11 November 2005
Council rents will be brought in line with those charged by housing associations but should not increase by more than 5% during each of the next two years, ministers said this week.
Twelve months after the Office of the Deputy Prime Minister put off changes to the rent restructuring formula that would have meant hefty rises during the run-up to the general election, it has declared that it is on course to complete the task by 2011.
The formula for calculating council rents, based on local earnings and property values, will be adjusted so that it is brought fully into line with that used by registered social landlords. The ODPM is also implementing other changes recommended by an independent review in July 2004, including bigger differentials for large properties.
Announcing the changes on November 7, housing minister Yvette Cooper said they would produce fairer rents for different-sized properties. 'Rents in the social rented sector will remain at about half of private sector rents over the next two years,' she added.
According to the ODPM, council rents will rise by an average of 4.7% in 2006/07, with the average national rent increasing by £2.59 per week to £57.71.
A similar increase is forecast the following year.
In London, the average rent should rise by £3.23 per week to £72.60. Stephen Cowan, chair of the Association of London Government's housing steering group, welcomed the two-year cap on rent increases.
Danny Friedman, director of policy at the National Housing Federation, said the differentials for larger properties would encourage RSLs to build more family-sized homes and reduce overcrowding.
As part of this week's announcement, the ODPM also stated that local authority management and maintenance allowances would increase by 2.7% next year and in 2007/08.
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