Archived decisions

Hampshire County Council

Executive Member, Policy & Resources Item

31 October 2006

Residential Properties - Review of Rents in April 2007

Report by the Director of Property, Business and Regulatory Services

1

Introduction

1.1

The County Council owns around 125 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 to new members of staff under the Council's Staff Temporary Housing Scheme. A small number of service tenants pay rent based on their salary rather than the rental value of the dwelling they occupy.

1.2

The County Council's policy has been to review residential rents each April. In doing so, regard is had primarily to changes in market values over the preceding period. In light of the nature of the stock of housing accommodation, regard is also had to any changes in rental levels in the public sector. In recent years, rents have increased by 3% in both 2003 and 2004, 2% in 2005, and there was no increase in 2006.

1.3

Reviewing rents on an annual basis supports the corporate strategy, and particularly maximising wellbeing, by ensuring that an appropriate level of rental income is generated for use in the proper management of the residential estate.

2

Recent Trends

2.1

The private letting market has seen only modest rental increases for some years now, with no increases being reported for a time last year. Demand for rental accommodation remains reasonably strong, with many potential first time buyers being unable to purchase in light of high prices. Generally, demand has been outstripped by supply, with particular growth in the Buy-to-Let market. Following this static period, there is now evidence of some increase in market rents and, whilst there are inevitably variations across the county depending upon location and type of accommodation, average increases over the past two years have been around 5%.

2.2

Setting of rents in the public sector for housing associations and housing authorities is determined by Government policy. This currently dictates that annual rent increases should be implemented based on the change in Retail Price Index plus half percent. This has meant that rents have increased by almost 7% over the past two years.

3

Proposals

3.1

It is proposed that rents in respect of County Council accommodation be increased by 5% with effect from 1 April 2007. This is consistent with the level of increases in the private sector since the last review, and is slightly less than the level of increase which has been seen in the public sector.

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 new members of staff. The proposed increase will keep County Council rents well below current market rents, reflecting the nature of the County Council's housing stock and the occupation arrangements. The increase will maintain County Council rents at an affordable level, when compared with the private rented sector.

4

Financial implications

4.1

The current annual rental income from the County Council's stock of housing accommodation amounts to approximately £450,000. The proposed increase of 5% would increase the current annual rental income to around £472,000.

Recommendation

That:

1

Rents charged in respect of County Council dwellings let to staff and other tenants be increased by 5% with effect from 1 April 2007.

LINK(S) TO CORPORATE STRATEGY

Yes

No

Hampshire safer and more secure for all

_

Maximising well-being

_

Enhancing our quality of place

_

This proposal does not link to the Corporate Strategy but, nevertheless, requires a decision because: It is necessary to ensure that an appropriate level of rental income is generated for use in the proper management of the County Council's residential estate.