Rent for council tenants in Hackney could rise next year for the first time since 2015, the Town Hall’s housing services chief has hinted.
The government recently confirmed it will let social landlords, including councils, increase rents for five years from 2020 in line with inflation plus one per cent.
With inflation currently at 1.8 per cent, that could mean an extra £168 a year for a tenant on a monthly rent of £500.
Cllr Clayeon McKenzie, cabinet member for housing services, told the Living in Hackney scrutiny commission this week that “there is a general consensus amongst local authorities” to take up the government’s offer.
But he later told the Citizen: “It is too early to make any decisions about next year’s charges and we will of course give it careful thought based on government guidance.”
The government’s rent plan, first announced back in 2017, was welcomed at the time by 86 per cent of social landlord respondents but rejected by 87 per cent of tenants and tenant groups, according to a consultation report.
Cllr McKenzie reminded the scrutiny commission that rents have gone down by one per cent every year for the past four years.
He added: “Hackney Council tenants’ rent levels are some of the lowest in London and are likely to remain so.
“If the council increases rents by inflation, without the additional one per cent, we would need to make an additional estimated £1.2m of savings for the year.
“There are many pressing priorities on the housing budget, including fire safety, repairs and maintenance and investment, and whilst we have managed to identify savings over the last four years to compensate for the rent reductions, ongoing loss of revenue will mean that additional savings would need to be made.”
Since 2010, Hackney Council has seen its government funding cut by £140m – almost half.
It needs to find another £30 million in savings by 2022 in order to balance the books, with Mayor Philip Glanville railing against the “Tory austerity agenda” in February as councillors approved a Council Tax rise.