Agenda item

To submit a report by the Head of Housing Services.

The report of the Head of Housing Services seeking the Executive’s approval for increases in rent and service charges for 2021/2022 was presented for consideration.

Following a summary introduction by the Portfolio Member for Housing and Supporting Communities, the Head of Housing Services reported that Welsh Government agrees the policy for Social Housing Rents annually and a letter confirming the policy for 2021/22 was received on 30 November, 2020. It advises that all local authorities should use the formula of consumer price index (CPI) +1% with the value of CPI in September being 0.5% i.e.  1.5%. It is proposed that in order to apply the annual rent increase fairly, equally amongst tenants and to ensure that the maximum annual increase threshold amount is not exceeded, the increase is calculated by “current rent + 0.45%” and applied to all tenants. For the tenants that are significantly below the target rent band for this financial year an additional £2.00 per week will be added. This is to ensure that the Authority continues to work towards achieving convergence with other social housing providers. In practice this will mean that  for the 1,910 properties that are below the current target rents bands the current rent will be increased by 0.45% + £2.00 per week. For the remaining 1,942 properties that are on current target rent or higher, an increase of 0.45% will be applied. An increase of 13p per week is proposed for garage rent and the proposed weekly service charges for 2021/22 based on 51 weeks collection are as set out in paragraph 3.3 of the report.

During the next financial year the Authority is looking to develop new Council houses with a view to charging Intermediate Rents which is an additional element for 2021/22. These type of properties are affordable housing where the rents are above those of social rented properties but below those of private rented properties and will be allocated under the Tai Teg Allocation Register and not the Common Housing Register; they are for people who do not qualify for social housing but who cannot afford open market rent prices or properties. It is proposed that Intermediate rents are set at 80% of open market rental costs or up to Local Housing Allowance.

Should the proposed rents increases be approved and implemented, the Authority will have

1, 677 properties which remain below target rent and 2,175 properties at target rent.

In considering the proposals, the Executive sought further clarification with regard to the following –

•           The level at which Intermediate Rents would be set in the context of the table at paragraph 6.3 of the report which provides information for Anglesey with regard to social rent, average private rented sector rent and local housing allowance for 1, 2, 3 and 4 bedroom properties.

The Head of Housing Services clarified that for an open market rental property with for example a monthly rent of £600, the Authority would charge £480 intermediate rent on the property providing that that charge is not higher than the Local Housing Allowance and on the basis that if circumstances change the family renting the property would be eligible for Housing Benefit which would cover the higher level of rent.

•           With regard to the reference to average Private Rented Sector (PRS) rents in the table, the process by which open market rents are set.

The Head of Housing Services clarified that property companies such as Zoopla research the market and use market data to work out the average private rents for different areas.

•           The timeline for  bringing the properties that remain under target rent to target level and whether the Authority is working systematically to do so.

The Head of Housing Services advised that had the system remained unchanged from last year the Authority would have attained rent convergence in 2023/24; it is hoped this timeline can still be achieved and that remains the aim.

•           Whether Intermediate Rent properties  involve equity sharing or are rent only properties and remain so in perpetuity.

The Head of Housing Services confirmed that whilst Intermediate rent properties are for rent, opportunities do arise to sell equity shares in these properties but subject to a legal condition that if equity shares are sold the Authority has first call on the purchase. If having been bought back by the Authority these properties can again be let as Intermediate rentals.

It was resolved to approve the following –

•           The rent increase in line with Welsh Government target rent based on collection over 51 weeks.

•           Increasing all rents below current target rent bands by 0.45% + £2.00 per week to continue working towards rent convergence.

•           Increasing all rents on target or higher by 0.45%.

•           An increase of 13p per week for the rent of all garages.

•           That the service charges costs as noted within section 3.3 of the report be applied to all tenants who receive the relevant services.

•           The setting of Intermediate Rent Fees at 80% of open market rental costs or up to Local Housing Allowance.