RENT for council housing in Rugby is set to rise by around £330 a year, after proposed increases were capped at seven per cent for 2023-24.
The rise will see average bills go up by around £6.36 per week, bringing the weekly total to around £97.28 – a yearly cost of £5,058.
The increase has been capped to help tenants struggling in the face of the cost of living crisis. The government has set the cap, meaning Rugby Borough Council will not be able to increase rents in line with the normal guidance of inflation plus one per cent, which would have seen a massive 11.1 per cent increase – an extra £524 a year.
As a result, the council’s income for reinvestment and debt repayments will be reduced by at least £1.8million over the next five years.
Sixty-eight per cent of council tenants currently receive help with their rent in the form of Universal Credit or Housing Benefit.
A financial update report to RBC’s cabinet also shows that a loan secured for the redevelopment of council flats at Biart Place and Rounds Gardens at an interest rate of 1.4 per cent is currently earning interest at 4.42 per cent – which RBC says vindicates its decision to secure a loan from the Public Works Loan Board at a low rate before interest rates increased.
The report shows the council remains the lowest-cost landlord in the borough, with rents for a one-bed property around £5 per week cheaper than a housing association, and around £55 per week cheaper than private sector rent.
The report also includes proposals for replacement kitchens and bathrooms, acquisitions and repairs budgets, and plans to deliver insulation and other energy efficiency improvements which will help both with bills and to help to deliver on the council’s climate change commitments.
These are set to be approved by councillors when they set the Housing Revenue Account budget for 2023-24 at a meeting to be held in early February.
RBC communities and homes spokeswoman Coun Emma Crane said: “The information presented in this report shows that we are in a good position to continue to invest in improving our homes.
“While the decisions will be made by councillors in February, the data shows that we will be able to continue our programme of improvements and investment in new and replacement properties.
“And, while we understand that any increase in rent will be unwelcome, more than two thirds of our tenants will have all or part of their rent paid by Universal Credit or Housing Benefit.”