Council home rent rises proposed and new hardship fund created for low income tenants not on benefits

Staner Court Photo David Townsend

Rent on council homes will increase by 7.7% for the 2024/25 financial year.

The increase, which is based on the Consumer Price Index (CPI)+1%, will be applied to the council’s 3460 properties.

The council properties are let via two rental rates – social rent and affordable rent.

The vast majority of homes – 3,295 – are social rents. These are set based on government rent guidance and are usually about 40-50% of the local market rent.

The council also has 165 properties at affordable rent. The council’s affordable rent is set at up to 80% of market rates but not exceeding the Local Housing Allowance – housing support available for renters in receipt of either the housing element of Universal Credit or Housing Benefit.

A council report says: “Based on the proposed increase across the whole stock the average rent is £102.11, this is an average increase of £7.28p per property per week.”

Council owned property rent rate proposals for 2024/2025

The report adds: “It should be noted that approximately 81% of those charged social rents and 91.5% of those charged affordable rents, are in receipt of either Housing Benefit or Universal Credit.

“Whilst individual cases may vary due to specific circumstances, it is reasonable to assume that in general, increased rent will be matched by increased benefit.

“Due to the increase in LHA rates from 1st April it is anticipated that no one in an affordable rented property would see their rents increase over and above the LHA rate as a result of the 7.7% increase. Although if this was the case to ensure on-going affordability for these tenants the Council caps rents at the relevant LHA rate for the property type.”

Deputy council leader Helen Whitehead, who is the portfolio holder for housing, told Cabinet members at a meeting on Thursday (January 11): “At Thanet council we use two forms of rental rate within our general housing stock; social rent and affordable rent.

“Our version of affordable rent is very different from the central government definition, which generally defines affordable rent as being up to 80% of private rental rates; for Thanet, that would be far from affordable.

“We use a dual layer definition; our affordable housing -which I tend to refer to as “genuinely affordable” housing- is classed as up to 80% of private rent, but not to exceed Local Housing Allowance rate, which historically for this area never meets 80% of the private rental market. Simply, our affordable housing will never go above Local Housing Allowance.

“The vast majority of our housing stock is at social rent; social rent is a lower rent than affordable rent, and much lower than private market rent.

“At a social rent, a 3 bed house would cost approximately £452.52 per month; at TDC affordable rent, it would cost approximately £704 per month. On the private market, 3 bed homes are currently renting at between £1,100 and £1,600 per month.

“The current Local Housing Allowance rate for a 3 bed house is £797.81, meaning that both forms of rental that we offer would be more than covered by housing benefit/universal credit, making both accessible for even our most vulnerable or disadvantaged residents.

“It is worth noting that the vast majority of individuals who rely on LHA to afford their housing are currently trapped within the private rental market. This is one of the principal reasons for creating and adopting our accelerated (house building and buying) programme, as the most disadvantaged residents in terms of housing affordability, and therefore cost of living, are currently within the private sector. To help them as we have helped those within the council portfolio, we have to expand our provision.

“In April we are also likely to see a significant increase in the LHA rate; in all likelihood this means that even our affordable rental will fall within the mid range of LHA.”

Local Housing Allowance

Indicative Local Housing Allowance rates for Thanet from April 1 have recently been published by government.

In last November’s Autumn Statement it was announced that LHA rates would be uprated across Great Britain for the first time in three years.

The announcement means housing benefit rates will be reset to cover the cheapest 30% of properties.

Current LHA rates per month

  • Shared accommodation  £299.17
  • 1 bedroom £473.72
  • 2 bedrooms £648.22
  • 3 bedrooms £797.81
  • 4 bedrooms £947.40

Indicative new LHA rates per month

  • Shared £379.99
  • 1 bed £577.83
  • 2 bed £749.99
  • 3 bed £899.99
  • 4 bed £1,150.01

New hardship fund

There will be a new £30,000 hardship fund created to help tenants who may struggle with the 7.7% increase. This will be aimed at those who have no access to benefits and are on a low income.

