Newark and Sherwood District Council approve 7.7% rent increase for social housing despite opposition amendment for 6.7%

A council has increased its social housing rent by 7.7% — the maximum amount allowed.

The rise was deemed necessary due to what the leading coalition of Labour, Liberal Democrats and Independents for Newark and District claimed was years of under-funding and rent freezes from the Conservative government, and new costs being charged by social housing regulators.

Housing portfolio holder Lee Brazier explained that the increase of just 5% last year meant the council’s rent had fallen behind, and was still considerably lower than housing associations and market rent.

The rent increase equates to an average of £6.71 extra per week, with higher costs per number of bedrooms. It will mean the cost of rent for a one-bedroom property will rise from £78.80 in 2023 to 2024, to £84.87 in the 2024 to 2025 budget.

For a four-bedroom property this increase will be from £100.25 to £107.97.

Mr Brazier also highlighted the council’s £50,000 commitment to a scheme to help residents downsize to avoid them paying for unused space and ensure the best use of council properties, as well as further support for the third of council tenants who pay the full cost of rent.

A heated debate was held at the recent full council meeting of Newark and Sherwood District Council after a last-minute amendment of a 6.7% increase was proposed by the Conservatives, but ultimately rejected.

The opposition said the 6.7% increase would still raise enough funds for the housing budget, with £244,100 less towards the major repairs reserve, while showing care towards residents during an ongoing cost-of-living crisis.

The amendment was presented by Tim Wendels, who said: “We’re still in the midst of a cost-of-living crisis. Members will recall that last year, with inflation at 10.1%, the government restricted rent increases to 7%.

“However the Conservative administration at the time, wanting to protect out tenants… from an unaffordable rent increase on top of huge financial pressures which they were already facing, chose to charge only a 5% increase.”

He said the party recognised the financial pressures on tenants, and “chose to help them”. At the time, he explained, the Labour opposition chose to put forward an amendment for a 3% increase.

“The rent increase proposed this evening is 3.7% above the current rate of inflation,” Mr Wendels added.

“Has the cost-of-living crisis gone away… or is it the case that its the Conservatives on this council that truly care about our tenants?”

He suggested council leader Paul Peacock was showing his “true colours” now Labour are in power and described the increase as being “like a kick in the teeth” for tenants.

The amendment was seconded by Conservative leader Rhona Holloway who said she was “surprised” by Mr Peacock’s proposal considering his push for lower rent the previous year.

Deputy leader Rowan Cozens said the increase was a result of a lack of government funding and rent freezes which have “a major impact on finances going forward” and cited a remaining £150,000 left in the council’s hardship fund which could help struggling tenants..

She said: “We operate a very tight budget, and decisions made about finances are never easy ones. This raise, we’re talking £6 to £7 a week for people its a enormous amount of money. That’s a meal — but why are we in that state?

“We have to look ahead, we have present a viable financial way forward. This has not been an easy decision, of course it hasn’t.”

Leader Paul Peacock argued that his calls for reduction in rent increases last year was due to “slack” in the Conservative’s budget, and he said there is none in the current spending plan.

He added: “Your idea is to take £240,000 from the major repairs reserve… lets bear in mind what has happened to that reserve for the last five years when Conservatives have been in charge. You’ve spent £18.3 million of it. Not just that, for the five previous years you put in more through the budget than what we’re suggesting now… and yet you’re saying to us now that that’s not important.”

He explained that the council still needed to have ambitions to build more homes, but would now need to purchase land — which reducing the funds for housing would impede.

Mr Peacock accused the opposition of “opportunism” in putting forward the amendment, but admitted he “would probably be saying similar things” if he were the opposition.

Emma Oldham added that her main concern was for the welfare of tenants, tackling issues such as mould, damp, and energy efficiency, which require funds, while multiple councillors supported the 7.7% increase but requested that tenants be clearly signposted to support if they needed it.

Roger Jackson spoke in support of the 6.7% increase, and suggested the message it would send out to tenants would be beneficial.

Lee Brazier summed up the need for a 7.7% increase, and explained the council was looking at a £2million a year figure to maintain the state of its housing stock, would need to buy land to build more housing, and was facing additional costs from the regulators which the authority hadn’t faced before.

He said: “If we don’t do this now, our tenants will suffer further into the future.”

The amendment was not carried, with 21 votes to 13, and the original 7.7% increase approved with the same distribution of votes.

The vote also approved the Housing Revenue Account budget and a rise in service charges for the year ahead.