Merton keeps rental increases to a minimum

The agreement by Merton’s Cabinet of annual rental increases for council housing means Merton tenants will continue to benefit from some of the lowest rents in South London.

The average rent increase for 2009/10 in Merton has been set at 6.29% (£4.85 per week), which will result in an average rent of £82.01 per week.

Rental increases in Merton are set in accordance with the rent restructuring policy issued by the Department of Communities and Local Government (DCLG). Merton has kept rental increases below the DCLG limit of 7% for 2009, which is designed to keep rents at affordable levels.

Councillor Linda Scott, cabinet member for housing, adult care and health says:

‘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 33% 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.

“We are aware that times are particularly hard for residents in the current financial climate.

“The average rent in Merton is still comparatively low compared with neighbouring boroughs such as Wandsworth (£110.86), Croydon (£86.57) and Kingston upon Thames (£91.66). This means that life here in Merton remains relatively more affordable for tenants than elsewhere in South London.”

Notes to editors:
· The Government introduced rent restructuring in 2002/03. Under the rent restructuring process, a target rent for each local authority and registered social landlord property is calculated using a formula based on the market value of the property, average manual earnings and the size of the property.

· In order to keep rents at an affordable level the DCLG have extended the convergence date for the calculation of the 2009/10 rents to March 2024 (however this date will fluctuate depending on inflation). Given the imperative to reach Merton’s target rent and the restriction imposed by the maximum annual increase, there is very little discretion to vary the annual rent from that prescribed by the formula.

· The proposed rent increase for 2009/10 will close the gap between actual and target rent by 1/12th, as per the guidance. Furthermore the DCLG have introduced an overall average rent increase constraint of 7%. Merton’s average rent increase for 2009/10 is less than 7%.