Corby Council is warning that unless there is a significant rent increase for its tenants in coming years the long-term viability of its housing stock could be put under pressure.
Councillors are expected to approve a government-enforced one per cent rent reduction for council house tenants at its budget meeting on Wednesday (Feb 27).
This will be the fourth year in a row the authority has had to reduce rents which has impacted on the amount of repairs the authority has been able to carry out on its 4,700-home stock and also reduced its housing capital programme.
The authority says that in order to fund the rent reduction it has had to reduce its housing capital programme by £700,000 each year. All funds that come into the council as part of its landlord role go into the ring-fenced housing revenue account.
At the One Corby Policy meeting last week (Feb19) leader of the Labour-run council Tom Beattie said the Conservative government had not imposed the rent reduction out of the ‘goodness of its heart’ but rather to reduce its welfare benefit spend.
Currently the average rent for Corby tenants is £80 per week, which is the lowest in the county and £6 a week less than the national average. More than half of tenants receive full housing benefit.
The council bought its housing stock from the government in 2012 at a cost of £71m. This will be paid back over the next 30 years.
Speaking at the One Corby meeting chief finance officer Adrian Sibley said that while the rent reduction is good news for tenants it is ‘bad news for the housing revenue account’ as the money would have been invested in capital schemes.
Cllr Bob Eyles also said that long-term the rent reduction will impact on tenants as it will impact on how quickly the council can update its homes with things such as new kitchens, bathrooms and boilers. Last spring the authority made a commitment to spend £15m on its housing stock over the next five years.
Latest figures state that there are currently 1,483 people on Corby’s housing waiting list, an increase of 25 percent on same time last year.