Council house tenants in Newtown will see their rents increase by more than 2.4 per cent from April onwards as part of county-wide increases.
Powys County Council’s cabinet agreed to the proposals that were put forward by Cllr James Evans the Cabinet Member for Corporate Governance, Housing and Public Protection.
The increase in rents included other tenancy related rents such as garages and are in addition to the 9.5% council tax rise.
Cllr Evans said: “The report sets out the proposed increases to council housing rents, garage rents and all property and tenancy related charges.
“The Housing Revenue Account (HRA) is made up of income from rents and other housing related charges. It is used to fund all HRA landlord related services including salaries, central service recharges and all services delivered to our tenants.
“It also underpins our ability to deliver a balanced and sustainable HRA business plan through financing the borrowing we draw down to invest in our stock and develop new homes.”
According to the report, the rent increases are vital to the 30-year Housing department business plan.
It states: “If rents are not increased annually our 30-year business plan will not be affordable, we will not be able to meet our investment commitments, nor will w be able to continue to provide high-quality services to tenants and leaseholders.
According to the report if the rents are not increased, the Welsh Government will not receive a Major Repairs Allowance worth £3.7 million in capital funding each year.
The Welsh Government sets target rent bands to make sure that local authorities and housing authorities set reasonable rents and PCC rents have slipped below the target line and this situation needs to be rebalanced.
Cllr Evans added: “It is imperative we close the gap between the target rent and the actual rent.
“The cabinet could consider a higher or lower rent increase however the rent would start to challenge affordability and lower rents would put the long term investment plans at risk.”
Despite the council increasing rents by more than the guideline rent figure each year for the last two years the council’s HRA rents have fallen outside of the target rent band for each of the last three years, this year’s rents are £1.30 below the target rent band.
The Welsh Government allows for a maximum increase of 2.4 per cent plus up to an extra £2 a week for local authorities below the target rent band.
• From April 2019 PCC will increase rents by 2.4 per cent plus £1.30 which will effect 3,518 homes.
• For 174 homes it will increase by more than 2.4 percent plus £1.30 but less than £2.
• For 1,608 homes the increase will be 2.4 per cent plus £2 a week.
• Gypsy sites will be hit rising to £101.04 a week from £97.40.
The Tenant Scrutiny Panel will be told of the increases and tenants will need to be given 28 days notice of the changes.
By Elgan Hearn, Local Democracy Reporter, Local Democracy Service
