Social housing tenants in East Suffolk, including those on the Felixstowe peninsula, will gain refunds totalling around £8 million and have rents recalculated after historical overcharging.

East Suffolk Council will provide full refunds to tenants and ex-tenants as it did not fully comply with rent-setting regulations between 2016 and 2022.

The breach of the regulator of social housing's standards related to a council decision in 2014 to start converting tenancies being re-let from social rent to affordable rent, to provide additional funding for new development.

Affordable rents should not be higher than 80 per cent 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.

Cllr Peter Byatt said: "This whole matter has been handled thoroughly well by the officers and cabinet member.

"It is unfair to brand us as the bad guys when the problem was created under a previous administration."

The council itself sent a letter to the regulator of social housing and to tenants in 2022 to explain that a consultant the council employed believed it may not be compliant with standards.

More than 1,000 properties in East Suffolk have been converted to affordable rent without the permission needed since 2014.

Cllr Craig Rivett, deputy leader and cabinet member for economic development, said at a full council meeting yesterday: "No tenant will have a rent increase as a result of the recalculations.

"Every tenant will either be paying the same or less rent than they pay currently."

The recalculations will mean all homes converted to affordable rent will be converted to social rent plus an added five per cent for all homes except retired living schemes – where ten per cent will be added.

This uplift of five to ten per cent is explained in the officers' report by the need for money to build new homes and maintain current ones to a high standard – taking into account new building safety and fire safety regulations and a commitment to ensure all homes have an EPC (energy performance certificate) rating of at least C by 2030.

The current confirmed cost of refunds owed is £6,302,905 and this is projected to increase to £7,203,320 once the audit is complete.

It is estimated a further £385,672 will be owed for the incorrect charging for heating services and £451,431.71 in relation to incorrect rents during the current financial year.

The council was also judged to be non-compliant in certain areas of building safety by the consultant they recruited in 2021, and has since made improvements.

The findings included 93 communal areas with asbestos-containing materials and 90 out of 93 properties requiring a fire risk assessment not having had one.

Cllr Rivett updated the council that they are now fully compliant in the areas of asbestos and fire safety. Lift and water safety is also now completely up-to-standard; electrical safety is almost 98 percent compliant and gas safety is just under full compliance.

The motion to give full refunds and recalculate rents was unanimously approved by East Suffolk Council yesterday.