Archived decisions

HAMPSHIRE COUNTY COUNCIL

Decision Report :

EXECUTIVE SUMMARY

1) Summary of decision area:

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.

2) Issues covered in report:

2.1. The report sets out the background to the County Council's ownership of the residential portfolio and the occupation arrangements which exist. The report also explains the current position in both the private and public rented sectors in terms of recent and expected changes in rental levels. A proposal is put forward for an increase in rent for the County Council's residential properties with effect from 1 April 2009.

3) Recommendation:

3.1. That rents charged in respect of Hampshire County Council dwellings let to staff and other tenants be increased by 4% with effect from 1 April 2009.

MAIN REPORT

1) Purpose of the report:

1.1. The report considers the appropriate level of rents to be charged to occupiers of the County Council's residential portfolio 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 2009.

2) Background:

2.1. The County Council owns around 100 dwellings which produce a current annual income of approximately £440,000. The dwellings 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.

2.2. The County Council's policy has been to review residential rents each April. In undertaking a review, consideration is given to changes in market values over the preceding period, the stock of housing accommodation, and any changes in rental levels in the public sector.

3) Recent Trends:

3.1. There has been an increase in rental levels in the private letting market over the past twelve months. Falling house prices and the difficulty in obtaining mortgage finance has lead to marked reductions in activity in house sales, and many would-be purchasers have turned to the rented sector thereby increasing demand. The poor market conditions have also resulted in some sellers deciding to rent out their property thereby helping to meet this demand, although the net effect is upward pressure on rental values. The increase in rental levels inevitably varies across the county but are generally in the order of 3%-5%.

3.2. 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 0.5%. The Retail Price Index has fluctuated quite significantly during the course of this year but the latest reported figure, to October, shows an annual increase of 4.5%. On this basis, increases in rents this year can be expected to be in the order of 5.0%.

4) Proposal:

4.1. It is proposed that rents in respect of Hampshire County Council accommodation be increased by 4% with effect from 1 April 2009. This is consistent with the level of increase over the past twelve months in the private rented sector and a little below the level of increase that can shortly be expected in the public rented sector.

4.2. 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.

5) Recommendation:

5.1. See Executive Summary - paragraph 3).

CORPORATE OR LEGAL INFORMATION:

COMPREHENSIVE RISK & IMPACT ASSESSMENT:

Race and equality impact assessment

Race and equality impact assessment has been considered in the development of this report and no adverse impact has been identified.

Crime prevention issues

The County Council has a legal obligation under Section 17 of the Crime and Disorder Act 1998 to consider the impact of all the decisions it makes on the prevention of crime. The proposals in this report have no impact on the prevention of crime.

Climate change

The potential impact of these proposals on climate change has been considered and no impact has been identified.