Agenda item

(HRA Service Director) To receive a verbal update of the types of rents charged for social housing and the context.

D Fenton (Service Director (Housing Revenue Account)) provided an update on the types of rents charged on the Council’s tenanted properties. This was in response to a member’s question from a previous meeting. There were two types of rent, social rent and affordable rent and these were governed by the Rent Standard, which was set by the Social Housing Regulator. The Government had set affordable rent several years ago to allow housing providers to charge a higher, but discounted rent at 80% of market value. This was so that the extra income above the social rent could be ringfenced to use for further housing developments. All the rents on the Council’s new houses were charged as affordable rents. If they were not it would be difficult, because as a housing provider the Council carried out financial feasibility studies on all the proposed housing projects, so that whatever was built, did not contribute to breaking the HRA Business Plan. If the Council charged social rents on new builds, without substantial grants from Homes England, it would break the HRA Business Plan. Affordable rents were also charged on any buybacks of street properties owing to the financial viability just stated. Social rents were much simpler as they were set using a formula provided by the Social Housing Regulator. Social rents were usually increased every year.

The Committee asked the following questions of the HRA Service Director.

What was the difference between affordable rent and social rent on properties, for example in Loughton? D Fenton replied that she would provide some comparisons, for publicising in the Bulletin.

When people bid, did it affect their bidding as people might be able to afford social rent, but not affordable rent, so was there any evidence that it influenced how people bid and was that information available in the bidding process? D Fenton replied this information was always provided in choice-based lettings literature. The type of rent being charged would influence how people bid but the majority of Council properties were charged at social rents. The Council had not entered into a contract with Homes England to instigate ‘conversions’, where all empty properties or voids were converted into affordable rents, and had no plans to do this, so there would be both affordable and social housing in the future.

Did the Council only charge affordable rents on new builds or buybacks? D Fenton explained yes, but the Council did not always charge 80% of market value, which was the upper level, to ensure all rents were compatible with the Housing Allowance.

Why had a written report not been provided because it was more difficult to scrutinise a verbal report? D Fenton offered to provide a retrospective written report for the minutes if this helped.

RESOLVED:

That the verbal report be noted.

Actions:

(1)          That the HRA Service Director would provide some comparisons between affordable rent and social rent on properties, for publicising in the Bulletin; and

(2)          That the HRA Service Director would provide a retrospective written report for the minutes, if this helped.

(Post meeting update: In response to action (2) above, please see attached Briefing Note for information entitled – Rent types changed for social housing within HRA)).