2023/24 rent increases

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  • #281847
    cbbc
    Participant

    One of our Specified Accommodation providers who is an RP has submitted a rent increase for one of their properties from 16/01/2023, the rent at this address hasn’t increased since 2021/22. As they’re an RP they can base their rent increases on the CPI + 1% figures but they have submitted an 11.1% increase. Am I right in thinking that the 11.1% increase for supported housing only applies from April 2023 onwards and if they’re having an increase from January 2023 it needs to be 4.1%, which was the April 2022 figure?

    Not sure if I have interpreted this correctly as I can’t find any actual DWP guidance regarding this years increases apart from the policy costings document. Any thoughts would be much appreciated.

    #281936
    leonardpayne
    Participant

    I think you’ll find that even from April 23, the max increase is 7% for Rp’s and other social housing.
    Non social housing eg charities which are not RP, are CPI+1% equalling 11.1%
    but I stand to be corrected

    #281945
    peterdelamothe
    Keymaster

    The Government has said it will impose a 7% rent ceiling to social housing rent increases in the 2023-24 financial year as a temporary measure amid the cost of living crisis.

    Detailing the plans in a response to a consultation it conducted on the policy, the Government said it believes the limit on rent increases “strikes an appropriate balance” between protecting social tenants from high rent increases and ensuring that Registered Providers of social housing are able to continue to invest in new and existing social housing and provide decent homes and services to tenants.

    Current policy allows landlords to raise rent by consumer price inflation (CPI) + 1 percentage point each year, meaning that without intervention, social housing rents could rise by up to 11.1% in 2023-24.

    Under the 7% rent ceiling, the Government estimates that tenants will pay £200 less per annum than if the full increase had been applied. The 7% rent ceiling was the highest proposed by the consultation. It will apply to the 2023-24 rent year only.

    #281946
    peterdelamothe
    Keymaster

    The Government emphasised rent ceiling will in no way relieve landlords of their responsibility to ensure that residents are safe in their homes, including complying with statutory health and safety obligations.

    But where a provider is no longer able to meet these requirements, “or where complying with the revised Rent Standard would jeopardise a Registered Provider’s financial viability”, landlords can still apply for an exemption (or the disapplication of the revised Rent Standard), as per the processes under the current Rent Standard, the Government stated.

    Supported housing will be exempted from the 7% rent ceiling due to the tighter operating margins, the Government said.

    Responding to the policy, the National Housing Federation (NHF), which represents housing associations that house approximately six million people across England, said the Government’s response considered all of the points that the NHF raised in its submission to the consultation.

    “For example, the government understood that in most cases, housing associations would not have elected to raise rents by the permitted CPI+1%, even without government action,” a NHF spokesperson noted.

    The NHF added: “[The Government] is also keenly aware that holding rent increases below CPI+1% will mean housing associations are able to raise less rental income than they otherwise would, impacting their ongoing investment in existing and new homes.”

    Alongside its response to the consultation, the Government has issued a final direction to the Regulator of Social Housing, requiring the regulator to set the new standard from 1 April 2023.

    #281950
    peterdelamothe
    Keymaster

    “Supported housing will be exempted from the 7% rent ceiling”….I think this might be intended to be wider than Leonard suggests.

    Here we are

    Supported housing (as defined in the Rent Standard) is exempt from this ceiling.

    https://www.gov.uk/government/publications/rent-standard/rent-standard-april-2020

    #281952
    peterdelamothe
    Keymaster

    Note that the 7% restriction does apply to Shared Ownership property.

    Also that there is wide support for a social tenant rent strike / rent increase strike.
    Not sure what the impact of that would be if providers reduced non-HB rents.

    Joe Halewood (well known in the housing arena) writes:
    ·
    29 Jan

    Private renting is more affordable than social housing! SRS tenants pay a higher percentage of household income on rent than PRS tenants

    #282035
    MarinaJeppo
    Participant

    With regards SA being exempt for the rent ceiling, the guidance on the link refers to ‘Specialist support housing’. My Space Housing have confirmed in writing (as per the RSH) that they do not provide SSH, would that remove their exemption from the 7% rent ceiling?
    Our LA has a number of HA’s, Charities and CIC’s that while may meet the vague minimum CSS criteria for exempt status – some are providing minimum 1-2 hours support (IHM), no property adaptions made, and the properties previously used as general needs. This wouldn’t appear to be SSH and therefore not potentially protected for the ceiling?