Cllr Whitehead said: “It is important to remember that this increase, apart from households that receive no assistance with housing benefit or the housing element of Universal Credit, does not come from resident’s pockets; it will be paid by central government, as the increase is still well below the full rate of Local Housing Allowance.

“I have put forward an option that I consider provides the best outcome for both current tenants and all residents in terms of growing housing provision.

“Increasing at 7.7% across both forms of tenure but providing a support fund to ensure that any households on a lower income whose increase is not paid via benefits are not impacted, allows us to support more residents in the private sector, grow the portfolio further, and does not disadvantage current tenants.

“We would administer and determine support, assessing those who have no access to benefits and on a low income as eligible for support. The fund could be used in a range of ways to support households facing financial hardship.”

Council buy and build programme

Thanet council has pledged to increase council homes by 400 over four years through a buy and build programme.

Bought properties includes homes at Spitfire Green in Ramsgate, Tothill Street in Minster, Westwood and Reading Street and Northwood Road.

Builds are planned for sites including Tomlin Drive and the former Dane Valley Arms pub in Margate and Staner Court and Clements Road in Ramsgate.

Cllr Whitehead said: “It is essential to consider the fact that our most vulnerable residents currently are those who are homeless, struggling to afford private rent, and in insecure tenancies. In only four months we have been able to add 123 extra properties to our portfolio to support these residents; but to continue supporting others in vulnerable positions, it is vital that we both maintain and grow our portfolio.”

Housing statistics on Thanet council’s website have not been updated since 2022. However, figure obtained by The Isle of Thanet News last Summer showed 233 households in temporary accommodation, with 135 of these outside Thanet, and 1604 applicants on the housing waiting list.

Funding

The council’s Housing Revenue Account (HRA) has been running at a deficit for a number of years, mainly due to the requirement by the government to reduce social and affordable rents by 1% per annum for the four years starting in 2016/17.

The council says this, coupled with other one-off costs such as waking watch and bringing the service back in-house, has meant that increasing rents by the maximum 7.7% is essential to ensure the HRA comes back to a surplus position over time.

The main source of income for the HRA is the rents paid by council tenants. Costs paid for from the HRA include maintenance and repairs, major works such as tower block cladding replacement, and funding for new council properties.

The rent rises and hardship fund will be approved in February as part of Thanet council’s budget process.

31 Comments

  1. It’s highly unlikely that 75% of those houses will go to help those that have been waiting for years!

    TDC will no matter who is in charge be awful.
    The streets are dirty
    The bins don’t get emptied
    Homelessness is on a rapid rise
    They seem to feel like they are above the people who they’re meant to serve!

    Looking forward to paying more tax for even less in April!!

    • All properties produced go to those on the waiting list.

      And we’ve increased the street cleansing budget, produced 123 more Council homes in 4 months (as well as not being responsible for the cost of living crisis that is causing homelessness) and will continue to produce more homes.

      • When are TDC going to re-open the long-closed public footpath off of Margate High Street, as it’s their legal duty to do so?

      • Whilst properties will go to those on the list, it doesn’t answer “None of the Above”s point about there being those on the list for years. It should be explained that allocation is on a needs based basis under which length of time on the list does little to get anyone closer to a council house. Someone with sufficient needs could have priority for a council property the day after applying, ahead of those on the list for years.

  2. It would have been nice to see another column with the average private rented prices alongside these two – social rent and affordable rent for comparison.

    • This link is for a page that describes how data is collected that is then in turn used to determine LHA. The problem with most articles is that they usually refer to the cost of properties currently being marketed , making little mention of the rents pid by existing private sector tenants , so the numbers soon get distorted.
      Many landlords will keep rent increases low to encourage decent tenants to stay ( a change of tenant is expensive and you never really know how good a tenant will be until they’ve been in the property a while). The big increases in rent are the ones you see when a longstanding tenant leaves and the property is readvertised at the current market rate.

      https://www.gov.uk/government/publications/local-housing-allowance-list-of-rents-2023-24

      You should be able to follow links within the article to other data sets.

