Archived decisions

Hampshire County Council

Executive Member for Policy and Resources Item

7 December 2007

Residential Properties - Review of rents in April 2008

Report by the Director of Property, Business and Regulatory Services

1

Introductory Summary

1.1

This is an annual report which considers the appropriate level of rents to be charged to occupiers of the County Council's residential accommodation during the forthcoming year. It sets out the current position in both the private and public rented sectors and puts forward a proposal for an increase with effect from 1 April 2008.

2

Recommendation

That rents charged in respect of Hampshire County Council dwellings let to staff and other tenants be increased by 5% with effect from 1 April 2008.

3

Background

3.1

The County Council owns around 100 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.

3.2

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.

3.3

Over the past ten years, the County Council's rents have risen by 46%, equating to just under 4% per annum. This is broadly in line with rises in the public sector generally over the same period, and slightly below rises in the private sector. Steeper rises were seen in the first five years of this period with somewhat lower rises during the past five years.

4

Recent Trends

4.1

After a lengthy period of modest rental increases, the private letting market has seen steady growth in rental levels over the past year. Recent interest rate rises and a generally cautious climate amongst first time buyers has meant strong demand for residential properties in the lettings market. This has translated into rental increases which inevitably vary across the county but are at least 5% and somewhat higher in some locations.

4.2

The setting of rents in the public sector by 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 ½%. This has meant that rents have increased by just under 5% over the past year.

5

Proposal

5.1

It is proposed that rents in respect of Hampshire County Council accommodation be increased by 5% with effect from 1 April 2008. This is consistent with the level of increases in both the private and public sectors since the last review.

5.2

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.

6

Financial Implications

6.1

The current annual rental income from the County Council's stock of housing accommodation amounts to approximately £420,000. The proposed increase of 5% would increase the current annual rental income to around £440,000.

LINK(S) TO CORPORATE STRATEGY

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