KC council announces plan to nudge up rents just above inflation

By Adrian Zorzut, Local Democracy Reporter

Kensington and Chelsea council is set to increase rents by one per cent above inflation to counter “significant pressures” in its 2025/26 budget. The council expects the 2.7 per cent rise to cost social housing tenants an extra £12 to £21 per month, a council report shows.

Broken down weekly, anyone living in a studio flat will see their rent rise to £118.43 from £115.32. Those in a five-bedroom property will see their rent jump to £225.05 from £219.13. Properties that are re-let could be subject to a five per cent increase.

Last year, the council raised rents by the government-sanction cap of seven per cent. Inflation in the UK at the time was roughly 11 per cent .

According to the council, the seven per cent cap, in addition to a one per cent rent reduction between 2016 and 2020, means rents are 17 per cent lower in real terms. They said such “pressures” mean they will not be able to sustain the “desired” level of capital investment in the medium term.

Reports before the Housing and Communities select committee show the council seeking to increase parking charges by 2.7 per cent in April and will be reviewing its charging policy in 2025. Changes to the charging policy will be subject to a public consultation, the report said.

Meanwhile, service charges for tenants are expected to increase “with inflationary pressures and changes in usage”.

The council is also considering borrowing more but acknowledged this would lead to it trying to find money to cover borrowing charges. The council’s housing department is also expected to fork out £50k in fees to the Building Safety Regulator, £40k to the Social Housing Regulator and £73k to the Housing Ombudsman.

It is also estimates having to pay £600k in National Insurance contributions after the rate for employers was increased in the Budget.

The report read: “At the time of the announcement assurances were given that public sector employers will be protected from this increase. Unfortunately, it is not clear how such support will be paid to the HRA (Housing Revenue Account).

“It is therefore considered prudent to make provision in the HRA in case the Government support is not forthcoming.”

The council said its housing budget is contingent on the funding settlement from the Government, which has yet to be finalised.

Meanwhile, the council is expected to spend an extra £3.3m on temporary accommodation in the coming financial year. In 2024/25, Temporary Accommodation set the council back £31.9m.

The council is also expected to spend an extra £1.9m on extending its contract with Bellrock Property & Facilities Management Ltd to maintain the council’s buildings.

The council has also deployed 30 uniformed Street Enforcement officers across the borough which has brought in £800k ‘in savings’ since 20219. The council said the officers issued an average of 90 fines per month in 2024 – an increase of 70 per cent from 2019 when the council issued 53 per month.

The Housing and Communities Select Committee will meet today to review the budget proposals.

Picture: Pixabay/Jonathan Wilkins