Merton housing rent stays below government guideline

Merton Council agreed Monday that a rise in housing rents would still remain below the central government guideline rent for the borough.

The average rent for Merton Council tenants in 2008/2009 will be £77.16 per week, an average increase of 5.84% or £4.26 per week compared with 2007/2008. The government guideline for rents in Merton for 2008/2009 is £78.07.

There will also be a modest increase in service charges. For tenants receiving all services excluding communal heating, there will be an increase of £0.98 per week. However, tenants receiving communal heating will see a reduction of £1.41 per week in this element of the service charge to reflect last year’s peak charges.

Merton Council Cabinet Member for Housing and Regeneration Councillor Diane Neil Mills said: “The council does not have full control over rents and must follow government guidance on rent restructuring when setting rental costs each year. Despite the challenges associated with paying back approximately 35 % of tenants’ rental income to central government, Merton Council is determined to provide good value for money for its tenants and to put their needs first within the financial framework set down by the government. The situation is not sustainable and we are continuing to progress discussions relating to stock transfer, which would allow all of the tenants’ rent to be retained and re-invested in the housing properties.

“The average 2007/2008 rent charged by Merton Council of £72.94 per week compares favourably with neighbouring boroughs Wandsworth (£99.89), Kingston (£82.31) and Croydon (£77.69), which all charge above the guideline rent.”

-Ends-

Notes to editors
1.The net income generated from the increase in rents is estimated at £1.3 million and will increase Merton’s total rental income to £26 million. However, under the current housing subsidy system, Merton will be required to pay £8.8 million (35% of the tenants’ rent) of this rental income to central government. This will be £1.6 million more than the amount paid to central government this year (£7.2 million). As a result, the available funds to run Merton’s housing service will, in absolute terms, be lower next year in comparison with the current year.

2.Merton is one of 12 London boroughs required to pay money back to central government out of tenants’ rents. By contrast, inner London boroughs like Islington keep all of the rental income and receive an additional £46.5 million from central government to run the housing service.

3.Under the rent restructuring process introduced by the go