How We Set Your Rent
Rent and service charges
Your dwelling tenancy agreement gives you full details about your rent, service charges and any other charges. This section gives some background as to how they are set and reviewed annually.
The rent we charge
The rent we charge you covers the use and occupation of your home. The rent we collect is used to pay for the cost of managing and repairing your home together with cyclical such as gas servicing and major improvements like new kitchens.
How your “Formula” rent (formerly known as Target Rent) is calculated
All housing associations and councils have a formula for calculating rents set by the Government. This means rents are set equitably, reflecting the size, condition and location of a property and local earnings, regardless of who the landlord is.
Every property has a target rent and the formula is based on the following factors:
- 30% of the rent is based on local property values in comparison with national averages
- 70% of the rent is based on county average manual earnings compared to national averages
- The average council and/or housing association rent level in the area
- Number of bedrooms and a tolerance of plus or minus 5% (10% for housing for older people). The Trust uses a tolerance of plus 5%.
All new lettings will have their rent set at the target rent level. However, your current rent may be different to the target rent for your home.
Rents on properties not covered by target rents
The rents on a few of our properties are worked out in a different way to that described above:
- Our Affordable Rent properties have their rents set by up to 80% of the equivalent market rent. Check your tenancy agreement to see if this applies to you.
- Shared ownership properties have their rent set in line with their lease agreements
Annual rent increases
The HCA’s (Homes and Community Agency) Rent Standard sets the way rents are increased; from April 2015 rents were increased annually by the Consumer Price Index CPI, as at the previous September, plus 1%. However the Summer Budget over ruled this standard and in July 2015 it was announced that rents would reduce by 1% for the next 4 years with effect from April 2016.
We will give you at least 4 weeks’ notice of your new charges.
When you receive a service that is in addition to occupying your home then there will be a service charge to pay. They cover a wide range of services including: a lift in a block of flats, a door entry system, grounds maintenance, cleaning of communal areas, window cleaning, caretaking services and many more.
We will charge all new tenants for all services they receive and these will be listed in your tenancy agreement. However, if your tenancy started before 2002 you may not be charged for any or all the services you receive.
Service charges will be calculated by us by using a fair proportion of the costs incurred or likely to be incurred in the delivery of the service. The charges will be fixed (meaning that they may not be reviewed annually) or variable (they will be reviewed annually), dependent on the circumstances of the charge.
Fixed service charges will be increased, at the same time as rents, by no more than CPI, for the previous September, plus 1%. Variable service charges will be increased or decreased following the review of annual expenditure.
More information on how your rents are set and increased can be found on the Homes and Community Agency (HCA) web site.