How Are Rents Calculated?

The formula for calculating Housing Association rents is set by the Government. They tell us the maximum we can charge. If you are interested in reading more about this, you can view the Government Policy Statement document for April 2020. This remains relevant for 2021.

Most Housing Associations use the September Consumer Price Index (CPI) rate plus a percentage allowed by the Government. For 2021-22 it is 1%. By combining the CPI and annual allowable increase allowed, we get the overall percentage increase.

For 2021-22 by the September 2020 CPI figure is 0.5%. This plus 1% means most of you therefore will have a 1.5% increase in your rent.

What Happened In April 2021?

The Government has told us we can increase rents by a maximum of the Consumer Price Index (CPI) plus 1%. Our Board decided that to keep the business running and meet residents’ priorities, we will increase by the maximum which is 1.5% (September 2020 CPI 0.5% plus 1%). Most of you will therefore have a 1.5% increase in rent.

However, the rent type you have determines what the overall change will be. Different tenancy types are calculated differently. If you have an affordable rent, a social rent or a fair rent then please see the relevant section below under 'How Has My Rent Changed?'

If you do not know what rent type you have, you can check your tenancy or your rent statement on My Estuary.  Alternatively, feel free to contact us on 0300 304 5000 where we will be happy to help you.

The following table shows what the 1.5% increase means for a range of example rents:

A 1.5% Rent Increase. Please note these are examples only.
Last Year's Rent
From April 2020
New Rent
From April 2021
£95 £96.43
£120 £121.80
£155 £157.33
£200 £203.00
£245 £248.68

 

How Did My Rent Change?

How Did My Rent Change?

How Are Our Rents Calculated?

Here we will explain how rents are calculated for our social housing rented homes.

If You Have An Affordable Rent

If you have an affordable rent and pay a service charge, there is a different calculation. If you do not pay a service charge, your rent will increase by 1.5%. However, there are some exceptions to this, if a new tenancy was granted within the last 52 weeks.

Where you have an affordable rent and pay a service charge, we must include both elements when calculating your new rent. In other words, we must add the rent and service charge elements and treat this as one amount. Then we multiply this by the increase (1.5% for 2021-22). Once we have worked this out, we deduct the cost of your service charge, and this gives us your new rent.

For instance, if you have a rent of £150 per week and a service charge of £20 per week, the sum would be £150 + £20 = £170,

£170 + 1.5% = £172.55

£172.55 - £20 = new rent of £152.55.

Where you pay a service charge, this element can either increase or decrease. Each year we estimate the cost of the services and this figure is set for the whole year, despite how much we spend. This is called a fixed service charge.   

When you received your personalised rent review notification, it gave you a breakdown of your new rent and service charge, if you have one.

If You Have A Social Rent

Tenancies with a social rent have increased by 1.5% from April 2021. There are some exceptions to this, such as where a new tenancy was granted within the last 52 weeks.

If you also pay a service charge, this could either increase or decrease. Each year we estimate the cost of the services and this figure is set for the whole year, despite how much we spend. This is called a fixed service charge

As an example, if you had a rent of £150 per week and no service charge, your rent will have increased to £152.25 per week. However, if you also pay a service charge, this too may have increased. This is explained in the example below.

  • Rent: £150 + 1.5% = new rent £152.25 per week
  • Service charge: £23.50 increased to £24.75 per week

Total to pay: £152.25 + £24.75 =  £177.00 per week

When you received your personalised rent review notification, it gave you a breakdown of your new rent and, if you have one, your service charge.

If You Have A Fair Rent

If you have a fair rent, your rent only changes once every two years. If you are due a change in April 2021, your rent has now increased.

Where there have been no major changes to the property, your rent is subject to the Maximum Fair Rent legislation.

The Maximum Fair Rent calculation is based on the existing registered rent multiplied by a figure. This figure is based on the change to the Retail Price Index from the last registration to the current registration plus 5%. Then it is rounded up to the next 50 pence.

The Maximum Fair Rent calculation works out more than the Consumer Price Index (CPI) + 1%, so for fairness and consistency we have only increased your rent by 1.5%.

If you also pay a service charge, this may have either increased or decreased. Each year we estimate the cost of the services and this figure is set for the whole year, despite what we spend. This is called a fixed service charge.

When you received your personalised rent review notification, it gave you a breakdown of your new rent and, if you have one, your service charge.

Any Questions?

Any Questions?