Thousands of council housing tenants are likely to be hit by the first rent increases in four years from next April.
The Government has told Milton Keynes Council that it can impose an inflation-busting increase that will be based on the rate of rising prices in September, plus one percent.
If approved by Cabinet housing chief Nigel Long in September, it could mean a 3 per cent rise, following four years when rents have actually been CUT.
This could work out at between £1.91 and £3.11 per WEEK for tenants in 11,000 homes, depending on the property size. Social rents in MK currently average £75.29 per week for a one bedroom property and £103.89 per week for a four-bedroom property.
Cllr Pauline Wallis (Lab, Central MK) is herself a council house tenant but she welcomed the draft increase at Wednesday’s meeting of the council’s Community and Housing Scrutiny Committee.
“I’m happy to pay that increase,” she said. “It takes us back to the rent we had before we had this decrease rubbish.”
But committee chair, Cllr Jenni Ferrans (Lib Dem, Monkston) admitted that some people would be hit hard. “We have got to be aware that it will hurt some people but it is fair that they pay the service charges. It is a very difficult balance,” she said.
The council has plans to invest in building new housing in MK and, as the money has to come from the Housing Revenue Account, tenants will have to pay for it.
The actual figure for the increase could be higher or lower, depending on what the level of the Consumer Prices Index (CPI) measure of inflation is in September.
In a financial double whammy, the council is also set to adopt a get-tough approach on 2,000 tenants who pay service charges. The council has been so poor at getting people to pay for things like cleaning that tenants owe the authority £179,000. Last year, the figure was a whopping £206,000.
Heledd Williams, the council’s head of neighbourhoods, who presented the draft policies for committee scrutiny, said tenants who pay both rent and service charges face an average increase of 4.23 per cent, or £2.40 per week. But she said 500 tenancies facing the biggest increases would be helped by having them capped at £2 per week.
She said: “We have to balance the books. One of the reasons we are minded to recommend the recovery of service charges is that people who don’t pay the charges are being subsidised by everyone else.”
Michael Kelleher, the council’s director of housing and regeneration, said the council needs to recover the money it is owed to be able to invest. “We need to take the balanced view,” he said. “It is fair that people pay for what they receive.”