Agenda item

A report from the Director – Regeneration and Environment is attached. This sets out the proposed affordable rent levels to apply to newly built and newly acquired HRA properties for the 2016/17 year. (Key decision – reference number 4341)

(Report No.100)

(8.45 – 8.50 pm)

Councillor Ahmet Oykener (Cabinet Member for Housing and Housing Regeneration) introduced the report of the Director – Regeneration and Environment (No.100) setting out the proposed affordable rent levels for apply to newly built and newly acquired HRA properties for the 2016/17 year.

NOTED

1.               That the Government definition of “affordable rent” was described as up to 80% of market rent. However, Enfield Council had always been clear that it intended to set rents that were affordable for people in Enfield, and that therefore its “affordable” rents were likely to lie somewhere between social rent and 80% of market rent. Affordability would be determined by reference to average earnings in the Borough (section 3 of the report referred).

2.               The proposed weekly rent levels for the 2016/17 year as set out in paragraph 3.7 of the report.

3.               The proposals for going forward as detailed in the report.

Alternative Options Considered: NOTED the following alternative options which had been considered:

1.     The Council could continue to set its HRA rents at social rent levels. However, it had received GLA funding and participated in the Government’s Right to Buy One for One Replacement Scheme on the understanding that properties funding through these two income streams would be let at affordable rent levels. In addition, the Welfare Reform and Work Act 2015 required that social rents would reduce by 1% per annum over the four years commencing 2016/17. This had put pressure on the 30-Year HRA Business Plan – setting affordable rents would contribute to alleviating that pressure and create more flexibility to fulfil aspirations to manage, improve and renew stock to a higher standard.

2.     The Council could set HRA affordable rents by reference to market rent levels. However, these vary across the Borough and were subject to constant change in the current financial climate. This would make rent-setting both difficult to administer and confusing for tenants.

3.     The Council could set higher rent levels. However, it had agreed to “ensure that any homes let at affordable rent levels remained affordable for people in Enfield”.  

DECISION: The Cabinet agreed that

1.               HRA affordable rents would be set by reference to Local Housing Allowance (LHA) rates applying to Enfield.

2.               In order to ensure local affordability, HRA affordable rents would be set by reference to median income in Enfield.

3.               The affordable rent levels set out in paragraph 3.7 of the report, which were inclusive of service charges, would apply to newly built and newly acquired HRA properties for the 2016/17 year.

4.               HRA affordable rents would only apply to newly built or newly acquired properties – current properties, or new properties where the Council had already undertaken to offer properties at social rent levels (for example, those let to decanted tenants on the Alma and New Avenue schemes), would continue to be let at social rent levels.

5.               HRA affordable rents would be subject to an annual review to ensure consistency and continuing affordability.

Reason: The proposed methodology for calculating and reviewing HRA affordable rents would ensure transparency and affordability. Annual review by reference to LHA rates and median income would ensure that rent levels remain affordable for local people. The rent levels proposed in the report had been tested for affordability.

(Key decision – reference number 4341)