Rent regulator policy statement on rents for social housing

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  • #283064
    Junep
    Participant

    Hi

    Can I ask a really daft question. Section 2.17 in the policy statement on rents for social housing states the following under the sub-heading for ‘changes to rents’. What does it mean when they state that the provider can (may) only move the rent up to the formulae rent when the property is re-let?

    2.17 Registered providers must adhere to these limits on rent increases even if a tenant’s rent is below formula rent, or if they have previously applied a lower – or no – annual increase. Where this is the case, the provider may only move the rent up to formula rent when the property is re-let following vacancy (subject to the rent cap).

    Forgive my ignorance on this matter, as I know it does refer to not increasing the rent more than the CPI as at September of the previous year (rather than CPI + 1 percentage point) each year until the rent is bought within the rent flexibility level.

    I suppose I just want to understand if there is a difference between existing and new tenants as to when the the 10% is applicable (for supported housing), as it seems to suggest that it only applies to rent periods that begin in the 12 months from 1 April 2023 to the 31 March 2024 indicating a new tenancy and not a rent increase from April 2023.

    It is just probably a play on words but I do not want to be ambiguous in my understanding of 2.17.

    thanks for any responses
    kind regards
    June

    #283073
    Peter Barker
    Keymaster

    Para 2.17 prohibits catch-up rent increases for existing tenants whose rent is less than the formula and/or has not been increased or increased by less than the maximum allowed in previous years. They can’t say “because you’ve been paying less than we could have charged you for the past five years, we are increasing your rent by 60% this year to what it would have been if we had charged the maximum possible in past years”.

    They can only do that when a new tenant moves in.

    The reference to rent periods beginning in 2023/24 is something different. The significance of 23/24 is that any scheduled rent increase falling in that period is limited to 7% for general needs properties even though last September’s CPI was higher. “Rent period” means the period over which a certain rent is payable – not necessarily a new tenancy, just a new rent following an increase.

    I would resist the temptation to do the regulator’s job. As you can see from para 2.18, a rent above the limit is not necessarily unlawful, it’s just that they have to slowly phase it back within the limit. I wouldn’t look at the formula as if it is a tenancy condition – consequences for failing to abide by the formula are more at the organisational level than the individual landlord/tenant level.

    #283080
    Junep
    Participant

    Thank you Peter, that helps a great deal. I have a consultant acting on behalf of one of our registered providers and they are refusing to provide a rental breakdown of the charges from April 2023. They will, and have, provided the annual report to customers document but they will not tell me how the core rent, eligible service charges, and ineligible service charges are made up.

    The stated during a telephone conversation that the rent comes under the remit of the regulatory body and they instruct the registered provider on how to calculate the formulae rent etc. I was categorically told it wasn’t for the LA to question and to accept the figures. I wasn’t impressed but polite and quoted my consequential regulations relating to rent and schedules relating to service charges. I didn’t get very far so I am left with the decision on what to do next, as my regulations were dismissed out of hand.

    My apologies for the ramble.

    Kind regards
    June

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