South Derbyshire council tenants will see their rent rise to an average £70 per week during the 2012/13 financial year.
Members of South Derbyshire District Council’s Housing and Community Services Committee discussed and debated proposed rises on Thursday.
The move comes as the authority moves towards a new financing system where it is expected to follow a national rent setting framework taking into account inflation and management, repairs and maintenance costs.
It will mean that council households face an average increase, in line with other authorities across the country, of £5.49 each week. However, sixty five per cent of South Derbyshire’s 3,043 tenants will have this partly or fully paid through Housing Benefits.
Tenants, who have been named among the most satisfied in the UK with the services they receive, have been kept in the loop throughout the decision making process via the Business Plan Working Group and the Housing News magazine.
South Derbyshire rents are still seven per cent below the national formula, lower than the 12 other social housing providers operating in the District and half the cost of private accommodation.
Cllr John Lemmon, the Chairman of Housing and Community Services at the District Council, said: “South Derbyshire District Council has long been committed to helping local people to live in good quality affordable housing.
“This year, the national framework has made it clear we need to enter into the new self financing system with a sufficient base income to manage the debt we will incur and meet the ongoing capital investment needs of the stock.
“The decision to increase rents has been made reluctantly. We have worked hard to arrive at the best solution for everyone concerned to ensure we continue to offer a high quality, good value for money service into the future.”
Unlike at present, the new self financing proposals allow councils to keep all rents and use them to pay for management, repairs and investment in homes.
As part of this, a one off portion of the national Housing Revenue Account debt is to be given to each authority.
In the case of South Derbyshire, this means £57.423 million plus interest will need to be repaid over 30 years from April. This is compared to the estimated cost of staying in the current system of £135 million.
The additional funds available will be used to maintain and improve standards. This includes upgrading bathroom facilities in all households over the next five years and making special adaptations for disabled people.
Tenants will continue to be involved as the process moves forward.
