A new home for a living rent – Mayor’s £10,000 savings offer to renters
Private renters struggling with record rents and house prices are set to benefit from modern new homes at a genuinely affordable living rent under new Hackney Council plans.
The new homes, initially being built as part of the Council’s regeneration programme, could see eligible renters save nearly £10,000 a year on the average two-bedroom flat – helping them to build up a deposit to buy their first home.
Under plans approved by the Council’s Cabinet last night, living rents would be set at a third of average local incomes – which could be around £1,000 per month for a two-bedroom property. The average equivalent market rent in Hackney is around £1,800 per month.
The Council will let and manage the homes through a separate, wholly-owned company – meaning that as well as a discounted rent, tenants can be sure they won’t face unwarranted fees and charges or excessive rent increases.
Building homes for living rent is part of the Council’s #BetterRenting campaign to improve standards and affordability for private renters in Hackney. Successes so far include pressuring the Government into banning letting fees and introducing Hackney’s own voluntary ban, as well as consultation on extending property licensing to tackle rogue landlords.
More than 34,000 homes are privately rented in Hackney – around a third of all households – with rents rocketing 36% since 2011 and letting agents charging an average of £400 in fees per tenancy.
Too many people in Hackney, especially young renters, work hard and save hard but are struggling to make ends meet because of rocketing rents in the private sector.
These homes for living rent will help those struggling to stay in Hackney or save for their first home – putting an extra £800 on average in their pocket every month to save towards a deposit.
We’re building thousands of new Council homes who those most in need, and I’m proud that our living rent will expand our offer to help those who aren’t eligible for social housing but still need a hand to find a genuinely affordable place to live.
To apply, residents must be renting or working in Hackney, have a household income of less than £60,000 and be unable to buy a home in their local area. The homes will not be available to buy.
Due to government restrictions which don’t allow the Council to directly own homes for living rent, it will set up a not-for-profit company to do so. Any surplus income generated will be reinvested in housebuilding, and the company will have no third-party involvement, be fully accountable to the Mayor and the Council’s Cabinet, and be run by a board made up of council staff.
This company will not build homes itself, but will acquire homes being built through the Council’s regeneration programme that would otherwise have been for outright sale or shared ownership. Discounted living rents will be subsidised by letting some homes at market rents, with all homes let on longer tenancies than the average home in the private sector to provide stability to tenants.
The Council is building nearly 4,000 homes across the borough, with more than half for social rent and shared ownership, paid for by some homes for outright sale in the absence of any government funding. The plans for living rent will not mean any reduction in homes for social rent as part of the Council’s programmes.
The first homes are expected to be available next year. Further details on how to register interest will be published in the coming months.