The Lead Member for Housing and Communities
introduced the report (previously circulated) on the Housing Rent Increase and
Budgets for 2024 / 25.
The Lead Member for Housing and Communities
advised that the report was to consider the process for determining the
recommendation on the level of weekly rent increase for Community Housing
tenants. Each year the Housing Service, which manages the council housing stock
through the Housing Revenue Account (HRA), was required to issue a rent increase
notification to tenants.
Introducing supporting officers
the Lead Member advised that they would guide the Committee through the report
and respond to any queries they might have.:
·
Head of
Housing & Communities Service (HPPCS);
·
Lead
Officer - Community Housing (LOCH);
·
Finance
and Assurance Manager (FAM);
·
Lead
Officer Housing Property (LOHP) and
· Programme Manager - Housing Development
(PMHD).
The Officers informed the Committee that the
maximum increase to weekly rents was set by Welsh Government Rent Policy, based
on the September CPI figure each year. This year, CPI was 6.7%, so the Minister
had recommended a 6.7% maximum increase.
Officers understood that any increase was a
challenge for residents and had to be carefully considered. There was the
additional requirement to ensure sufficient income generation to maintain and
improve the Council housing stock of 3,334 homes to the standard required by
the Welsh Housing Quality Standard (WHQS) and the Council’s Corporate Plan.
The LOCH informed members that it was a
comprehensive report with all the pressures detailed in Appendix 1. The LOCH
highlighted the summary of the report as follows –
·
With
the maximum increase allowed, weekly rents remained within affordability
measures for those households with the lowest levels of earned income.
·
Even
with the maximum increase, the Authority faced significant budget pressures to
achieve the new Welsh Housing Quality Standard.
·
Denbighshire
County Council could demonstrate the positive impact that investment in their
stock had on their tenants through reduced bills.
·
Any
rent increase less than the maximum allowable would mean less investment in
existing council homes.
·
Council
tenants report that they receive value for money.
·
Council
tenants believe that their rents are fair.
·
The
Authority can demonstrate that their rental income is well utilised.
·
Council
tenants were satisfied with the services they received.
The officers demonstrated what the 6.7% increase
would look like monetary wise for the various household types that the Council
had within their stock; for example, a three-bedroom family council house would
be £123.97, this was £4.55 less than the living rent model. It was clear that
the Council’s rent was lower than the Living rent model.
Rent was set using details from the Office
of National Statistics and was calculated against the incomes of Denbighshire,
as it was slightly lower than other areas, then using the Joseph Roundtree
Foundation (JRF) living rent model - which states that no one is the lowest
30th percentile, of earned incomes should have a weekly rent more than 28% of
their income.
Members of the Committee confirmed that the majority of tenants were very happy with both the large-scale
improvements to their homes – kitchens / bathrooms / heating etc. and the minor
maintenance that the Service undertook in a prompt and efficient manner. They
thanked the maintenance team for their service and communication with tenants.
Responding to the Committee’s questions
Officers advised that:
·
Welsh
Government are not able to confirm yet if there will be additional funding to
cover the increased costs incurred for bringing the Authority’s housing stock
up to their new standard.
·
The cost
of new housing development within the council was heavily dependent on WG
support.
·
The
examples of rent increase within the report pertained to tenant’s who were in
paid work.
·
72% of
Denbighshire’s housing tenants were on Universal Credit (UC), the rent increase
would be covered by UC payment.
·
Single
Access Route to Housing (SARTH) was used by both Denbighshire County Council
and Registered Social Landlords (RSLs) with SARTH people were banded depending
on a myriad of different factors including links to the area.
·
Asylum
Seekers and Refugees were offered temporary housing through various funding
streams, including the private rental sector.
·
Eco4
grants were only available to private landlords; however, there were many
different grants which Denbighshire could draw on through housing to promote
eco-friendly schemes.
Officers highlighted the budget pressures
faced, referring to a table which indicated the need for an increase in the
rent to maintain enough funds to support the bare minimum with the HRA annual
spending and balances.
There was a summary of the rent increase;
for each 1% increase, it equated to roughly a pound extra per week per
household. The income generated would be an additional £180k to the Authority
annually. The increased revenue income funded the three million pounds of
borrowing, which would support the capital spending.
Referring to the Welsh Housing Quality
Standard (WHQS) and the additional pressures on the Council’s level of
investment required, to achieve the required quality of housing stock.
The Authority needed to spend an additional
£3.8m per year to achieve the additional WHQS 2 items plus the kitchen/bathroom
programme, as well as safety and compliance matters.
Even with the maximum rent increase this
year, the Authority did not have sufficient funding to complete the new
standards, within the required timescale, without a significant increase in
Welsh Government support.
Officers highlighted the positive side of
investing in the housing stock; twelve random homes were selected following
“retrofit” improvement works, which had significantly improved the energy
efficiency and, therefore, weekly bills for those households. Each property
saved approximately £36 per month due to Retrofit energy efficiency works.
Members were informed that Denbighshire had
an 85% value for money satisfaction, which places Denbighshire County Council
at 16th out of 46 in Wales.
Responding to members’ questions the
Officers advised that:
·
The
method used to source material and contractors was the same throughout the
Council; the matter would go through the agreed procurement process and would
go to tender.
·
Regarding
the WHQS and air source heating, the houses would have a secondary form of
heating e.g. a log burner or a Charnwood fire.
·
It
would be useful to circulate additional instructions with newly installed air
heating to advise on the best, most economical way of utilising it.
·
Regarding
the secondary heating source, officers were happy to circulate a briefing note
later to members.
·
Members
were reassured that through the communication channels and the services of the
Citizens Advice Bureau tenants were guided to the correct tariffs for their
needs.
·
Officers
clarified that the WHQS required for social housing did not apply to the
Agricultural Estate properties.
The chair thanked the officers and members
for the positive discussion.
RESOLVED: that
I.
the
committee have considered and agreed the content of the report and
II.
the
Committee commend the positive work carried out.
Supporting documents:
- Housing Rent Setting 2024 25, item 5. PDF 133 KB
- App 1 Housing Rent Setting Report, item 5. PDF 1 MB