03 November 2006
Council rents are expected to rise by up to 5% after the government announced that local authorities will receive an extra £132m for managing and maintaining their homes.
The Department for Communities and Local Government this week forecast that the average guideline rent in England will rise in April by £4.05 (7.2%) to £60.16 per week.
But housing minister Yvette Cooper said a cap of 5% was being imposed to protect tenants while councils and housing associations restructure their rents.
Rent increases are partly determined by the retail price index the previous September, which this year stood at 3.6%. Ian Wright, service development director at the Northern Housing Consortium, said the relatively high inflation figure would mean that, nationally, the housing revenue account (HRA) would be in surplus. 'Tenants will be funding government policy out of their own pockets,' he said.
The increase in management and maintenance allowances, taking their total value to £3.47bn, is worth nearly 4% and equivalent to an extra £63 per home.
The draft HRA settlement, announced on October 30, will be studied by northern councils, which 12 months ago claimed the government was back-sliding over plans to review the allocation.
The councils had been expecting to receive higher allowances from April 2006, but an extension of protection for authorities in London and the South meant their gains would not materialise before 2008.
Steve Partridge, a director at consultants Housing Quality Network, said early indications suggested that the DCLG proposed to reduce protection for councils in the South and allow greater redistribution.
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