Agenda item

Matt Sanham introduced the report and said that Cabinet had agreed on an ambitious housing development programme, which now needed to be funded through the annual budget allocation.

Councillor Whitehead made the following comments:

• In order to explain the rent structure and context of the HRA budget further, it was important to look at what was currently being delivered and what needed to be delivered in terms of capacity;
• TDC used two forms of rental rate within the general housing stock; social rent and affordable rent;
• The Council’s version of affordable rent was very different from the central government definition, which generally defined affordable rent as being up to 80% of private rental rates. For Thanet, that would be far from affordable. TDC therefore used a dual definition; affordable housing was classed as up to 80% of private rent, but not to exceed Local Housing Allowance rate (which historically for this area never met 80% of the private rental market). Simply, Thanet’s affordable housing would never go above Local Housing Allowance;
• The vast majority of the Council’s housing stock was at social rent; social rent was a lower rent than affordable rent, and much lower than private market rent;
• At a social rent, a three bed house would cost approximately £452.52 per month; at TDC affordable rent, it would cost approximately £704 per month;
• On the private market, three bed homes were currently renting at between £1,100 and £1,600 per month;

• The current Local Housing Allowance rate for a three bed house was £797.81, meaning that for both forms of rental that TDC offer would be more than covered by housing benefit/universal credit, making both accessible for even the most vulnerable or disadvantaged residents. It was worth noting that the vast majority of individuals who rely on LHA to afford their housing were currently trapped within the private rental market. This was one of the principal reasons for creating and adopting the accelerated delivery programme, as the most disadvantaged residents in terms of housing affordability (and therefore cost of living) were currently within the private sector; to help them the Council had to expand its provision;
• In April the Council was also likely to see a significant increase in the LHA rate; in all likelihood this would mean that even the affordable rental would fall within the mid range of LHA; 
• The Council portfolio currently consisted of 3,460 properties; only 165 of these were at an affordable rent; the rest were let at social rent. The vast majority of the residents had access to support with rental costs through housing benefit or the housing element of universal credit, and therefore any increase was covered by benefits in those cases;
• Each year, councils were permitted to raise rents, with the addition of 1% to the Consumer Price Index. This September CPI stood at 6.7%; which meant that Councils were permitted to raise rents by 7.7%. Information received from 19 other Councils regarding their rent increase this year indicated that all were planning a 7.7% increase. The Regulator for Social Housing had confirmed the 7.7% limit for 2024/25;

• Last year Council increased rents across both tenures at 7%; this was a below inflation increase. Two year inflation stands at 16.8%, and TDC was potentially increasing rent by 14.7% across two years. That meant that Thanet was currently 2.1% below inflation over two years, even with a 7.7% increase this year. The Tenant and Leaseholder representatives had been briefed on the potential for a 7.7% increase. They were very supportive as they were aware of the need to expand and support those residents in the private sector, and also supported further expansion of the Council’s in-house temporary housing;
• Although these decisions were made yearly, it was important to remember that they had a cumulative effect. Choosing not to increase rent this year would not only reduce housing funding for this year, but would reduce it in perpetuity, as the Council could not choose to raise the rent to “make up” for it the next year;
• It was also important to remember that this increase, apart from households that receive no assistance with housing benefit or the housing element of Universal Credit, did not come from resident’s pockets; it would be paid by the central government, as the increase was still well below the full rate of Local Housing Allowance;
• The Portfolio Holder for Housing had put forward an option that they considered provided the best outcome for both current tenants and all residents in terms of growing housing provision. Increasing at 7.7% across both forms of tenure, but providing a support fund to ensure that any households on a lower income, whose increase was not paid through benefits were not impacted, allowed the Council to support more residents in the private sector, grow the portfolio further, and not disadvantage current tenants. The predicted net cost of this option in 2024/25 was £30k;
• The Council would administer and determine support, assessing those who had no access to benefits and on a low income as eligible for support;
• The fund could be used in a range of ways to support households facing financial hardship.
• It was essential to consider the fact that the most vulnerable residents currently were those who were homeless, struggling to afford private rent, and in insecure tenancies. In only four months the Council had been able to add 123 extra properties to its portfolio to support these residents. However, to continue supporting others in vulnerable positions, it was vital that the portfolio was maintained and grown.

Members then asked questions and made comments as follows:

• The proposals in the HRA budget looked solid;
• Was the Council up to date with rent reviews for non dwelling properties?
• How were rent reviews done for the garages and shades? Some Members had received some complaints regarding the new rent levels;
• There were also some issues with some of the garages. It was important for the Council to look after these properties;
• Another Member said that they welcomed provision for social housing. They further said that a robust social housing programme had financial benefits. Hope many of these houses that had been bought by TDC were now occupied?

Councillor Yates said that he would look into the issue of garages that needed attention.

Bob Porter and Councillor Whitehead responded as follows:

• A thorough review of commercial properties t that included garages was conducted last year and it was quite unpopular as rents were increased;
• Officers would come up with information on how many of the new homes h were now occupied;
• The Council was not looking to increase rents for non dwelling properties in 2024/25.

Members noted the report.