Rent for thousands of council tenants in Camden is set to go up by seven per cent despite opposition from residents’ groups.
The Town Hall will put up prices in April to help boost the income for its housing revenue account by £8.2m as it struggles with the hike in inflation.
It will mean an £8.59 weekly increase on a two-bedroom home, taking the rent up to £131.31 a week.
Service charges will go up by five per cent.
Cabinet member for better homes, Cllr Meric Apak, said the council had to follow government rules to cut rents by one per cent a year between 2015 and 2019, which cost it £7m.
It has also faced financial pressures from Brexit, the £20m cost of putting right the cladding on the Chalcots estate and its waking watch, and other post-Grenfell fire safety measures that will cost £40m over the next five years.
Cllr Apak said: “Not increasing rents and service charges can only lead to one outcome – worse services for our tenants.”
He added: “Do we cut repairs, CCTV, caretaking? What about the welfare team?
“We need a pragmatic solution, one which is the least hurtful and damaging to our tenants.”
He warned that another option would have been to sell assets but he was not prepared to recommend it.
Cllr Apak said the dilemma was “etched on the faces” of tenants’ representatives as they looked at the options.
He urged residents to seek help early if they think they will face difficulties in finding the extra money.
The council will also put up heating pool charges by 175 per cent but use credits to bring it down to 125 per cent. It will also defer repayment of the deficit notched up because of fuel price inflation.
This could raise £12.9m for the housing budget.
It follows a vote by residents’ representatives at a recent meeting of all five district management committees. Two of them voted for the 125 per cent increase, while one opted for a 175 per cent hike.
Holly Lodge Tenants’ and Residents’ Association contacted Cllr Apak suggesting he looks at lower increases.
Initially the council was looking at a 290 per cent hike but brought it down to 220 per cent before a “painful” hunt for other ways to cut it further.