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Decision Maker: Executive Councillor for Housing
Decision status: Recommendations Approved
Is Key decision?: Yes
Is subject to call in?: No
Consider and approve the HRA Rent Setting Policy to be effective from April 2015.
Matter for
Decision
The
report referred to a government consultation on the future rent policy for local
authority landlords in late 2013. The government issued revised ‘Guidance on
Rents for Social Housing’ in May 2014.
Decision
of Executive Councillor for Housing
The
Executive Councillor for Housing resolved to:
i.
Approved
the revised ‘Rent Policy’ at Appendix A of the Officer’s to be effective from
April 2015.
Scrutiny
Considerations
The Committee received a report from the
Principal Accountant / Business Manager who highlighted the changes in rent setting guidance compared with previous
government guidance and set out the proposed approach to rent setting at a
local level from April 2015, with an update to the local ‘Rent Policy’ at
Appendix A of the Officer’s report.
The Committee made the following comments in response to the report:
i.
Asked for explanation of the statement on page 37
of the agenda report pack:
‘The
City Council does not currently apply the 5% flexibility
in formula rents (10% for
sheltered / support housing) but will
review this practice on an annual basis,
with any change proposed only after consultation’
ii.
Queried who the following statement on page 37 of
the agenda pack would apply to; and asked if this would apply to new tenants or
existing tenants whose property have under gone redevelopment or have moved
back to an area that has been redeveloped.
‘Rents
for properties which have undergone a material change,
full refurbishment or rebuild, (i.e.; sheltered
scheme refurbishment, property extension or conversion)
will be set immediately at target social rents,
reflecting the increased investment and condition of the property’
iii.
Stated that the statement on page 39 of the agenda
pack suggests that the Council would implement market rent if able for high
income households, which members of the Committee would oppose.
‘It
is not currently proposed to implement the ability to charge market rents for high income households at a local level, due to the lack of statutory
right to demand the required financial
information and therefore enforce the higher
charge’.
iv.
Queried how Housing Associations in Cambridge set
their rent.
v.
Asked if the Committee would consider issuing a
statement to reiterate that they were not going to charge market rents for high
income households.
vi.
Asked what was the length of tenancy for new
tenants who moved into new build housing and would rents be reset each time
when the tenant leaves.
vii.
Stated that the Committee would have no knowledge
of tenants’ income as legally they are not asked to disclose the information,
therefore it would not be possible to determine those which were high income
households.
In response to the Committee’s comments
Officers, the Director of Community and Customer Services stated the following:
i.
With regards to high income households, any
proposal would be for the Housing Scrutiny Committee to consider and the
Executive Councillor to make. There was no implication that this would come
forward but only if the Government made this statutory.
ii.
The 5% flexibility was introduced as formula in
2002, which allowed Local Authorities to charge above or below the target rent
setting if required.
iii.
Confirmed that when a property had been
refurbishment, all units were returned at target rent.
iv.
Affordable rent was currently set at around 65% of
the market rent (roughly equivalent to the level of Local Housing allowance).
v.
There was an introductory tenancy for twelve months
for a new tenant and if there were no issues that tenant would be confirmed as
a secure tenant and that tenancy could be for a life time.
vi.
Target rents were set against inflationary
calculation referenced in the Officer’s report for new build properties.
vii.
Different rules apply to Housing Associations, for
example they cannot offer a right to buy and have different interpretation of
what they consider to be an affordable rental level. Housing Associations were
aware that rents should remain affordable.
The
Committee:
Resolved (unanimously) to endorse the
recommendation.
The Executive Councillor approved the recommendation.
Conflicts
of Interest Declared by the Executive Councillor (and any Dispensations
Granted)
No conflicts of interest were declared by
the Executive Councillor.
Publication date: 21/05/2015
Date of decision: 01/01/2015