Rise in council house rent prices proposed in Dudley
Council house rents could be hiked to fill a black hole in Dudley’s housing budget, it has been proposed.
Officers at Dudley Council are proposing a rise of 7.7 per cent in 2024 to make up for a forecast £3.8 million deficit in the council’s Housing Revenue Account (HRA) for the current financial year.
The increase would take an average council house rent in Dudley from £89.33 to £96.21 per week.
The increase is based on the official September inflation rate (Consumer Prices Index) plus one per cent.
Back in September, the rate was 6.7 per cent but it dropped to 4.6 per cent for October in line with the Government’s target of being below five per cent by the end of the year.
The Bank of England is forecasting that inflation will continue to fall and be at around two per cent by the end of 2025.
The HRA budget was originally forecast to be in the black for 23/24 but, in a report for the council’s Cabinet meeting on December 13, finance officers paint a bleak picture.
They blame rising interest rates, falling rental incomes and a £6.4m increase in maintenance costs for the multi-million-pound deficit.
The report also forecasts reserves will be just £1.3m for March 2024, a drop of more than half compared to their original forecast of £3m.
Officers also point out that Dudley’s reserves compared to what they earn from tenants are low compared to other authorities.
The report says: “Forecast reserve balances are forecast to stand at 1.4 per cent of income.
“Across England HRAs with similar income profiles hold an average reserve of 34 per cent of income.
“Local comparators hold on average a reserve equalling 11 per cent of income.”
Cost for tenants in properties with communal areas also looks set for a big increase.
Earlier this year the authority introduced a service charge of £5.20 per week but for homes with communal areas, officers are now planning an increase to £12.46 per week.
The plans will be discussed at the council’s housing committee in January before councillors make a final decision in February.
