Rent and Service Charges

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. For 2024 your rent will increase in line with the terms of your lease.

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. The total will include any service charge.  Our policy is to not go over the Local Housing Allowance (LHA) rates when we initially set the 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. 

If you don't pay a service charge your rent will increase by 7.7% from April 2024. 

Where you have affordable rent and pay a service charge, we must include both elements when calculating your new rent. So, this year we'll add 7.7% 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 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.

Your 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 are due an increase for 2024, your rent will be increased by 7.7%.

If you also pay a service charge this 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.

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. This year your rent will increase by 7.7%

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; and
• 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 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.

If your Housing Benefit is paid directly to us by your Council, we’ll inform them of any changes.  But you still need to let them know yourself. They may still want to see your rent review letter, so keep it safe. If you lose it, we can send you a copy if you contact us.      

If you receive Universal Credit, you must tell the Department of Work and Pensions about any changes. You cannot do this until the date of the change or after. You must update your journal with this information. If you don’t, it may impact on the amount of Universal Credit you receive.

They may want to see your rent review letter, so keep it safe. If you lose it, we can send you a copy if you contact us.   

If you pay by Direct Debit or Recurring Payment, we’ll make the change for you.  You'll receive a letter from allpay with details of your new payment and the day on which it will be taken. We’ll be sure to give you at least one week’s notice.

If you have a rent arrears repayment agreement or a court order for arrears, we'll include this amount when changing your direct debit or recurring payment.

You'll need to contact your bank to amend the amount of the standing order.  

Remember, you need to leave enough time for the bank to make the change.  So, make the change as soon as you receive your rent increase letter.  You also need to remember to include any additional amounts where you have agreed to pay extra rent due to arrears or a court order.

If you need help with calculating what you need to pay, then please contact us.

We've provided a breakdown of the relevant charges in your notification letter, sent at the end of February 2024.  

Replacement provision is 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.