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.”
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.
