Rent and service charge update
You may have heard in the news about rents for social housing being reduced by 1% per year for four years. If you were a tenant with us in April 2016 and/or 2017, you will have already had an annual 1% reduction. The rent statements issued in February 2018 will show your rent for April 2018 onwards as being reduced by a further 1%.
For one year only from April 2016, the rent of Sheltered (also known as Housing for Older People), Extra Care and Supported properties was not reduced and instead received an increase in line with what is known as the Consumer Price Index (CPI), which was -0.1% plus 1%. This formula was agreed with the Government, meaning an increase of 0.9%. This exemption has now ended.
Your rent is calculated according to six factors:
- The size of your home
- The location of your home
- The date you first let your property
- Your tenancy agreement
- Laws laid down by Government
- Whether your home is classed as social housing or ‘affordable rent’ which is 80% of the market rent.
You may not have the same rent as your neighbour or the same style house or flat in your area.
As described above, your rent will depend on a variety of factors, including the calculation method at your tenancy start date. Your neighbour may have a different calculation and may pay different rent as a result.
The easiest way to think of the Consumer Price Index is as a very large shopping basket containing all the goods and services bought by households. The price index estimates changes to the total cost of this basket.
Your Universal Credit or Housing Benefit claim is your responsibility.
If you are claiming or being paid Universal Credit you must send the Department for Work and Pensions a copy of this letter to make sure they pay you the correct amount. If you do not tell them about this rent change, you could lose benefit to which you are entitled or have to pay back any overpaid benefits.
If we receive Housing Benefit direct from your Local Authority, we will also notify them of the change to your rent and service charge (where relevant). However, you must always send your Local Authority a copy of your rent review letter to make sure they pay you the correct amount of Housing Benefit. You should talk to the Local Authority straightaway if you think you are getting the wrong amount of benefit. If you do not tell them about this change, you could lose benefit to which you are entitled or have to pay back any overpaid benefits.
Your rent is used in the following ways:
- To pay for repairs and maintenance (those which are the landlord’s responsibility)
- To manage your housing service
- To pay for buildings insurance
- To repay money borrowed by Sanctuary Group to build or modernise your home or to build new social housing.
In 2002 the Government amended the way that housing associations set their rents so that ultimately all rents charged by housing associations and Local Authorities shall be the same for the same type of property in the same area. The Government used a formula to calculate rents based on the number of bedrooms, property values, and average earnings in each area of the country. This was called target rent.
In July 2015, the Government announced changes to the regulation around social rent. The previous guidance (issued in April 2015) allowed housing associations to increase rent annually up to Consumer Price Index (CPI) plus one per cent. The Welfare Reform and Work Act signed into law in March 2016 means that most categories of social rent are to have reductions of one per cent per annum for four years, starting from April 2016.
Your rent review has been undertaken in light of this new legislation. The above changes only impact residents who are on a social rent (and exclude certain tenancies for instance those on Fair Rents).
From April 2016, for one year only, Sheltered (also known as Housing for Older People), Extra Care and Supported properties were exempt from the rent reductions (and received an increase of CPI plus one per cent in line with the Rent Standard). This exemption has now ended for most of these properties.
Secure tenancies, issued before January 1989, follow separate Valuation Office Agency guidance and have their rents reviewed every two years. Any proposed changes have to be registered with the rent officer, who can determine what rent should be charged. The rents for these tenancies may change at a different rate to other tenancies.
You pay a service charge if we provide you with services for the upkeep of communal areas such as gardening, window cleaning, door entry systems, lifts, etc. plus an administration charge to cover the cost of managing these services.
We can provide you with details of the services and charges which apply to your property. If applicable to your property, a service charge schedule is provided with your rent review letter.
Each year we set a service charge budget for each scheme or group of homes. The budget is our estimate of what we expect to spend on the various services.
However, the position may change, for example, if there are new contractors or if new services are introduced. The starting point for our estimate is what we have spent in recent years and what we anticipate the cost of the services will be in the year ahead.
We cannot know in advance the exact amount of money we will spend on your service in the next financial year. The routine charges are calculated using the last known actual charges, plus an allowance for inflation and known future costs.
If you disagree with any part of your service charge it is important that you contact us. You will need to tell us:
- What part of the charges you disagree with for example ‘the non-contract maintenance to the door entry system’;
- What amount you are disputing, for example ‘it cost £9.08’;
- Why you are disputing it, for example ‘the block of flats I live in does not have a door entry system’.
With this information, we will be able to investigate the issue(s) for you but it may take some time:
- We will investigate your concerns;
- We will give a full response;
- If we agree with you, we will tell you what we are going to do to put things right.
Tell us if you are not happy about the services you receive by contacting our Customer Service Centre number printed on your rent letter.
Supporting People funding used to be provided by local authorities to support vulnerable people to have greater independence at home. This funding has been withdrawn by the Government.
This ensures that amounts charged for care and support reflects people’s income, including disability benefits and allow for disability related expenditure. The assessment will identify how much you can afford to pay.