Shropshire Council housing rents to go up by 1.5 per cent from April
Council house tenants in the Shropshire Council area are set to see a 1.5 per cent rent increase in April under plans to be signed off next week.
The council says the rise will generate around £218,000 in extra income in the 2021/22 financial year.
The move will see the average social housing rent increased by £1.23 a week to £83.14.
Meanwhile, affordable rent will go up by an average of £1.49 a week, taking it to £101.56.
The changes are part of the council’s annual review of its fees and charges which will be discussed by the cabinet at a meeting on Monday.
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Social housing rents were increased by 2.7 per cent last year after four years of government-imposed reductions.
A report to cabinet by finance director James Walton says rents were previously increased each year based on a complex government formula.
The process was simplified in 2014, to a new formula based on the previous September’s consumer price index (CPI) plus one per cent.
Abandoning
The change came into effect in 2015 and was intended to last for 10 years.
However, following the 2015 General Election the government announced it was abandoning the new guidance and imposing an annual one per cent reduction in social rents for the next four years.
Mr Walton’s report says: “This change in policy means that actual rent levels are 15.2 per cent below the original expectation.
“This represents an annual loss of income to the housing revenue account of around £2.5m.”
This came to an end last year and councils were told to go back to the 2015 inflation-based formula. CPI in September 2019 was 1.7 per cent, meaning a maximum 2.7 per cent social rent increase for 2020/21.
Mr Walton’s report adds: “CPI in September 2020 stood at 0.5 per cent, which gives rise to an increase of 1.5 per cent from April 2021.”
There will also be an increase for people living in shared ownership homes who pay rent to the council for the percentage of the property not purchased.
This will be either 1.5 per cent or 1.6 per cent, depending on individual lease agreements, equating to an average increase of 60p a week.
The cabinet report concludes: “After adjustment for estimated changes on stock numbers the overall impact to the housing revenue account will be an increase in rent income in the region of £218,000 from 2020/21 to 2021/22.”
