As explained in our January newsletter, the rents we charge for social rent tenants are set using a Government formula. This is called the ‘formula rent’. The formula is based on the value of the property, local income levels and the size of the property and for most existing tenancies will mean a rent increase of 2.7% (1% + CPI). Notice of rent increase letters are being sent out at the moment.
The Government’s policy also contains ‘rent flexibility’, allowing housing associations to set rents at up to 5% above formula rent. We will be using this flexible rent level for new social rent tenancies.
From April 2020, we are proposing to apply the 5% flexibility to new social housing lettings. This will ensure that rents are affordable for our tenants whilst remaining a strong, financially viable business (our core services such as repairs and housing management are paid for by our rental income – you can see more details about how your rent is spent in the Annual Report to Tenants).
The flexibility will also allow us to build more new homes to help meet the high demand for social housing; we receive limited Government grants which cover only some of the costs of building homes. Charging the 5% flexibility will enable us to build more homes for people in housing need.
We are currently reviewing our rent policy to reflect the changes in the Government’s new rent standard. If you’re interested in being involved in the review or in reviewing other policies, join our Strategy and Policy group.
If you have any questions or comments, please contact us at firstname.lastname@example.org.