How do you work out my rent?
Note: This information only applies to customers who pay social housing rent. It doesn't apply to shared owners who pay rent or to customers who rent through Intermediate Market Rent schemes.
In 2001, the Government introduced rent restructuring rules. We follow these rules to work out your rent using a Government formula. Before March 2012, we have to move your rent to what is known as a ‘target rent’. The formula applies to rents only (not service charges). Target rents can be above or below the rent you currently pay.
Your rent is based on:
- the average earnings for the area compared to the national average
- the number of bedrooms in your home
- the value of your home in January 1999
- the national average housing association property value in January 1999.
Any change in your rent will depend upon the amount of rent you pay now compared with the new target rent. The Government has set a limit on rent increases. This limit is worked out in the following way:
We add 0.5% to the Retail Price Index (RPI). (RPI is more or less another term for inflation).
Then, we either add or take off £2.00 per week in order to move to the ‘target rent’.
Once a property reaches its target rent, the Government limit the annual increase to 0.5% in addition to the Retail Price Index.
If you’ve been paying more than the target rent, we have to lower it. In this case, your rent will either have decreased already or will decrease to the new lower level in the future.
Each year, our Group Board, which includes residents, approves our budget including rent levels and rent increases.
Examples
In both of the following examples, we have assumed a Retail Price Index (RPI) figure of 1.0%.
If a property has already reached its target rent
Imagine the rent on a home is £100.00 a week and the Retail Price Index (RPI) is 1.0%. The new rent would be:
Existing rent of £100.00 plus the RPI of 1.0% (£101.00) plus the additional 0.5%, giving a new rent of £101.50
If a property hasn’t reached its target rent
In this example, imagine the rent is £60.00 a week and is below the target rent of £65.00. In this case, the amount by which we can increase the rent is limited to the Retail Price Index (RPI) + 0.5% + £2.00 a week. The new rent would be:
£60.00 + 1.0% (RPI) + 0.5% + £2.00 = £62.90
Further information
Find answers to more frequently asked questions about rent and service charges.
Find out how to pay your rent and where you rent goes in the rent section of our website.
