RESIDENTS living in council-owned properties in Oldham are facing a hike in their rents.

The town hall’s cabinet has this week agreed to support a 3.4 per cent rise in the rent of its thousands of council homes.

It means that the weekly bill will rise from £84.87 to £85.97 – up by £1.10 – from April this year.

There are 49 chargeable rent weeks in 2019/20, adding up to an extra £53.90 for tenants.

The council’s housing stock is made up of 2,062 properties, which are all managed and maintained within two private finance initiative (PFI) schemes.

Of these, the majority of homes in the borough are sheltered accommodation.

Cabinet member for finance Cllr Abdul Jabbar revealed the rise as he outlined the housing revenue account (HRA) estimates for the coming years, and the outturn for this financial year.

The HRA is the pot of money where councils in England manage their housing revenue and expenditure.

Presenting the report to cabinet Cllr Jabbar said: “It sets out our policy to increase the rent for the homes that we own.

“So you’ll recall that social landlords have been asked to reduce their rent but ours is exempt because our properties are funded through PFIs, so in line with government policy we can increase our council homes’ rent by inflation plus one per cent.

“So the rents are increasing by 3.4 per cent. We’re not increasing any service charges and we’ve not done that for the last two years.”

The largest PFI contract is with Housing 21, which was signed in 2006 to provide more than 1,430 sheltered accomodation dwellings.

These were a mixture of bungalows and group schemes, construction of which finished in May, 2012.

The Gateways to Oldham PFI scheme reached financial close in November, 2011 and saw the refurbishment of 317 existing properties and the creation of 317 new homes, with a total value of £77 million.

The council has entered into a 25-year contract with Inspiral Oldham which used private finance to fund the construction works and to manage and maintain the properties for the duration of the contract, which runs until October, 2036.

Local authority housing is contained within the HRA – a ringfenced budget which effectively operates as a business of its own separate to the rest of the councils’ operations and services.

The HRA takes its income from rents and services charges collected from tenants, and spends this money exclusively on building and maintaining housing.

Councils are able to borrow money within their HRAs in order to build more homes to provide more income, or even to refurbish or regenerate existing homes.