Councils in Rent Rebellion

A large number of councils have rebelled against new government guidance about the level at which they should set their rents. Research into 104 English councils revealed one-third planned to raise rents by more than the 2.2% average allowed under the government’s formula in 2015/16. In most cases, they acted to avoid blowing a massive hole in detailed 30-year business plans, agreed with the government only three years previously. 35 councils have ignored the government and set increases of up to 8.6%, after finding that reduced rent increases could result in debt going unpaid and no cash for repairs. Read more on Inside Housing.

UK First As Housing Association Granted 'Rent Waiver'

A housing association that owns ex-council homes in Bolton has become the first in the country to be told it can exceed the government’s new formula for rent increases. While most associations can only raise rents in April by 2.2% - a figure based around the rate of inflation last September - Bolton at Home convinced the HCA that it needed larger increases to fund stock improvements. Some of its tenants can therefore expect to pay as much as £2 per week more on top of the general 2.2% rise.  Read more on 24dash.

Rent Increase Blow to Landlords

Housing experts are warning that landlords face a costs squeeze under the reformed social rent formula as a result of unprecedentedly low inflation rates. The consumer price index (CPI) for September has been set at a five-year low rate of 1.2%, falling from 1.5% the previous month. For 10 years from April 2015 landlords must use a formula of the September rate of CPI plus 1% to set rents, instead of the current formula of the retail price index (RPI), which was set at 2.3%, plus 0.5%. Because of the low CPI rate, landlords next year will only be able to increase rents by up to 2.2%, compared with 2.8% under the RPI-linked system. Experts said that the 0.6% gap between the two rent formulas was higher than most landlords had anticipated, and would force organisations to find efficiencies.  Read more on Inside Housing.

Landlords Call For Clarity on Pay-To-Stay Rent Rules

Landlords have branded new guidance on ‘pay-to-stay’ rules ‘tokenistic’ because councils lack powers to vet tenants’ incomes. The government last week announced its new social housing rent policy, which comes into effect next April. Guidance stated the government ‘does not expect’ councils to apply the normal rent formula to social tenants with high incomes - households with an annual income of £60,000 - but instead encourages them to charge those residents ‘a fairer level of rent to stay in their homes’. It said landlords should be able to charge these tenants up to full market rent. Read more on Inside Housing.