Thousands of Gentoo tenants across Wearside will see their rents cut from next month.
The housing giant is cutting rents for its 27,963 social properties by one per cent in line with Government policy.
The Welfare Reform and Work Act 2016 requires social and affordable rent levels to drop by one per cent a year from last April.
A one year exception for supported housing was announced in January 2016, and rents rose by inflation plus one per cent, but that exemption no longer applies and supported housing rents will also be cut.
The cut will see Gentoo’s average social rent cut from £80.47 a week at present to £79.66, a fall of 81p.
The maximum rent decrease will be £1.26 per week and the minimum will be 53p per week.
We are committed to building strong communities and delivering an outstanding service to our customers - with a firm emphasis on value for money.Nigel Tooby
Social housing accounts for 99 per cent of Gentoo’s stock. The firm’s approximately 200 non-social properties will see rents rise in line its rent setting policy. Service charges are also being reviewed.
Gentoo executive director of finance, Nigel Tooby, said the firm was committed to continuing its work across Wearside despite the impact of the rent decrease on its budget.
The business announced in October 2015 that it was cutting more than 300 jobs – nearly a fifth of its workforce - in order to save £18.3million a year.
“Our social rent levels are set by a Government formula that we apply as a regulatory requirement,” said Mr Tooby.
“The Homes and Communities Agency (HCA) also has clear guidelines, which all social housing landlords must follow.”
“The Welfare Reform and Work Act 2016 requires social and affordable rent levels to reduce by one per cent every year for the four years starting in April 2016, so this April will mark the second year of a 1% reduction in rents.
“Despite this series of rent reductions our long-term business strategy will be to ensure that Gentoo remains fit for the future and financially secure.
“We are committed to building strong communities and delivering an outstanding service to our customers - with a firm emphasis on value for money.”
* Gentoo has been handed more than £500,000 to help people get on the property ladder.
The Verve Partnership - in which Gentoo works with Teesside’s North Star and Northumbria-based Bernicia - has submitted a successful £3.9million bid to the Homes and Communities Agency (HCA) which will see 115 homes built across the North East over the next five years.
Gentoo’s share of the funding, which equates to £525,000, will be used to part-fund a pilot project around the shared ownership of fifteen new homes across the region.
The company, which owns and manages more than 28,000 homes across Sunderland, is currently building more than 500 homes both for sale and for rent across four new developments in city - Meadow View in Houghton, Castle Rise in Downhill, Thurcroft in Doxford Park, Hillcrag in High Ford and is planning a new forthcoming development in Glebe, Washington
Gentoo Group chairman Ian Self said: “We’re pleased the Verve Partnership bid to the HCA was successful. The funding Gentoo will receive as part of the bid will help us to pilot the shared ownership of new homes in the North East as part of the Government’s home ownership agenda.
“We remain committed to helping meet Sunderland’s diverse housing demands by building new homes for sale and for rent across the city, as our current development programme of more than 450 homes shows.
“We also have some exciting new plans which we hope to announce very soon – we’re very excited.”