That the Executive:

a)             recommends to Council the approval of the HRA budget for 2023/24 as set out in paragraph 4.3, being a net expenditure of £2,219k to be funded from the HRA working balance;

b)             agrees an increase of 7% be applied to social, affordable and hostel rents from 1 April 2023 and recommends this to the Council for approval;

c)              agrees an increase of 2% be applied to shared ownership rents from 1 April 2023 and recommends this to the Council for approval.

Considered – Report of the Corporate Director – Strategic Resources setting out the Housing Revenue Account (HRA) budget for 2023/24 and agreeing the rent increase for 2023/24 to the County Council for approval.

County Councillor Simon Myers introduced the report, thanking the Housing workstream and noting that this will be the first time that a Housing Revenue Account (HRA) will need to be considered by the County Council as a result of the transfer of responsibilities on 1^st April due to Local Government Reorganisation. North Yorkshire Council will inherit roughly 8,500 council tenants living in Harrogate, Selby and Richmondshire. As a Housing Revenue Account authority, it does provide opportunities for the new Council to try and help tackle the housing crisis that many residents across the county are facing. However, there are pressures as HRAs have to be self funding, but are subject to the same cost inflationary pressures as across the council and it is imperative that fair social rented accommodation is provided and that it is built to decent standards. However, this requires capital expenditure that is included within the budget to bring stock up to a decent standard and futureproof the HRA to the extent that we can to futureproof properties and develop further properties.

In setting rent increases for the forthcoming year, it is recommended to increase rents by the maximum allowed by government, which is capped at 7%. In normal times, councils are allowed to increase rents by the combination of CPI + 1%, which would be 11% currently, therefore the government has capped the increase. If the maximum rent increase was not introduced by the council, then it would limit the ability to achieve the ambition to improve the current housing stock and develop new properties.

Paul Foster, Community Development at Harrogate BC added that every 1% below the 7% proposed would reduce rental yield by an estimated £357k in 2023/24 and after 10 years, total rental income collected would be £4.1m less for each 1% below the 7%. It is a ringfenced account, so expenditure on maintaining and managing stock has to be paid for from housing rents and with inflation at 10%, a 7% rent increase is the recommended approach.

County Councillor Derek Bastiman supported the proposal and felt it was incumbent on the new authority to increase rents by the maximum amount to fund the provision of efficient and decent homes in the future.

Resolved –

That the Executive recommends to Council:

a)      the approval of the HRA budget for 2023/24 as set out in paragraph 4.3, being a net expenditure of £2,219k to be funded from the HRA working balance.

b)      agrees an increase of 7% be applied to social, affordable and hostel rents from 1 April 2023 and recommends this to the Council for approval;

c)       agrees an increase of 2% be applied to shared ownership rents from 1 April 2023 and recommends this to the Council for approval.