Council rent hike of 6.5% looks set to be approved

RENT increases for council homes in Caerphilly county have been backed by scrutiny councillors and the proposal is now set to go to cabinet for a final decision.

From April 2023, council homes’ rent is expected to increase by 6.5%. This would increase the current average rent by £6.10 per week, from £93.80 to £99.90 per week, over 52 weeks.

According to the report presented to the housing and regeneration scrutiny committee on Tuesday, 78% of council tenants’ rent is funded from financial support – such as housing benefit or universal credit – which is taxpayer-funded.

At the meeting, Plaid Cymru councillor Judith Pritchard said she supported the proposal as the majority of council tenants are on benefits and receive a state pension, so the increase wouldn’t effect them directly.

The money from rent goes into the Housing Revenue Account (HRA), which can only be spent on council housing. Therefore any income generated from council tenants’ rent will go back to the council’s housing pot to be spent on maintenance and new-builds.

The report states: “We need to strike an appropriate balance between our commitments to service delivery (including increasing housing supply), and to protecting tenants from large rent increases.

“A rent freeze would protect tenants, but would not be financially credible to the HRA.”

It adds that a freeze in 2023-24 would result in higher rent increases for years afterwards.

Councillor Shayne Cook, cabinet member for housing, said: “We need to build council homes and we need money to do that, and we have got to repair them as well.”

Despite the proposed increase, the council will still have to borrow around £10m to “meet the demands and costs of the services”.

In July 2022, the council adopted a new way of working out rent, which was a formula from the Joseph Rowntree Foundation (JRF) called the Living Rent Model. Its aim is to work out affordable rents linked to people’s income.

Despite the increase, council homes’ rent is still “affordable” under the JRF model.

In a survey sent out to tenants by Caerphilly Homes – the housing branch of the council – 88% of respondents said they were extremely or very concerned about the cost of living.

Caerphilly Homes, along with all other social landlords in Wales, has voluntarily agreed there will be no evictions due to financial hardship in 2023-24, where tenants engage with their landlords.

The council’s cabinet will consider the rent increase proposal at its meeting on December 14.