Rugby Borough Council is very close to buying back former properties from Central Government and it could mean a weekly rent rise of 5% for tenants. It has also been revealed that the council will be taking on £75million of debt when the agreement takes place.
The council will have to make a one-off payment in order to buy them out of the national funding scheme for council housing. They, like any other council in England have no choice but to do so at a price that is determined by those in Whitehall. However, it does mean that Rugby Council will be able to invest all of the future rents to both repay the debt and improve the homes for the existing tenants. Tenants are certain to see their rent increase during each of the next five years to help pay off the debt.
Councillor Leigh Hunt said: “Whereas the council understands that a rent increase in these difficult economic times would be difficult for many people, we must set rents at a level that will reduce our debt costs, cover our UK property insurance and allow us to invest in council homes. Our rents are still significantly below market rents in the private sector, which are also rising. Government’s November estimate of the debt is higher than its last one, and although the final rents for next year will not be set until full council meets in February, when the final figure will be available, my advice to tenants is to prepare for further rent increases.”
Tenants are angry about the proposed rent increases, with most of the working tenants paying about £326 each month for their council accommodation and they are quite rightly worried about the future increases. Despite working many are struggling with increasing utility bills and also an increase in food shopping.