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Council tenants facing staggering 17 per cent rent increase
January 20, 2009 3:05 PM
Hard-pressed council tenants in a troubled Labour-run London borough are to suffer a staggering inflation-busting 17 per cent increase in their rents.
Despite angry protests at a meeting last night Lambeth Council's Labour Cabinet decided to raise the average rent by £12.01 per week from April with the likelihood of a further mid-year rise later on. Some tenants will be paying far more than an extra £12.01 depending on the size of their homes.
The rent increase, believed to be by far the biggest increase anywhere for social housing tenants in the country, had earlier been unanimously rejected at a series of consultation meetings, with tenants demanding a weekly increase of no more than £5.03.
Faced with the council's housing finances in meltdown and heading towards a possible £13 million deficit in the current year, the Cabinet even considered an alternative recommendation of an extra average £15 per week, equivalent to a 21 per cent rise. The decision to restrict the rise to 17 per cent will carry the risk the Cabinet accepted of "financial volatility up until 31 March 2010 that will need to be managed including the possibility of further savings and rent and/or service charge increases during the year."
The Council has already this year attempted to raise communal heating and hot water charges by an enormous 132 per cent, but in the face of fierce protest was forced to climb down and instead restrict the rise to 65 per cent, way above increases paid by other tenants and private residents and homeowners.
The Liberal Democrat opposition on the Council has laid the troubles firmly at the door of the current Labour administration which took over in 2006 with the Housing Revenue Account firmly in balance. "Tenants are being hit with these staggering increases at this difficult time as a result of incompetence and inaction by Labour which failed to recognise and deal with growing problems in the council's housing finances," said Liberal Democrat Housing spokesperson Cllr Jeremy Clyne. "And these enormous rises come at a time when private rents are declining and mortgage payers are seeing a cut in their payments."
"Only last July the Cabinet member Lib Peck put down an amendment at Council congratulating her administration for allegedly "balancing" the housing deficit. At about the same time the board of Lambeth Living, the arms length management organisation set up to run the borough's housing, was being assured that the account was in balance and the finances were improving. Then all of a sudden a huge black hole appeared."
Key to the Council's problems are some 1,000 empty properties costing the Council an estimated £5 million a year in lost rent and the failure to collect leaseholder service charges amounting to some £2 million.
Only this week the authoritative Inside Housing reported a rebellion brewing among councils and tenants over proposed rent increases of 6.2 per cent, more than double the 3 per cent rate of inflation and quoting a government spokesman as saying that the government's policies would "continue to protect local authority tenants so that increases will amount to no more than an estimated average of £3.95 per week"
With increases in Lambeth far exceeding these figures and with the administration of Lambeth housing in chaos the Liberal Democrats have written to Housing minister Margaret Becket calling for the department to be taken under Government supervision.
Claims that rents in Lambeth are the third lowest in London fail to take into account high charges for estates services such as cleaning and grounds maintenance which have been "depooled" from the rent. These are to go up by a further 5 per cent, way above inflation and not reflecting the actual increase in their cost.