    #282043
    cbbc
    Participant

    I think my original question has been answered, which was can they apply the increase from Jan 2023? – the answer is no!

    However, I thought that supported housing providers were exempt from the 7% cap and could charge 11.1% from April. In the policy costings document for the Autumn Statement 2022 it states that ‘this policy applies to social housing provided by RPs but supported housing provided by RPs are excepted from this and are therefore allowed to charge CPI + 1%’ or words to that effect. The rent standard mentions specialist supported housing but this policy document does not therefore I took this to mean supported housing in general.

    So in the example above, MySpace are no longer Specialised Supported Housing but they still could provide Supported Exempt Accommodation and therefore be classed as supported housing and be exempt from the 7% cap. Is this correct?

    #282047
    Alistair Costelloe
    Participant

    My understanding on Myspace is that as they’re not providing SSH they’re either providing non-social supported housing as an RP, not subject to the cap, or they’re providing social supported housing which should be set using the rent formula + 10%, and be subject to the rent increase cap.

    If they’re providing non-social supported housing and nothing else within their portfolio, the RSH will move to deregister them as they no longer meet the criteria for registration.

    #282068
    leonardpayne
    Participant

    I guess I’m confused as to the difference between SSH and good old regular ‘supported housing’
    What I used to refer to as ‘exempt supported’.
    There appears to be a lot of branches and side turnings.

    In our own case we are a registered charity providing supported housing with a 24/7 support service.
    We are not a RP. My understanding is that our increased could be CPI+1%
    Equals 11.1%

    Our LA likes to refer to us as social housing and having done the spreadsheets again
    We have agreed a 6.4% increase from April 2023 which avoids anyone throwing their toys out

    #282415
    Tina L
    Participant

    I guess I’m confused as to the difference between SSH and good old regular ‘supported housing’
    What I used to refer to as ‘exempt supported’.
    There appears to be a lot of branches and side turnings.

    I too am confused. I have an RP who provides supported exempt accommodation whose rent increase from April is 16.79%. I initially thought that this was acceptable because they are providing supported accommodation so are excluded from the 7% ceiling. Can someone point me to where they are told it can only be CPI + 1% please?

    ta

    #282416
    leonardpayne
    Participant

    I don’t want to add to the confusion but i originally thought that all social housing was restricted to a 7% increase and that included RP (Registered provider of social housing)

    I was wrong – Mea culpa

    Providers of supported accommodation are not restricted to 7% whether they are RP’s or not.
    It’s CPI+1% = 11.1%

    Therefore your RP case providing support is restricted to 11.1% although even this has to be justified. It can’t just be added on. For example our charity could ask for the 11.1% but in looking at our figures, I couldn’t justify it so we went for 6.4% which was acceptable.

    A useful link is

    https://www.localgovernmentlawyer.co.uk/housing-law/397-housing-news/52548-social-housing-rent-increases-to-be-capped-at-7-next-year-government-announces

    and I am sure you can find things on the .gov websites.

    As ever, yiour mileage may vary.

    #282524
    peham28
    Participant

    Hi, can anyone advise whether sheltered housing type accommodation (warden controlled etc) are exempt from the 7% increase, as one of our RP has increased they elderly tenants rent by 11.1% and then doubled the service charges.

    #282544
    mickbullock
    Participant

    My understanding is that Sheltered accomodation would be exempt from 7% cap ONLY IF it is treated as Specified Accomodation (some sheltered is and some aren’t).

    Don’t think there is a formal cap on service charges and communal fuel charges, in particular, are likely to increase considerably.

    #282548
    leonardpayne
    Participant

    My understanding is that Sheltered accomodation would be exempt from 7% cap ONLY IF it is treated as Specified Accomodation (some sheltered is and some aren’t).

    Don’t think there is a formal cap on service charges and communal fuel charges, in particular, are likely to increase considerably.

    If the core rent is increased by 7% and the service charges are increased by 50% then LA’s are entitled to throw their toys out of the pram.

    The rules do not differentiate between ‘core rent’ and the rest of it.
    IMHO the 7% and 11.1% apply across the total rent which is payable.

    I stand to be corrected of course.

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