Council house tenants in Newcastle will be hit by a 7% hike in their rent bills.
City decision-makers agreed on Monday to impose the major cost increase for thousands of renters living in Your Homes Newcastle (YHN) properties, in another blow to people struggling with the cost of living crisis.
Residents affected by the changes are expected to see average increases in their weekly rent costs of between £5 and £6.60 from April, while service charges and garage rentals also being put up by 7% too.
Labour councillor Paul Frew told Newcastle City Council colleagues on Monday that the decision to go for the highest possible rent hike allowed by the Government was “not taken lightly”, but was in line with most social housing providers across the country.
A council report warned that there are “significant challenges” in maintaining Newcastle’s social housing stock to a safe standard, particularly in tackling the mould and damp problems highlighted by the tragic death of two-year-old Awaab Ishak in Rochdale.
Coun Frew, the local authority’s cabinet member for finance, said: “We are very conscious of the impact this could have on people. But there is an absolute need to maintain and invest in our housing stock.
“We need to invest in housing stock to address damp and mould issues where they occur, to improve people’s homes to proof them against these. We need to invest in people’s homes to improve insulation so that they are warmer and [tenants] are spending less on their energy bills.
“And we need to continue investing in our stock for a better quality of life for our tenants, something we all aspire to in this room I’m sure.”
Coun Frew said that more than 70% of tenants, almost 18,000 people, will be “very insulated” from the rent hike, as the extra cost will be met by their housing benefit or Universal Credit payments.
However, there are just over 6,000 YHN residents who fund their rent payments entirely from their own incomes, a group which Lib Dem councillor Doreen Huddart warned will include many elderly and disabled people.
The council announced it would be setting aside £250,000 to help people struggling to pay their rent.
However, details on how that money will be dished out have not been confirmed – with council leader Nick Kemp saying the authority was working to discover people who are likely to be “close to a tipping point” and could be pushed further into difficulty by the price rises.
At Monday night’s cabinet meeting, Lib Dem opposition leader Colin Ferguson asked why the maximum rent rise allowed was being pushed through when the council had managed to avoid increasing council tax by the biggest amount allowed by the Government.
Coun Frew replied that finance bosses had looked at smaller rent hikes but they would have left the council’s cash reserves “too close for comfort”, while 7% is “necessary to get us to a stable position in the Housing Revenue Account in the next three years”.