Waltham Forest Council is to increase its temporary accommodation rents from April this year.
The increase was agreed by the cabinet at a meeting on February 23 and will link the rents to the Local Housing Allowance, which is a little lower than private rents.
The cabinet heard that, where Waltham Forest tenants are eligible for housing benefits, the contribution they pay will not change after April 5, with the council instead claiming the extra rent from the Government.
However, an estimated three per cent of the borough’s temporary accommodation tenants are not eligible for housing benefits.
A “minority” of an undisclosed size will also find the increase pushes them above the highest amount their household can claim in benefits, although the council believes its “established processes” will be able to support such cases.
The council is also increasing rent for council homes by 1.5 per cent and slightly raising garage rents, estate parking fees, traveller site pitches and heating charges.
Cllr Louise Mitchell, cabinet member for housing, said such increases would allow the council to invest £137 million in housing over the next few years.
This includes £40 million of “necessary building and fire safety improvements” to existing buildings, of which £5.5 million is to replace fire doors, according to a report for the meeting.
She said: “Council rent has always been extremely good value and in Waltham Forest more so than many other boroughs, particularly in London.
“Our rents average around just over £100 a week for a two-bedroom property, roughly a third of the cost of properties within the private rented sector.
“We do know private rents may fall as a result of Covid-19 but the council rent still remains by far the best value for money, which is why it’s so important that we channel our resources.
“These proposals are designed to enable the council (in)… supporting homeless households and improving its homes, while remaining financially stable.”
She added that “97 per cent” of those in temporary accommodation were eligible for housing benefits but did not elaborate on the expected impact on the remaining three per cent.
A report prepared for the cabinet on the changes reads: “The current rent regime for temporary accommodation rents is complex and outdated.
“Linking rents to Local Housing Allowance will increase both simplicity and transparency… (and) ensures that the local authority can maximise the rent that it is able to recover through housing benefit.
“This helps to narrow the gap between the rent recoverable and the cost of providing temporary accommodation, which reduces the average loss made on each week.”
Regarding households where the increase will raise rents above the benefits cap, it adds: “These cases are in the minority… and established processes are in place to support households that are already affected by the cap, including the application of Discretionary Housing Payments.”
The council plans to spend almost £5 million on sheltered accommodation and hostels over the next four years.
It has also budgeted more than £84 million for building new homes, of which more than £35 million will be on developments built by the council-owned construction company Sixty Bricks.