  3. It only gives the example they want you to see, basically thar makes it look better for them!

    I rent a 3 bed privately and pay £800pcm and so do others I know!

    • This is about rents for council owned properties and the rates proposed for the coming financial year. The council doesn’t control private market rents.

    • Not really.

      Rent assessments are based on current market values and rents, rather than existing tenancies.

      The vast majority of tenants I work with would be thrilled to find a 3 bed private sector property for £800 per month.

      • Realistically people are not going to find a new rental at 800 for a 3 bed, but there will be considerable numbers in existing properties at such rents.
        Back around 2000 a 3 bed was generally around £560 a month , just with CPI this would be around £950 then you have all the property rental specific cost increases over that time.
        Heinz beans in 2000 82p , today £1.40 ( offers aside).
        Why is the cost of housing meant to be detached from economic realities?
        Then you have supply and demand issues driving prices up further, insufficient building and huge numbers of people entering the country. Not forgetting that Thanet is now more popular thannit has been for many years which has attracted wealthier people.
        If you want to identify landlords making the big money, look at the HMO sector.

  4. Yes I know, I was saying that private non council are not as high as they want to make out to be.

    Some areas are but plenty more are not!

  5. Look,TDC is down 60% in income thanks to 14 years of austerity. Expecting any organisation to thrive in those circumstances is placing hope over experience and moaning that fings ain’t wot they used to be ignores this situation.
    Sure TDC is not great and I would abolish them tomorrow if it were in my power, but KCC would have to go too, and we will need to restructure just about everything.
    The way rents are going you will be lucky to maintain it at that price.
    Moan about TDC by all means but things need to change,the status quo is collapsing as we watch.

    • The headline figure may be 60% but what are the numbers once you take into account all the grants, projects and specific funding rounds?
      Parts of TDC can’t use a calculator or check up on works they pay for, the waste is collosal. Remember the disputed 1 million relating to the P+R plumbing contract? They’ve agreed to “ sentinel point testing” in respect of legionella risk , in properties that don’t have recirculating hot water systems to which sentinel point testing applies ( usually places like hospitals, care homes etc) the legionella risk assessment even says such checks are not applicable, but for some reason TDC choose to waste 1000’s. Any request to have the decision explained is ignored.

  6. The point is that taxpayers are still having to find money to pay for these increases – just not those people living in the council properties themselves.

    How does the quote go ? The trouble with socialists is that they run out of other people’s money to spend. Thanet Labour are like Robin Hood on steroids.

    • The HRA is self funding; it does not link to Council tax.

      Are you arguing that tax overall, paid to central government, shouldn’t support those who need housing?

      • We are told that the HRA’s main source of income is from rent paid by council tenants & the percentage of tenants that receive Housing Benefit or Universal Credit. Also knowing that is has been in deficit for some time it would be interesting if you could say how many tenants of the council’s 3460 properties pay 100% of their own rent?

  7. Helen Whitehead – my impression is that you and some of your fellow councillors are being pretty proactive re. social housing, you’re really trying and also using this forum to discuss with people rather than throwing out vacuous party-political slogans. Much appreciated & more power to your elbow.

    • Thank you Carina.

      Much appreciated on a somewhat challenging weekend. 🙂

      We will keep doing our best.

      Very best wishes,

      Helen.

  8. The problem now is that private landlords will see these increases/raised benefit levels and will just up their rents over that level again and every one will be back to square one. just gives the greedy landlords more money.
    It will also encourage more by-to-let which in turn starves the market of any hope for first time buyers – I personally can’t see any real solution apart from building more social housing which it seems TDC are trying their very best to do.

