Greenwich’s Conservative councillors have accused their Labour counterparts of trying to exploit a “loophole” by raising rents for new council housing tenants by around four times the rate of inflation.

A report to be considered by the council’s all-Labour cabinet on Wednesday recommends pushing up rents for newly-let properties in a bid to raise more than two million pounds from social housing tenants over the next three years.

Documents show that cabinet members will be asked to raise rents by up to 6.7 per cent for tenants moving into new properties, compared to the 2.7 per cent increase for tenants remaining in their existing homes.


The 2.7 per cent rise – based on an extra one per cent boost above the 1.7 per cent inflation rise – was endorsed by councillors at a meeting in February.

However, the authority’s Opposition claim “a new interpretation” by Greenwich Council will see them boost leases to new tenants to 5 per cent above the inflation – with the council looking to capitalise on guidance in regulations which state “the provider may only move the rent up to formula rent when the property is re-let following a vacancy”.

The council predicts the move would raise an extra £711,721 over 2020-21, with £2,135,163 over the coming three years.

Cllr Spencer Drury, the opposition spokesperson for housing, expressed concerns about the move.

“I am deeply concerned that the cabinet seems to think it is appropriate to completely undermine the decision of the whole council to raise rents by 2.7 per cent, which was only made in February,” he said.

“The proposed decision to raise rents for tenants moving into a new home will mean that some of the poorest people in this borough are being asked to pay extra for the council’s failure to be a better organised landlord.

“These are difficult times economically for many families and I believe this is an unfair decision, with new residents paying more in rent than those in identical neighbouring properties.”


Cabinet member for housing, Cllr Anthony Okereke, said the move was necessary following years of Government-enforced rent reductions, adding there would be support for tenants on Housing Benefits or Universal Credit.

“The Government’s decision to enforce rent reductions over a four year period cost Royal Greenwich £33m in lost revenue, leaving us in the difficult position of having to make tough decisions in order to maintain service delivery,” he said.

“Our proposals will be covered by the Local Housing Allowance, which means that for those on full Housing Benefit or Universal Credit there will be no impact, and a lesser effect on those receiving partial benefits.

“Royal Greenwich is committed to supporting residents on lower incomes and the rents for our council properties are still among the lowest in London.”