Agenda item

This report provides further details of the Government’s new rent setting guidance for Social Housing that will be effective from April 2015. It sets out further information about the options open to the Council to increase rents for council tenants in households with taxable income of more than £60,000 per year. This follows Member consideration of the recent guidance at the Business Support Overview and Scrutiny Committee on 26 August 2014 at which further clarity was requested.

The report sets out the potential impact on the income stream of the Housing Revenue Account and proposals for defining bedrooms when these are on the ground floor in houses.

Discussion: 

Further to the meeting of the Committee on 26 August 2014, the Head of Housing Management advised that further research had been undertaken with regard to the options for rent setting for those households where there is taxable income of £60,000 or more as set out in the report. The Committee noted it was estimated there were 10 families currently on the housing register that might potentially fall within this category. The recommendation to Cabinet was that where properties are let to new households with a yearly earned taxable income of £60,000 or more, the rent payable would be based on “affordable” rents from April 2015.

At the last meeting of the Committee further information was also requested on proposals for defining bedrooms when these are on the ground floor in houses. Officers had reconsidered the potential impact and recommended that from April 2015 bedrooms will only be counted as bedrooms if they are not on the ground floor of a property, with the exception of those listed in Appendix A to the report.

Members raised a number of points and questions including:

Affordable Rent and Households with Taxable Incomes exceeding £60,000 – in response to a question about the possibility of the cost of administering the proposed policy in relation to households with income of £60,000 or more outweighing the financial return to the Council, officers advised that the cost of capturing and regularly reviewing the income levels of the small number of families affected would be negligible. Officers offered to provide more information to one member of the Committee on the particular circumstances qualifying the addition to the housing register of the ten families with Assets  exceeding £50,000. 

Reference was made to concerns previously raised by the Committee about households who receive a one off compensation payment such as redundancy or an accident and injury settlements and the Committee noted and supported the proposal that Cabinet should agree that discretion be applied to those households who receive compensation or a one off redundancy payment which exceeds £60,000.

Bedroom Size – In response to a proposal that where rooms have been internally subdivided these should not be classed as bedrooms Officers asked for time to consider the implications of adopting this as a principle with a report back to the Committee. 

Decision:

(a)       The Committee recommended Cabinet to agree that:

(i)   Where properties are let to new households with a yearly earned/salaried taxable income of £60,000 or more, the rent payable will be based on “affordable” rents from April 2015;

(ii)   To agree that from April 2015 bedrooms will only be counted as bedrooms if they are not on the ground floor of a property, with the exception of these properties listed in Appendix A of the report; and

(iii)   Discretion be applied to those households who receive compensation or a one off redundancy payment which exceeds £60,000.

(b)       The Committee requested that further investigation be undertaken regarding the adoption of a principle whereby internally sub-divided rooms will not be counted as additional bedrooms having regard to the original room layout of the property and that a report on the findings be submitted to a future meeting of the Committee.