Information About Rent and Service Charges
We know that you want to know as much about your rent and services charges as possible.
Here, we've gathered the information you'll need.
We're Here to Help
We've got lots of information here on our website, including our free to use benefit entitlement calculator.
We're here to help. If you'd like our support, you can call 0300 304 5000 or email info@estuary.co.uk. We have trained staff who can give advice on budgeting and benefits. We can also make affordable repayment arrangements if you're behind with rent.
We're happy to meet at your home, talk over the phone or email, whatever works best for you.
If you need debt advice we can refer you to the Money & Pensions Service, as they have the expertise in this area.
We also have our One Estuary Fund, which may be able to help if you have a sudden emergency.
Rent and Service Charges
Rent and Service charges are needed to maintain and improve the homes and areas we manage. They also support our planned works which include fire safety works, replacement kitchens, bathrooms and to invest in local communities.
Both rent and services charges can vary from one property to another, even if they're on the same street. We have different tenancy types which can be in the same area, or a property may be slightly different meaning the service charge is worked out in another way.
Any or a combination of these things could mean your neighbour could pay a different amount.
Rent Calculations
Your rent amount depends on what type of tenancy you have and what type of rent you say, as well as if you pay a service charge.
Every few years, there is a 53 week year. As our rents are mainly charged weekly, this could affect you. When this happens, we'll let you know and what to do.
If you do not know which type of rent you have, or if you pay a service charge, you can check your tenancy agreement or log in to your online account. The information below should help you more based on your tenancy type.
Shared Ownership
Your rent charge depends on what share of the property you initially purchased. The original annual rental value is calculated by subtracting the value of your share from the agreed sale value and multiplying that figure by 2.75%. This is divided by 12 to give the monthly rent.
Your lease explains how much your rent can increase each year.
Affordable Rent
When a home is let to a new tenant, the rent is set at 80% of the market rental value for a similar property in the same area, excluding any service charge. Our policy is to not go over the Local Housing Allowance (LHA) rates when we initially set affordable rent. This means the rent may be slightly lower than 80% of the market rental value.
When it comes to rent increases, affordable rent is calculated differently, but only if you also pay a service charge.
Where you have affordable rent and pay a service charge, we must include both elements when calculating your new rent. So, when we add our increase, we'll add a percentage to the total of these two amounts. Once we have worked this out, we deduct what your service charge is going to be, and this gives us your new rent.
Where you pay a service charge, this part can increase but the good news is it can also decrease. 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 receive your personalised rent increase notification, this will give you a breakdown of your new rent and service charge, if you have one.
London Affordable Rent
Some of our new homes in the London Borough of Havering are let as London Affordable Rent. The rent for these homes when they were first let was set in-line with what the Mayor of London had agreed.
For future rent increases, these are treated in the same way as social rent. If you have a service charge, then this is added to your rent amount.
If you pay a service charge this element can increase, but it can also decrease. 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 receive your personalised rent increase notification this will give you a breakdown of your new rent and service charge if you have one.
Fair Rent
Fair rent charges are reviewed each year. We apply to the Valuation Office to review and re-register your rent every two years. Every other year, your rent is reviewed against the existing Rent Register and the social (formula) rent.
For customers with social rental fair rent tenancies, if the current rent falls below both values, we can increase it up to a maximum of the Consumer Price Index (CPI) plus 1%.
If you also pay a service charge, this may increase but it could decrease as well. 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 receive your personalised rent increase notification, this will give you a breakdown of your new rent and service charge, if you have one.
Social Rent
The Government sets what we are allowed to increase our rents by each year. This is calculated by using a rate of inflation called the Consumer Price Index (CPI) plus a percentage.
Social rent (formerly ‘target rent’ but now also known as ‘formula rent’) is calculated separately from service and other charges. The calculation is based on a formula that takes into consideration:
- an independent property valuation,
- the number of bedrooms in your home,
- the average household incomes in your local authority area.
We are required to use the formula, as it is provided by the Regulator of Social Housing.
If you also pay a service charge, this may increase but it could also decrease. 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 receive your personalised rent increase notification, this will give you a breakdown of your new rent and service charge if you have one.
Market Rent
We have a small number of homes which are let in the same way as private rentals. We review the rent each year and look at the private rents in your local area. If these have increased, then your rent will increase in line with them.
If you live in a home where we also provide services in communal areas, then you will pay a service charge as well. A service charge may increase but it could decrease. 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 receive your personalised rent increase notification this will give you a breakdown of your new rent and service charge if you have one.
Service Charge Calculations
In its most basic form, service charges pay for the maintenance of communal areas around your home.
This includes things like cleaning, grounds maintenance, lighting and electricity. The charges also cover the cost of maintenance and servicing of shared equipment in your block or estate, such as lifts, door entry systems, electronic gates and fire equipment.
The services you are charged for depends on where you live and what is in your lease or tenancy agreement. If you live in a block of flats and the services are available for all to use in that block; then the charges will be divided equally between the number of flats.
For shared owners and leaseholders who live in a block, your lease may advise what your share of the service charge would be.
A Brief Overview of Charges
The services you pay for are included in the changes to your rent letter, which you receive each year.
Management Charge
Much of what is in the letter is self explanatory, but we're often asked what a Management Charge is for. This is goes towards the running of our business, staff and office costs. It's calculated at 15% of the total service charge items.
Replacement Provision and Sinking Fund
Other items which sometimes cause questions are Replacement Provision or Sinking Fund.
These are used for major repairs or the replacement of communal equipment such as your lift, fire system, emergency lighting or door entry systems, play areas or future communal tree pruning.
Where your lease or tenancy allows, a sinking fund, similar to replacement provision is set up to help cover costs for of major works as and when they come about. You will contribute to the fund as part of your overall service charge contributions. We set the money aside in an interest-bearing account until the funds are needed. If you are a leaseholder and you choose to sell your home, your contributions to the fund remain in place and are passed on to the new owner.
We calculate the replacement provision by assessing how much we estimate the work will be. Then charge this over a period of years which equals the time we think the item or work will last.
Property Management Companies
On some of our estates, there is a Property Management Company in place who carry out all or some of the services. If you live in a home where these services are provided by another company, we will pass on the costs via the service charge. Some Property Management Companies operate a different financial year to Estuary, which means that their latest figures may not be available when we set your service charge.