Social and Other Housing Assocation Rents to Rise by 7.7% in April

shacaction

2 years ago

As major announcements go, this year’s statement on the social rent cap (SRC) has to be one of the quietest in history. A page on the Regulator of Social Housing’s website confirms government’s return to the social rent cap formula. Unlike last year, there was no fanfare heralding its arrival.

It means that the majority of housing association tenants (including shared owners) will receive rent rises of 7.7% on already swollen rents which jumped 7% in 2023.

The low-key publicity surrounding this statement no doubt reflects government’s recognition that sharply hiking rents for the poorest and most vulnerable tenants in Britain is not a good look in an election year, and are hoping that it will go largely unnoticed.

Application of the Social Rent Cap

Housing associations are not obliged to raise rents by the full SRC percentage, but are not allowed to exceed it. There are also different percentage rises for some specialist types of housing. However, the sector norm is to apply the maximum rise, and to include other rent tenures even though they are not covered by it, for example properties let at full market rates.

There is no cap on service charges and they are barely regulated, leaving landlords free to hike these as high as they wish. The charges are often riddled with errors and are the subject of a dedicated SHAC campaign to end service charge abuse.

Tenants and Residents Pledge to Withhold Payments

Even before the Cap was announced, more than 150 tenants and residents signed the SHAC Pledge after Unfair and Uncapped launched in October. The Pledge commits members to either withhold payment of their rent and service charge increase, or support those who are. This is in addition to 600+ tenants or supporters who signed the Pledge in the prior twelve months.

It is clear that the cost-of-living crisis and low level pay rises or benefits uplifts are leaving people with little choice but to restrict their rent and service charge payments. Many highlighted these factors when explaining why they will not pay the rent increase.

“I cannot afford to keep paying and I want to stand in solidarity with others in the same position” Abri tenant.

“Any increases would be totally unjustified. Not only because many of us living in housing association properties are struggling to survive financially, but also because our landlords have not been providing good enough services in return for our rents.

“Services that used to be included in our rents are no longer carried out, and instead we have to pay higher and higher service charges for those things …” Clarion tenant

“On a state pension, I cannot afford the increase in service charges, energy, food and all the other prices.” Alliance Homes tenant.

“I do not agree with the annual rent and service charge increase. We are facing a crisis with the cost-of-living on a daily basis. No wages increasing, only bills and expenses.” Clarion tenant

“Rent charges are extortionate as it is, let alone with cost of living increases. It’s about time the government looked after the people and not the corporations.” L&Q tenant

“My rent is £816 month and I’m already on benefit cap and I have to put £176 towards my rent. I’m left broke every month.” MTVH tenant

“I think it is morally and compassionately wrong for a landlord to increase rent and services charges during a cost of living crisis which has been created by this government and the capitalist system it operates within.” Clarion tenant

“Due to the increase cost-of-living I have to think what to choose – food on my table or rent. I do not agree at all with this increase rent and service charges, especially if the landlord is a charity organization. I am a Civil Service employee and my wage was increased by only 4%.” Hyde tenant

For others, it is the combination of rent and service charges that make the rises unsustainable. The examples included L&Q service charges up 30%, Livewest heating increases of 300%, MTVH service charges up 80%, and a complaint about Notting Hill Genesis service charge rises of 200%. The most extreme was PA Housing (previously Paragon ASRA) about heating cost increases of 700% in a single year:

“This issue has significantly impacted our lives — the unprecedented rise in service costs that has rendered our home completely unaffordable. In recent months, we have experienced an alarming surge in the costs associated with essential services, making it increasingly challenging for us to maintain our standard of living.

“This abrupt escalation has left many households, including ours, struggling to cope with the financial burden imposed by these soaring expenses. The compounding effect of these rising service costs has created an untenable situation, forcing us to make difficult choices and sacrifices in our daily lives. It is crucial that we address this issue promptly to prevent further financial strain on families like ours.” Clarion resident

“I cannot afford these increases and working full time with no prospect of a pay increase. I have been seeing unaffordable increases due to service charge errors on top of above-inflation rent increases so I am now taking a stand.” Home Group resident

“I am a single parent and full time employee. No matter how hard I try I am barely managing providing for the family.” Housing Solutions resident

“As an NHS worker, I had a pay rise of 5%. I cannot afford a 7.7% increase to my rent – plus whatever the uncapped service charge increase will be – on top of all of the other price increases I have had to absorb over the last few years.” Hyde resident

“I hope that with sufficient numbers refusing to accept the status quo then it will result in the whole system being changed right down to the foundations!” L&Q resident

“HA say they will increase my rent for 2 bedroom flat by 7% from £420 month to £450 month. I can’t afford it. My hours have been cut at work so I earn only £1,100 month now! Gas and electric are up from £100 to £200 per month. £150 for Council Tax. Public transport cost to commute £100.

“Can’t downsize as my only daughter is in domestic violence situation so I must keep her bedroom as a safe place for her to flee to. Can’t manage to save up enough deposit to get on housing ladder … Working poor like me are left really struggling.” New Gorbals Housing Association resident

“Not only have we been asked for 7% increase on rent in 2023/24, we have been asked for an extortionate £65.47 for service charges per week, relating but not limited to a share in commercial gas usage. We have never seen an increase like this before in the 13 years I have lived here at least.

“I am working full time, I have been asked to come up with a total of £75.53 per week, and this would mean I am purely working to keep a roof over my head, with little expenditure for anything else this year.” One Housing Group (Riverside) resident

Unfair and Uncapped

SHAC’s Unfair and Uncapped campaign demands that government and housing associations freeze rents and cap service charges. The sector as a whole has a great deal of surplus and could afford to do a lot more to ease the financial burden on tenants and residents.

These rent rises will also impact the taxpayer by increasing Housing Benefit (or equivalent Universal Credit) payments to cover rents, meaning a transfer of yet more money from the public purse to private landlords.

As part of the campaign action, we are asking everyone to sign our pledge, and switch payments from Direct Debit to Standing Order as the latter can’t be amended by the landlord. We also advise people to write to their landlord letting them know that payment is being deliberately withheld. A template text is provided.

In an election year, it is essential that this issue is on the manifestos of parliamentary candidates. We also therefore suggest writing to the local MP, and copying the letter or email to the landlord.