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People on low incomes face a hike in rent and service charges for their council homes.

Councillors in Wolverhampton want to plough hundreds of millions into the city's housing stock over the next five years.

But they believe a 7.7% rise in rent as well as a 6.7% increase in service charges will be needed to balance the books.

A pot of £300,000 will be put aside to help people experiencing financial hardship if the changes are approved, cabinet papers have revealed.

City of Wolverhampton Council cabinet members will meet on Wednesday to discuss a Housing Revenue Account Business Plan before it is sent for approval by full council.

The proposals would see £100m provided for new homes, £67m used to remodel estates and more than £200m put aside to improve properties and tower blocks over the next five years.

About £40m will also be earmarked to complete the refurbishment of the Heath Town estate, according to a report released in advance of the meeting.

But tenants will have to foot some of the bill so existing council homes can be kept up to scratch and new ones can be provided for 6,334 people currently on the waiting list.

About 77% of Wolverhampton council tenants have full or partial housing costs covered by Housing Benefit or Universal Credit and are likely to receive government support to pay all or part of the rent increase, councillors believe.

"The Council understands that any increase in rent and service charges will place an additional burden on many families who are already struggling financially," the report read.

Help for those struggling

The document added the council's Financial Well Being Strategy aimed to help those at risk of hardship amid the cost-of-living crisis.

Due to the rent increase, the report continued, the revenue budget would include £300,000 to help those facing financial hardship.

The pot would be kept under review during the 2024-2025 financial year, with usage and adequacy reported to councillors through quarterly budget monitoring reports.

"Not applying the [rent] increase, or applying a lower increase, would reduce the resources available to fund core services and the capital programme," the report stated.

"The council would have to reduce the number of new homes.

"Programmes to remediate non-traditional homes [and] low and medium rise estates would need to be postponed for several years allowing the condition of the properties to deteriorate."

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