Government announces cuts in rent increases for council tenants
Coming soon will be more information about the Governments 2009 / 10 cut in rent increases. We are currently working on more detailed information on this recent announcment and how this will affect you, we will be annoucing this shortly on our website.
Over the last few years rent increases for all local authority tenants are worked out using a national formula agreed by the Government. This is to ensure that:
- rent for local authority properties remains affordable and well below those in the private sector;
- rent levels for local authority properties is fairer and less confusing for tenants;
- there is a closer link between rent and the qualities which tenants value in properties; and
- differences between the rent set by local authorities and Registered Social Landlords (RSL) is removed.
The national average increase for 2009/ 10 was 6.2% but in Barnsley it was worked out to be an average 6.5% increase. This is because, traditionally, rents in Barnsley have been much lower than the national average and so to bring them in line with the new national rent setting formula, rent levels in Barnsley have had to rise at a higher rate than in some other Local Authorities.
The national guideline rent increase for 09/10 was set in September 2008 at a time of much higher inflation. However, the Housing Minister, Margaret Beckett announced on 6th March 2009 that the government intended to cut the national average 6.2% increase by half to a national average 3.1% increase for 2009/10. This will support tenants during the current economic uncertainty.
Barnsley Council, like all other councils across the country is awaiting further guidance from the government on the revised rent increase formula so that Berneslai Homes can implement this reduced rent increase for its tenants as soon as possible. This is expected in the next few months.
Unfortunately this positive announcement from the Government came too late to prevent Berneslai Homes sending out the annual April rent increase notices to its tenants based on the previously agreed rent increases. By law they have to give four weeks notice of a rent increase.
They are advising tenants that from 6th April 2009 they will need to pay the rent as stated on their rent increase letter.
Berneslai Homes’ Director of Finance, Alison Rusdale says of how the reduction will be passed on to tenants. “It’s not as simple as cutting the rent increase by half, we have to follow a new national formula and the percentage rent increase will vary across all our tenancies. All of our systems have been amended to reflect the previously agreed rent increase and so all of this will have to be changed again. As soon as we have the guidance from the Government, we’ll be working hard to pass on this reduced rent increase on to our tenants in the shortest possible time.”
This government decision on rent increases does not affect things like service charges or heating charges or the charges made for sheltered housing and the warden service.
In 2009/10 the Council increased service charges to reflect the agreed average rent increases. They are considering reducing these charges in the light of the government announcement on rents.
Heating charges will be unaffected as the Council made the decision that in 2009/10 there would be no increase from the 2008/9 charges.
Tenants are being asked to pay their rent as stated on their recent rent increase letter. As soon as the details regarding the reduced rent increase have been worked out Berneslai Homes will write to all tenants with a personal breakdown of how the reduced rent increase will affect them.
END