Thousands of Brits owed £2million in rent refunds after council error
Thousands of Brits are owed more than £2million in rent refunds after they were overcharged by their local council.
Those affected were council house tenants in East Suffolk with 3,754 people still waiting for refunds from the local authority.
The issue stems from a 2014 decision that saw the council start converting tenancies from "social rent" to "affordable rent." The move was intended to create additional funding for new housing developments. Affordable rents should not be higher than 80% of the rent expected in the area.
This means they can be more expensive than social rents, which should not be higher than a "formula rent" figure based on the property’s value and size and low-income levels. Overall, around 9,280 tenants were impacted and were charged more than they should've.
In February 2020, East Suffolk Council – which was created in 2019 by merging the two smaller district councils of Waveney and Suffolk Coastal – reported itself to the government's Regulator of Social Housing for the incident. After a four-month investigation, the regulator confirmed the council had not complied with rent-setting regulations between 2016 and 2022.
In response to the findings, East Suffolk Council said it would reimburse tenants who had been overcharged and began the process in August 2023. At the time, tenants were sent letters explaining the situation and what the process for refunds would entail. East Suffalk council said it would contact former housing tenants after the current had been refunded.
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In the update to councillors last week, it was revealed that 1,060 affected tenants had been sent a letter inviting them to apply for a refund but have not yet requested one. A further 2,694 tenants had not been contacted although the authority was in the process of doing so and would send letters "as quickly as possible". However, East Suffolk Council warned that the chance of locating all those affected was "unlikely".
A council report said: “We have been regularly following up with these tenants, reminding them to apply and providing copies of letters where requested. In the majority of these cases, we have refunded the rent account in the meantime."
On its website, the council explained that if your rent was covered entirely by Housing Benefit, then you would not be given a refund. This is because the overcharge affected Anglia Revenues Partnership (ARP) and not the individual tenant. The amount you have been overcharged will instead be refunded back to the Department for Work and Pensions (DWP), and the Housing Benefit will be reduced based on the correct rental figures. The council has confirmed that all rental charges are now correct.
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