Social rent levels in London rising 10 times faster than median incomes

“We need far greater transparency as to what social landlords are actually charging their tenants, and how that money is being spent.”

Average council and housing association rents have risen by over 70% and over 90% respectively since 2002, 10 times faster than growth in household income, research by London Tenants Federation (LTF) has found.

With government consulting on how social housing rents be set from 2020, LTF is calling for rents to be determined solely in relation to the running cost of tenants’ homes as opposed to local property prices and for rent increases to be capped at inflation.

Out this week, LTF’s consultation response shed this week, notes that median household income levels (before housing costs) have increased by just 7.2% since 2002, while weekly council rents in London increased by more than 70% over the same period, from £63.44 to £108.06.

Housing association rents meanwhile have risen even more, by £60 per week, while average household incomes have risen by just £35 per week.

LTF argues that rent restructuring, a Labour government attempt to bring greater consistency to rent levels across social housing, has failed on its own terms whilst also placing undue financial pressure on low income families and on the housing benefit bill.

Instead of narrowing, the gap between council and housing association rents has increased, with rent restructuring allowing councils and housing associations to set social housing rents in relation to local property prices and to increase rents at the rate of inflation plus 1%.

Despite the scheme ending in 2015, there are concerns that rents for tenants living in either new or re-let homes are being set by some landlords at the maximum level permitted by rent restructuring, and therefore that some tenants are paying significantly more than others for the same service.

“We need far greater transparency as to what social landlords are actually charging their tenants, and how that money is being spent,” said Liam Kelly, a tenant with Guinness Trust.

“We want to see housing association tenants’ rents held in ring-fenced accounts, as council rents are. As tenants, we shouldn’t be covering the interest on loans to build new social housing. Social housing is a resource which delivers long term social benefit – it’s only right that we fund its construction through our taxes, as we do with schools and hospitals.”

LTF’s response to the consultation also raises concerns that the Mayor’s London Affordable Rent and the full formula or ‘target’ rents do not include service charges, which in some cases add a hike of £35 per week to a tenant’s overall housing costs.