Hampshire County Council

Executive Member, Policy & Resources Item

12 December 2001

Residential Properties - Review of Rents in April 2002

Report by the Director of Property, Business and Regulatory Services

1

Summary

1.1

The following decision is sought:

That rents charged in respect of County Council dwellings which are let to staff and other tenants be increased by 4% with effect from 1 April 2002.

2

Reason(s)

2.1

The County Council has traditionally reviewed the level of rents that are charged to its residential tenants on 1 April each year and it is proposed to do so this year. The proposed increase of 4% takes account of research undertaken into the general rise in rents in both the public and private sectors over the last 12 months.

3

Other options considered and rejected

3.1

Not applicable.

4

Conflicts of interest declared by the decision-maker or a member or officer consulted

4.1

None declared.

5

Dispensation granted by the Standards Committee

5.1

Not applicable

6

Reason(s) for the matter being dealt with if urgent

6.1

Not applicable

Approved by:

..........................

Date of decision:

.........................

Councillor T K Thornber

Hampshire County Council

Executive Member, Policy & Resources Item

12 December 2001

Residential Properties - Review of Rents in April 2002

Report by the Director of Property, Business and Regulatory Services

1

Background

1.1

The County Council owns around 140 dwellings, which are let to occupiers under a range of different tenancies. Most are occupied either by an existing member of staff such as a caretaker under a service tenancy, or by a private resident under a secure tenancy protected under the provisions of the Housing Act 1985. There are a small number of dwellings which are made available for letting to new members of staff under the Council's Staff Temporary Housing Scheme.

1.2

The Land Sub-Committee at its meeting in January 1990 resolved that the level of residential rents should be assessed by reference to market values rather than on a `fair rent' basis as was the practice previously. A significant increase in rents was implemented at that time, the increase being phased-in over a number of years for existing tenants. In recent years, rents have been increased by 5% in April 2000 and 4½% in April 2001. It should be noted that there are some service tenants who pay rent based on their salary rather than the rental value of the dwelling they occupy.

2

Recent Trends

2.1

The steady increase in rental levels in the private letting market seen during the past few years has continued during the last 12 months. There continues to be a good supply of properties available in this sector and demand also remains relatively strong. Rises in rental levels during the last year have varied across the county depending upon the type of accommodation and location, but increases have typically been in the region of 4% - 8%.

2.2

The setting of rents in the public sector by housing associations and housing authorities is not market lead. Property owners in this sector are restricted in their ability to increase rents and for some years now this has been linked to a little above inflation. Generally, increases imposed by housing associations and housing authorities over the last 12 months have been around 3%.

3

Proposals

3.1

It is proposed that rents in respect of County Council accommodation be increased by 4% with effect from 1 April 2002. This is consistent with the policy linked to the private rented sector, is in line with the lower order of increases in this sector and is only slightly above the level of rent increases imposed by housing associations.

3.2

It should be recognised that the County Council is not in a true market position, with its properties occupied by a mixture of secure tenants, service tenants and Staff Temporary Housing Scheme tenants. The proposed increase will keep County Council rents well below current market rents, reflecting the nature of the Council's housing stock and the occupation arrangements. The proposed increase of 4% will maintain the County Council rents at an affordable level, in comparison with the private rented sector, including the small percentage of the County Council's housing stock which is available for letting on short-term tenancies to new staff.

3.3

In accordance with established procedures, it is intended that Unison be informed of the proposals.

4

Financial Implications

4.1

The current annual rental income from the County Council's stock of housing accommodation amounts to approximately £430,000. The proposed rental increase of 4% would increase the current annual rental income to around £447,000.

Recommendation(s)

That:

Rents charged in respect of County Council dwellings, which are let to staff and other tenants be increased by 4% with effect from 1 April 2002.