Rents for tenants at 22,000 council houses across the borough are set to dip slightly next year, it has been confirmed.
But householders of former Wigan and Leigh Homes properties are being warned that the one per cent cut will only last for the next two years.
Former Chancellor George Osborne told town halls up and down the country in 2015 that they would be required to reduce the rents for social housing year-on-year. However, from 2020 to 2025 this approach will be phased out and local authorities will be permitted to increase rents by the Consumer Price Index level plus one per cent.
Whitehall chiefs say this will give councils and social housing providers a degree of certainty and security so that they can plan investment in the existing stock and new builds in the future.
Council bosses in Wigan, who assumed control of the former Wigan and Leigh Housing stock earlier this year, have their own new-build programme at various sites across the borough.
Paul McKevitt, the council’s deputy chief executive, said in a housing advisory panel report that the decision would result in Wigan Council’s losing out on around £900,000 in rental income for 2018-19.
He said: “Added to the impact of the reduction in the previous two years, the cumulative loss to date for the council is around £2.7m. It should also be noted that this means that rental income is now lower than the figure which was used to calculate the buyout of the £99m loan that was taken out in 2012 as part of the Housing Revenue Account self-financing arrangements.”
But it is expected that borough garage rents will increase by three per cent. The service charges imposed by the authority will remain frozen, it is being recommended.
Wigan Council estimated that it saved £5.5m by taking back control of the majority of the borough’s social housing stock.