From 1 April 2003 the government changed the way we can increase your rent. This meant that all housing associations had to change their procedures to follow the government's new social housing rent restructuring programme. This page tells you what it is all about and how it affects you.
Why?
The government wants all social housing rents to be calculated the same way. They have told all housing associatons how to calculate rents (the target rent) and that over the 10 years from 1 April 2003 they must move all rents to target rents.
|
What?
The way your rent increase is worked out is now different. In the past, all rents increased by a percentage set by Soha (generally inflation +1%), but since 1 April 2003 everyone's rent will increase or decrease by an amount that will move their rent towards target rent.
|
When?
Nearly all rents must reach target rent by 31 March 2012. This sounds like a long way off, but in order to get there, we have been making rent changes gradually and this began with rent increase in April 2003.
|
|
For tenants that have moved in since 1 April 2003 or those that have already reached target rent, rents will increase by a percentage set by the Housing Corporation (the national government agency that regulates social housing landlords). This is normally inflation + 0.5%.
|
|
What are target rents?
A target rent has to be calculated for every home using a formula given to Soha by the government. It is based on affordability in Oxfordshire and the value of the home you live in. You can find out your target rent by logging on to the Tenants' Area of this website or by contacting Customer Services.
Target rents will increase by the percentage set by the Housing Corporation each year, which is normally inflation + 0.5%.
How will rents get to target rent?
Soha has produced a Rent Plan, which has been approved by our Board and discussed with the Tenants' Forum. This sets out how Soha will calculate target rents and how rents will move to get to target rents by 31 March 2012.
The approach can be summarised:
|
|
|
|
|
|
|
|
£ |
Rents that were close to target rents were moved there in April 2003. |
|
|
|
£ |
New tenants pay target rents from when they move in. |
|
|
|
£ |
All other rents are moving to target rents evenly over the 10 years. |
|
|
|
£ |
There is a maximum increase each year of £2 per week on top of the basic rate of increase (inflation +0.5%). |
How are the values worked out?
The formula requires valuations of properties at 31 January 1999 to be used. To keep things simple, Soha has divided all properties into 14 areas and obtained average values for all properties of a particular type within each area, eg a 3 bed semi in Thame. These will then be used to calculate the target rent for each property. This will mean, for instance, all 3 bed terraced houses in Wallingford will have the same target rent.
Who is affected?
Everyone who rents a home from Soha is affected. Your future rent increases will be worked out in line with the Rent Plan. Some tenants will have target rents that are lower than their current rent. This means your yearly rent increase will be less than inflation +0.5%. Some rents may even go down if inflation is low! Other tenants will have target rents that are higher so their rent will increase by more than inflation +0.5%.
Example
Mr and Mrs Beacham and their family rent a 3 bedroom terraced house in Didcot. They paid £72.73 per week in rent before April 2003 and get 4 rent-free weeks.
If we assume that their target rent was £77.50 per week then their rent had to increase by £4.77 in addition to the basic increase (inflation 0.5%) over the 9 years from 1 April 2003.
So, their rent would increase by:
inflation +0.5% +53p per week
each year until they reach target rent in 2011. They will still get 4 rent-free weeks.
|