Unsustainable rent increases
For the past four years Swindon Council has frozen Council Tax (CT) because the administration said they recognised the financial pressure that CT payers have been under. In contrast, over the same period it has raised rents of existing Council tenants by just under 24%, way above inflation. In addition, since 2011 it has automatically raised the rent for void properties (when a tenant dies or leaves) to the so-called ‘target rent’ associated with the ‘rent equalisation process’. So, for example, in 2012-13 rents overall increased by an average of 10.4%.
As well as above inflation rent increases some tenants have had to suffer both the loss of Housing Benefit owing to the ‘bedroom tax’ and a minimum payment of 20% of their CT previously covered by CT Benefit. We know that some face the proverbial choice between ‘eating and heating’. Indeed, an increase in reports of damp and mould led the Council to strike off a member of staff to deal with this problem exclusively.
The financial pressures that tenants are under is reflected in increasing rent arrears which would be even higher but for the ‘discretionary housing payment’ (DHP), bolstered by the special fund, with combined payments expected to be not far short of £500,000 this financial year. Continuing to set above inflation increases will simply push up the rent arrears as people struggle to cover all their bills.
A 2.2% increase doesn’t sound too bad compared to recent ones. However, it’s still 1% above inflation. In justifying it’s proposal the Council has used dubious methods. In their rent questionnaire on SurveyMonkey the Council offered no facts, only their opinion presented in such a way as to suggest that an above inflation increase was necessary. They said that if the rent was only raised by 1.2% then “many” tenants would not have their bathrooms or kitchens renewed. Of course, it’s no accident that they did not put a figure on this, because the phrase was meant to mislead tenants.
The Council has said that a 1.2% increase would produce a ‘shortfall’ of £400,000 on the housing budget for next year. What they neglected to mention was that according to a report to the last Cabinet, there would be an underspend on this year’s Housing budget, including an estimated £249,000 on the special fund for DHP.
Of course, it’s not so long ago, during the Housing Ballot, we were told that if tenants voted to stay with the Council then they would only be able to afford to renew 150 kitchens and 150 bathrooms a year for each of the next ten years. In fact, last year and this, the programme included around 530 kitchen replacements. For the next financial year they have managed a saving of £1 million on kitchens as a result of contract changes. So a 1.2% rent increase does not have to lead to a cut in the programme.
In justification of above inflation increases we have been told, don’t worry, ‘most tenants’ have their rent paid by HB. In fact only around one third of tenants have HB which covers their full rent, a third do not qualify or don’t apply, a third have part of their rent covered and pay the rest. Many tenants in work are in low paid and precarious employment, as can be seen by the 5,000 plus a year who move onto HB and 5,000 off of it, as their circumstances change. Above inflation increases simply pile the pressure onto tenants who receive no HB, or receive partial payments.
Swindon Tenants Campaign Group is calling for a 1.2% increase. The Council’s own Housing Advisory Forum has also supported this demand in recognition that tenants’ rents have been driven up above inflation for a long time. A 1.2% increase is easily manageable and should not result in a smaller programme. Above inflation increases are both unsustainable and unjust, and contrast sharply as they do with the CT freeze.
Secretary, Swindon Tenants Campaign Group
A letter to the Swindon Advertiser