An end to giant rent rises?

Good news for tenants
Good news for tenants

TENANTS will see an end to several years of high rent rises with an increase of just 2.2 per cent in 2015/16, a Wigan Council report says.

The document, presented to the Confident Places scrutiny committee, says the rise has been calculated on a new Government formula which adds one per cent to the consumer price index (CPI) level from September.

The change in calculation means those living in Wigan and Leigh Housing (WALH) properties will see their bills shoot up much less than in previous years, following rises of 7.37 per cent in 2011/12, 8.75 per cent in 2012/13, 5.59 per cent in 2013/14 and 5.6 per cent in 2014/15.

Local authority rents during the current fiscal year range from £65.95 per week for a one-bedroom property to £88.87 for a house with four bedrooms, considerably down on the rates charged in the private sector.

In the report Wigan Council director of economy and skills Steve Normington wrote: “Obviously the mention of any increase will largely be met in a negative manner, particularly in a climate where there are overall pressures on household incomes.

“However, this year’s maximum rent rise is lower than in recent previous years and the rent formula has changed to use the CPI, which is normally a lower-level measure of inflation than the retail price index (RPI) that had previously been used.

“The maximum level of rent rise needs to be applied in order to maintain services and maximise investment in the housing stock. If it is set at 2.2 per cent it would ensure income into the housing revenue account is maximised in order to deliver work programmes and frontline services to tenants.

“It must also be recognised that council rent levels are lower than in the private sector. Along with the work programmes, repairs services, the overall property standards and services tenants receive, council rents offer good value for money to tenants.”

The report says the rent rise was decided after recognising the difficulties household budgets face, especially with the changes to housing costs brought about the introduction of Universal Credit.

The council has also introduced a new housing transfer policy to find alternative homes for those worst hit by the so-called bedroom tax, extra financial casework for people struggling to pay their rents.