Council rents are set to rise by 6.8 per cent from April, prompting fears that tenants face a bleak new year. The figure emerged in the housing revenue account draft subsidy settlement for 2011/12, which was released last week by the CLG. Maintenance allowance for local authorities will increase by just 1.9 per cent. It is a higher increase than the 6.2 per cent rise originally proposed for 2009/10, which caused such a storm the government stepped in to reduce it. The rent increase is calculated by applying the retail price index inflation from the previous September (4.6 per cent), plus a convergence factor reflecting the number of years until rents reach the target level set by government (five years). The maintenance allowance is calculated using the forecast gross domestic product deflator for 2011/12, a measure of the UK’s buying habits and value of goods, which is currently 1.9 per cent. Read
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