Social housing rent rates for new build properties will rise by 14 per cent, increasing the amount paid in housing benefit in Reading.

'Adjusted target rent' will be between 32 and 57 per cent of average market rent - below the maximum of 80 per cent that the council is able to charge for social housing.

The adjusted rate will apply to the 57 new build homes being developed at Conway Close, as well as 84 new build homes in phase two of the council’s new homes programme.

Councillor John Ennis, lead member for Housing, said: “The point of it is to raise the money in the HRA to build more houses and keep the standards high in our current stock.

“The rent will still be way below the private sector or affordable housing. You are getting a brand-new house. There are some brilliant houses.”

The new rate was approved at Reading Borough Council’s (RBC) policy committee, on November 26, but is not a blanket rate.

The report from the meeting states that the impact on discretionary housing payment - fixed period financial support for help families who cannot pay their rent - would be marginal.

The local authority expects the adjusted rate to be almost entirely covered by housing benefit.

The papers from the policy meeting state that the proposal will help to provide homes for those in most need, while remaining financially sustainable.

Exceptions to the rate include mixed tenure developments, where a proportion of apartments will be at the adjusted rate.

Schemes supported with a grant from Homes England, where the grant was based on properties being let at social rent, will also be exempt.

In 2015, the government mandated that council’s reduce social housing rent levels by one per cent each year from 2016-20.

Cllr Ennis said the annually mandated reduction was reducing the housing budget

New builds, however, can be let at ‘affordable housing’ levels – up to 80 per cent of the average market rent for the area.

The new rate is called ‘Adjusted Target Rent’ because it is set at the level all social housing rent would have been but for the mandated reduction.

The adjustment is also expected to add £3.7m to the council's Housing Revenue Account over its 30-year business plan.