Council tenants in Tower Hamlets face a “difficult” rent increase this year, a leading councillor has admitted.
Draft budget proposals suggest increasing rents by 4.8% from April. Green Party opposition councillor Natalie Bienfait questioned the rise during a meeting to scrutinise the budget proposals yesterday (12 Monday).
Cllr Bienfait said: “I think this is a really hard thing for our residents.”
She also asked council leaders “how you’re justifying such a hard increase while everything else is going up”.
Aspire Party councillor Saied Ahmed said the proposed rent rise was a “standard increase”. The 4.8% rise is the maximum allowed for social housing, which is capped at 1% above the CPI rate of inflation.
If approved, the average weekly rent for a three-bed council home would rise by £7.55, from £157.35 to £164.91.
Council papers say the housing budget is “experiencing unprecedented increases in its costs resulting from Brexit, Covid pandemic and cost of living crisis following the war in Ukraine”.
They also say new housing safety laws are “placing further pressure on resources”.
Council housing budgets are separate from their main budgets and have to be self-funded. That means their funding can only come from council housing income, and not council tax or business rates.
The budget papers say the rent rise “will maximise the ability of the council to invest in the housing stock, both in the existing property portfolio and new build schemes”.
Responding to Cllr Bienfait, senior Aspire councillor Saied Ahmed, responsible for finance, said: “We understand that any sort of increase is difficult on our residents.”
However, Cllr Ahmed said that for many tenants, the rent rise would be covered by housing benefit or universal credit contributions, and that the council would also set up a £400,000 hardship fund that tenants not eligible for benefits will be able to apply for.
He added that the rent increase would help pay for repairs and improvements, “making sure that the windows and doors are good, making sure that they have decent homes, making sure that damp and mould is controlled”.
The final budget is set to be voted on at a meeting of all councillors on Wednesday, 25 February.
