Council Rents

Deputy Prime Minister written question – answered on 7th November 2002.

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Photo of Mr Iain Coleman Mr Iain Coleman Labour, Hammersmith and Fulham

To ask the Deputy Prime Minister

(1) what estimate he has made of the cumulative additional rent paid in real terms over the 10 years rent restructuring period by council tenants in London in (a) money terms at 2002–03 prices and (b) as a percentage of the Housing Revenue Account rent income for 2001–02 at 2002–03 prices, assuming that (i) there is no change in the number of council tenants over the period, (ii) councils move to the average of the formula rents proposed by his Office and (iii) they do so in the roughly equal steps proposed by his Office, (1) taking the impact of individual tenants' rent increase capping into account and (2) not taking the impact into account;

(2) what estimate he has made of the average real terms increase in rents paid by council tenants in London in (a) money terms at 2002–03 prices and (b) percentage terms compared to 2002–03 prices at the end of the 10 year rent restructuring period, assuming (i) that there is no change in the number of council tenants over the period and (ii) that councils move to the average of the formula rents as proposed by his Office, 1 taking the impact of individual tenants' rent increase capping into account and 2 not taking the impact into account.

Photo of Tony McNulty Tony McNulty Parliamentary Under-Secretary, Office of the Deputy Prime Minister

Setting of council tenants' rents remains a matter for individual local authorities. Future council rent levels will be influenced by, among other things, the outcome of future Spending Reviews.

However, were London boroughs to follow our policy on rent restructuring, we estimate that on current assumptions the average rent paid by council tenants in London in 2011–12 at the end of the ten year rent restructuring period, would be #8.17 higher in real terms in 2002–2003 prices. This represents a real increase of 12.8 per cent., as a percentage of the Housing Revenue Account rental income of London boroughs for 2001–2002 in today's prices.

The estimated cumulative additional average rent paid each year in real terms over the ten years is shown in the following table in 2002–2003 prices.

Year Real rent increase Percentage increase over today's average rent
2002–2003 #0.82 1.3%
2003–2004 #1.63 2.6%
2004–2005 #2.6% 3.8%
2005–2006 #3.27 5.1%
2006–2007 #4.09 6.4%
2007–2008 #4.90 7.7%
2008–2009 #5.72 8.9%
2009–2010 #6.54 10.2%
2010–2011 #7.35 11.5%
2011–2012 #8.17 12.8%

Notes:

1. These figures do not make any allowance for the impact of future Right To Buy sales or transfers to Registered Social Landlords.

2. As relevant data is currently unavailable, these estimates do not take account of the effects of the rent caps and limits on individual rent rises, which will have the effect of reducing this average rise.

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