Rent Increase - Frequently Asked Questions
Over the last four years, the rents paid by Colchester Borough Council tenants have reduced by 1% each year in line with Government policy.
This has meant the average Colchester Borough Council rent has reduced from £87.28 in 2015/2016 to approximately £84.91 in 2019/2020.
The Government have now revised this policy allowing landlords to increase rents by a maximum of the rate of inflation, known as the Consumer Price Index (CPI) + 1% for at least the next five years from April 2020.
The council has agreed to implement this increase to our rents in 2020/2021 meaning rents will increase by 2.7%. This increase will come into effect from Monday 6 April and will mean the average rent for 2020/2021 will be approximately £87.20.
This is not a decision that has been taken lightly and we are aware this could have significant impacts on some of our tenants. To help give residents a clearer understanding of the decision, how the additional rent will be used and the support available for tenants we have developed some Frequently Asked Questions (FAQs) below (click on each question to view the answer):
Why are you increasing my rent?
We fully understand that any increase in rent will not be good news. However, we are committed to ensuring our tenants get the best possible support from the council and our housing management company Colchester Borough Homes.
In line with Government policy we have reduced the average council home rent each year over the last four years.
Following the change in Government policy we are able to increase rents by the rate of inflation (CPI) + 1%. The CPI figure was announced by the government on 16 October 2019 and was 1.7%.
We have not taken the decision lightly, but increasing the rents will help us fund our commitments to repair and improve your home and the other properties we rent to tenants, further helping develop a Better Colchester.
How much is my rent increasing by and how have you calculated this?
Rents will increase by inflation (CPI) + 1%. CPI was announced in October as 1.7% so the total increase will be 2.7%.
This means, for example, in 2020/2021 the average rent will increase from £84.91 to £87.20 – an increase of £2.29. This will bring average rents back to similar levels as they were in 2015/2016.
When does the new rent start?
The new rent increases will take effect from Monday 6 April. The Rent Notice letters will be sent out to all tenants in early March.
Do you have to increase my rent?
No, we don’t have to increase your rent. It is up to each local authority to decide if they want to implement the increases.
We have decided to introduce the increase for 2020/2021 to enable us to continue to deliver the high-quality services to tenants. If we didn’t increase the rents, we would have less money to invest in maintaining your home, and in new homes and your surrounding area.
I pay a service charge, do the same increases apply?
There is the potential for services charges to increase but the formula we use to calculate rent increases will not be used. Service charge costs are set to cover the cost of providing the service to you. Any change in your service charge will be a direct result of whether the cost of providing the services has increased, decreased or stayed the same. We will provide you with a full breakdown of your service charges when we write to you with your Rent Notice in March.
What will you spend the additional rental income on?
We would use the additional money we would have available as a result of the rent increases to deliver the objectives set out in the business plan which runs until 2043, including;
- increasing affordable housing supply
- providing healthy and safe homes
- renewing kitchens and bathrooms
- insulating and heating, including roofs and installing energy efficient boilers
- adapting properties to meet tenants’ needs
We will keep you informed regularly on how we are performing against all our objectives.
What do I do if I can’t afford the increase?
Our priority is to support tenants to sustain their tenancies and we want to help prevent rent arrears occurring as much as you do. Colchester Borough Homes (CBH) Financial Inclusion Team (FIT) are trained to ensure you have maximised your benefits, help you manage your finances and support you through changes in circumstances.
Please take advantage of this service to help you prepare for the rent increase, more information is available on the CBH website https://cbhomes.org.uk/you-and-your-home/money-advice or you can email the team at FIT@cbhomes.org.uk
Will the rent increases affect my Universal Credit payments?
If you already claim Universal Credit you will not need to complete a brand new claim with the Department for Works and Pensions (DWP). Once we write to inform you of your new rent you
will need to inform the DWP of the change in rent using your online Universal Credit Journal after the rent increase has been applied.
As the new rent increase will start on Monday 6 April 2020 you will need to inform the DWP on or just after this date as we will then be asked to verify the increase on their landlord portal.
What if Universal Credit doesn’t cover the rent increase?
I claim Housing Benefit, will this cover the rent increase?
If you are in receipt of Housing Benefit the amount you receive will automatically be amended from 6 April 2020, when the new rent year starts. The rent notice you receive will show the amended Housing Benefit amount.
Do I have to adjust my Direct Debit mandate or Standing Order with my bank, or will you do this automatically for me?
If you pay by Direct Debit you will not have to do anything as they will be automatically adjusted by our finance team. You will be notified separately of the revised payment amounts.
However, if you pay your rent by Standing Order you will need to contact your bank to amend the payment to the new amount advised in your Rent Notice. Please ensure your Standing Order is set-up for the correct amount as shown in your rent notice to prevent your rent account falling into arrears.
Where can I get some debt and budgeting advice from?
CBH have a dedicated specialist team that work alongside the rent income team who are trained to ensure you have maximised your benefits, help you manage your finances and support you through changes in circumstances. More information is available on the CBH website https://cbhomes.org.uk/you-and-your-home/money-advice or you can email the team at FIT@cbhomes.org.uk