Council housing rents to rise in Sunderland after increase approved by city leaders

Rent levels for council houses on Wearside are set to rise after a decision by city leaders this week.

Sunderland City Council’s cabinet of senior councillors has given the green light to housing rent levels for the 2024/25 financial year.

Since becoming a registered provider of social housing in November, 2019, the council has increased its stock and now owns and manages 138 homes, with more in the pipeline.

All rents are charged at an affordable rent level (80 per cent of market rent) in line with standards which dictate how social rents can be set.

Under Government policy, registered providers of housing can also increase rents by the consumer price index (CPI) – how much goods and services rise – plus one per cent every year.

Changes agreed by senior councillors this week will see new rent levels come into force from April 1, 2024.

Although the new rates represent a 6.7% increase, this is below the maximum rent increase of 7.7% permitted.

A report presented to Sunderland City Council’s cabinet on January 18, 2024, noted several factors had been considered in setting next year’s rent levels.

This included “financial constraints facing our tenants and an assessment of the future operating costs”.

Councillor Kevin Johnston, cabinet member for Dynamic City, told the cabinet meeting: “The option for rent increases has been considered for 2024/25.

“This will ensure that an appropriate rent increase is in place to respond to our landlord responsibilities, including things such as repairs and maintenance, capital programme sinking fund provision, housing operations and customer service needs, whilst also taking into account the current financial pressures faced by our residents.

“We are proposing a rent increase of the CPI only, therefore for 2024/25, this will be a 6.7 per cent rent increase.

“We understand this will affect our tenants at a difficult time with the cost of living crisis and our housing operations teams will be available to support and provide advice to any council tenant that needs it.

“There’s a wide range of financial wellbeing information also on the council’s website.”

It is understood that a written notice will be provided to affected residents in the coming months informing them of the rent increase.

The notice will use ‘gross rent figures’ which will not show housing benefits or housing elements on universal credit payments.

However, a cabinet report notes that “housing benefits awarded will be recalculated to take account of the new gross rent figure”.

According to the cabinet report, around two-thirds, or 85 tenants, are “in receipt of full benefit and will not see any rent increase as this is covered by their housing benefit”.

Elsewhere, 38 tenants would need to pay the full rent increase “as they do not currently receive any housing benefit”, while 15 tenants would “see some rent increase as they only receive partial housing benefit.”

The council report also outlines the reasons for the rent increase and the implications of failing to bring it forward.

The council cabinet report adds: “The housing service must be delivered to all tenants in the long term.

“This service is funded from rental income which needs to cover the ongoing costs of repairs and maintenance and long-term improvements to council tenants’ homes.

“A lower rent increase would compound a long-term problem in delivering future services as income will lag significantly behind service cost pressures and inhibit the council’s ability to meet the needs of tenants with regards to repairs and maintenance, future home improvement programmes and housing management service.

“This would create a position where the council would be at risk of not meeting the regulatory requirements set by the Regulator of Social Housing.

“Additionally, there has been consideration of the financial constraints facing our tenants and an assessment of the future operating costs and taking this into consideration the rent increase proposed for 2024/25 would be 6.7% and not at the maximum level permitted.

“The proposed increase is in accordance with the Government’s direction on the rent standard”.

More information on the rent increase plan can be found on Sunderland City Council’s website.