Newham Council is planning to hike its rents by 7 per cent, leaving residents paying more during a cost-of-living crisis.

As well as a 7pc increase in council rents, the authority is planning to up its council tax by 4.99 per cent under draft proposals for the 2023/24 budget that will be presented to cabinet next week.

In an online report outlining its plans, the council admitted raising rents was “challenging” considering the “poor quality” of a lot of the borough’s housing stock, but that it must raise council rent and council tax to keep up with inflation.

It said: “An increase in council rents of 7 pc is proposed, which if agreed would be the maximum increase allowed under the legislation.

“Again, the balance between limiting increases and providing income to fund services is challenging, especially given the poor quality of much of the housing stock in the borough and the need to fund investment in it.”

It comes after chancellor Jeremy Hunt announced in the autumn statement last month that social housing landlords would be able to increase its rent by a maximum of 7 pc in the next financial year.

Polly Neate, the CEO of Shelter, warned hiking rent by 7 pc would have a “disastrous impact on thousands of social tenants” and that the figure was “too high”.

The council said the reasons for upping its services was down to “12 years of austerity, covid-19 and now the cost of living crisis”, adding the borough’s population had increased by 14 per cent and has put pressure on its services.

On the council tax increase, the report said: “If agreed, this would be the maximum increase allowed under the legislation and represents a difficult balancing act between providing income to fund services and the impact on residents, for whom support from the council of up to 90 per cent is available for the most financially vulnerable.”

The report said the council is trying to save money where it can “just to stand still”, but acknowledged 4.99 pc council tax increase is “still a significant cost for residents”.

Newham Council’s cabinet are set to hear the proposals on Tuesday, December 20 and a final budget report will be presented to full council in February 2023.