By Joe Locker, Local Democracy Reporter
Nottingham City Council is planning to increase rents for council house tenants by up to 7.7 per cent due to rising costs.
The authority owns and maintains 24,756 homes in the city and is proposing a rent increase for all tenants for the 12 months beginning April 2024.
On top of this the council says it is proposing a rise in service charges of 6.7 per cent and a seven per cent increase in garage rents.
Recent figures suggest around one in four council tenants will be impacted, largely due to many tenants receiving housing benefits which cover the cost of the rise.
The new charges are expected to be approved during an Executive Board meeting on February 13 and will come into force from April 1.
“The operating environment remains challenging with the cost-of-living crisis, rising interest rates, economic uncertainty and financial risks due to the long-term effects of the pandemic, global supply chain issues and other cost pressures,” council documents say.
“To help maintain and protect levels of service and the future sustainability of the HRA the budget includes a rent increase of 7.7 per cent in line with the Government’s current rent policy.”
The Government regulates how much social housing rents can increase each year through caps.
Without the most recent cap rents could have increased by 11 per cent in line with inflation.
It is expected the rent increases will grow revenue by £6.217m.
Rents from housing will bring in £114.342m in 2024/25, other properties including garages £2.746m, service charges £11.205m and other income around £222,000.
This means the council expects to bring in an income of £128.514m.
However significantly higher maintenance costs, largely due to inflation and material prices, as well as pay rises for staff mean the total expenditure is expected to be around £110m.
The council says it has a legal duty to keep the Housing Revenue Account (HRA), money from which goes towards housing, solvent.
“The rent and service charge increases are necessary to ensure the long-term sustainability of the HRA budget and the investment needed to maintain properties to required regulatory standards,” documents add.
It is assumed that for 2024/25, repairs and maintenance inflation will increase by 15 per cent but will reduce to 3 per cent in subsequent years.
“This is a very conservative figure as materials costs have risen 43 per cent in two years, while labour costs are up by nearly 10 per cent,” the documents say.
Documents highlight the current high level of disrepair claims are a “reflection of underinvestment in the past and will require a substantial amount of investment in the future”.
Furthermore the council anticipates here will be 260 right-to-buy sales each year based on current numbers, over and above the numbers of new homes being built and so housing stock is diminishing.
