Government help for council means lower rent rise for 17,000

The rent increase for more than 17,000 tenants of Manchester City Council homes will be cut by almost half thanks to extra help from the Government.

Councillors decided in March to increase rents by 5.6% and tenants started paying the higher rents last week.

But extra funding to compensate for inflation changes and reduce the impact of rent rises this year means the increase for 2009/10 can be cut to 2.9% with no reduction in services. City Council tenants will get letters shortly telling them how the change will affect them.

In setting rents, councils need to look at the inflation figure from the previous September. At that time inflation was at its high point but has come down quickly since then.

After listening to the concerns raised by councils and tenants, the Government recognised the problems this has caused and offered to help councils through extra subsidy.

Councillor Paul Andrews, Manchester City Council's Executive Member for Neighbourhood Services, said, "This will be a helping hand for Manchester council tenants.

"The City Council had already been able to minimise the rent rise it was introducing but with this support we will be able to reduce it further, with most tenants' rent increase limited to under £2 a week. With the economic challenges that tenants are facing due to the downturn, every little helps."

Although councils have been offered support, this has not been extended to housing associations and the council believes that all social housing tenants should get the same benefit.

Councillor Andrews added: "The Council has more than 17,000 homes in Manchester and so this will be felt widely. Unfortunately, this reduction doesn't cover the rents of housing association tenants, including transferred stock.

"I have already written to the Housing Minister asking for help to reduce rents for social housing tenants and I am extremely disappointed that so far I have not received a positive response. But we'll continue to lobby Government to give help to all social housing tenants in Manchester."

In the coming weeks, the Council will be writing to all its tenants advising them about how the decrease will affect them.

In the meantime, the Council advises that tenants to keep paying their rent as normal.