    • Yep , my properties are way ahead of the 30th percentile in terms of quality, why would i chhose to let them to new tenants for less than the gov will pay? The electrician i use is £40 an hour, plumber £60 callout and £30 thereafter, tax allowance rates have been frozen for too long. Many landlords make far less actual profit after tax than people seem to think.
      The council pays no tax, gets grants and has it’s own land.
      Are all the staff costs for TDC’s social housing staff paid from the HRA? Including pensions? Or are these costs covered by council tax? Same for the capital costs of the council offices and overheads?
      The council charged for office space etc out of the selective licencing scheme fees.
      It’s all far less transparent than we’re sometimes led to believe.
      Landlords pay 100% council tax whilst a property is void, even for 1 day, quite how is that equitable when the previous occupant had a 25% discount? This is a discretionary charge the council chooses to apply. Does the housing department pay council tax to TDC when their properties are empty, i asked and was told it would be absurd to transfer money between departments. If this is still the case then another little transfer from the Council Tax payer to help support TDC housing.
      Landlords are squeezed finacially from all sides and there is no certainty looking forward, so increasing revenues is just plain good business.

    • Take the “greedy” landlords away and where would you be then regarding housing waiting lists and homelessness.
      You can’t have it both ways!

  9. “Low income tenants not on benefits” what group does this cover? The welfare state is a substantial safety net, which groups do TDC consider require additional support where the benefit system doesn’t?
    Is it really for TDC to become an extension of the welfare state?

    • Self-employed people are unlikely to qualify for Universal Credits (which are the baseline for other benefits and schemes), just as example, once their Minimum Income Floor is imposed. Just as example.

  10. Rate or Revenue support grant is or was a way of funding councils with limited ability to raise cash from what is known as council tax.Business rates are not paid to local govt either or at least not in toto.
    Grants, funding pots, competitive bids etc are not a substitute and cost time, money, and expertise to access.TDC may not have the sharpest calculator in the world but even if they did it would not replace RSG adequately.
    100 years ago Poplarism was fought on just this same basis.If Helen reads the new John Cruddas book she can find all about it.
    I am a firm believer in a unitary council for East Kent and whatever TDC do won’t be as effective.
    Helen, bless her has her heart in the right place but it is not enough and we need to restructure and reform (real reform, not anything Farage dreams up)to sort a housing crisis of our own making.

    • The disaster that was East Kent Housing would probably be a caution when thinking of combined authorites. Too many vested interests and personal empires for there to be any real chance of it working.
      Whistle blowing by staff at EKH was nipped in the bud by offering the staff jobs in the new individual council housing departments.

    • Ladling money to the likes of TDC would just be a total waste , you’ve only to look at the way they carry on

      Commercial property department in chaos ( whose portfolio did that fall under)
      Marks and Spencers Building ( how much hasvthat absorbed)
      The building/ payment roundabouts for property transferred/ bought back
      The state of Winter Gardens, Theatre Royal
      Mess surrounding Northdown house and even if counil gave it back to the heirs of the family that gave it to the town , there’d be issues over some that was sold off.
      Animal exports
      State of Royal Crescent and the bills to leaseholders of 200k ( though its rumoured a deal has been done, that means the council will cover the bills and place a charge on the flats)
      Port ramsgate loading jetty
      Dreamland
      All the staff disputes, nda’s etc etc
      Cosy asset disposals
      Theparking meter cash that went missing ( reason for the request for cctv surveillance but wascrefused)
      Housing department tender processes you’d almost be excuded for believing are designed to make sure the right company wins.
      Blatant incompetence/dishonesty/ laziness in respect of charges to leaseholders.

      Then all the things that don’t get out.

      At least by having to bid for money , those supplying it have a good idea of where it’s going and be used effectively ( if the schemes actually come to fruition)

  11. Agreed TDC are a waste of space, so we are well overdue for an overhaul.
    Relying on the private sector is a snare and delusion.Some here may brag about what they own and moan about the returns, but until Osborne trimmed them a little,it was money for old rope.
    If you think it is not worth the risk sell up and invest elsewhere,such as fine wine, whisky,old cars, or gold etc.
    Leave social housing to local govt and allow first time buyers to get on the housing ladder.A bit of readjustment downwards in domestic property might do us all a power of good.
    Above all stop justifying the unjustifiable.

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