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Housing Revenue Account Rent Setting Policy

Meeting: 14/01/2015 - Housing Scrutiny Committee (Item 38)

38 Housing Revenue Account Rent Setting Policy pdf icon PDF 97 KB

Minutes:

This item was chaired by Diana Minns (Vice Chair /Tenant Representative)

 

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.