Date approved: November 2021
Review date: November 2022
Please be aware that this full policy may include acronyms or technical jargon used internally within Raven. If you have any questions, please contact us.
1 PURPOSE/POLICY AIMS
1.1 As a Registered Provider, Raven aims to:
- charge rents in accordance with regulatory guidance for the appropriate property, tenure and rent regime;
- charge rents for Commercial properties at rents determined by the Leadership Team, after taking the appropriate advice;
- ensure service charges are charged using the correct framework, aiming to meet the cost of providing services 1.1 Raven is committed to playing our part
2. SCOPE & POLICY STATEMENT
2.1 This policy is based on the following principles:
- easily understood by tenants
- fair and equitable
- state accountabilities
- efficient and effective
- balance income needs and customer affordability
2.2 Raven will provide a quality housing service reflecting the needs and demands of its customers. As Raven is a “not for profit” organisation, it needs to generate sufficient rental
and service charge income to deliver this service.
2.3 Raven will regularly monitor and review this policy on Rents and Service Charges and ensure that it continues to meet Raven’s strategic objectives and is operated in
accordance with regulation and legislation, including the Equality Act 2010.
2.4 Raven will comply with the ‘Rent Standard’ as set by The Regulator of Social Housing
2.5 Charges payable by tenants
The total charge (gross rent) payable by a tenant may include the following items if applicable to the tenancy, lease or individual:
- Rent – comprising net rent and, if applicable, fixed service charge
- Variable service charge – for example, charge for heating provided to an individual unit of accommodation
- Water charge – charge for water supply and sewerage, collected by Raven on behalf of a water supply company
- Council tax – council tax in respect of an individual unit of accommodation, but only where charged to Raven by a local authority
- Garage charge – charge for use of a garage
3. TENANCIES AND RENT
3.1 Tenancies will be let in accordance with regulatory guidance and will reflect the differences between New Tenancies and Transferring Tenancies as appropriate.
3.2 Tenants will pay Council Tax directly to local authorities. In non-self-contained accommodation, if the local authority charges Council Tax to Raven, the amount charged will be apportioned among the tenants. The facility to pay water charges to Raven will continue, subject to agreement with the water company. Heating and other charges (where applicable) will be collected by Raven and will reflect Raven’s overall costs.
3.3 The facility to pay water charges to Raven has ceased for most individual dwellings. Subject to agreement with water companies, some charges will continue to be collected by Raven, predominantly for shared water systems. Heating and other charges where applicable) will be collected by Raven and will reflect our overall costs.
3.4 Social Rents
3.4.1 The Board will decide rent levels, which will be based on the principles set out in this Policy and will comply with the Rent Standard and the Regulator’s expectations.
3.5 Affordable Rents
3.5.1 Where Raven lets affordable rented properties built as part of Homes England’s affordable rent programme, rents will be set at no more than 80% of the market rent.
3.5.2 Between 2013 and 2015, Raven converted some existing homes to 65% affordable rents to support the development programme. On relet, these homes will be let at no more than 65% of the market rent.
3.5.3 When setting and re-setting affordable rents, the rent level should have reference to not only the local private rent but also the Local Housing Allowance (LHA) to ensure that, where possible, it does not exceed it.
3.5.4 Affordable rents will not be used for any properties where affordable rents are prohibited through covenants, the terms of a section 106 agreement or a policy approved by the Board.
3.5.5 Valuations for initial rent setting will be made in accordance with a method recognised by the Royal Institution of Chartered Surveyors.
3.5.6 Where affordable rent homes are relet, one of two rent setting methods will be used. In most cases, Raven will undertake a new valuation to set the rent. In areas where affordable rent is widely used, and there are regular relets or tenancies re-issued, and we have adequate comparable rents for similar properties available, rents may be reset using a desktop review of recent transactions.
3.6 Registered rents
3.6.1 Some tenants with a tenancy that started before 15 January 1989 are likely to have a regulated secure tenancy.
3.6.2 This does not apply to tenants who transferred from local authorities as part of a large scale voluntary transfer. In these circumstances, tenants have Assured Tenancies with some protected rights.
3.6.3 Tenants with secure tenancies are entitled to make an application to have a fair rent registered. Fair rents may be at or lower than market rents. As a registered provider, Raven will cap fair rents, as with social rents.
3.6.4 Fair rents are registered by Valuation Office Agency Rent Officers. Tenants can apply for rent registrations every two years, or sooner if there are major changes to the property, such as major repairs or improvements. Landlords may apply for rent registrations after 21 months.
3.6.5 Fair rents will be re-registered following a new valuation as and when that falls due. Where fair rents for social housing properties are valued above the social rent cap, they will be capped at that level. Fair rents will be increased by CPI + 1% each April in line with other social rents where the increase is lower than the last registered rent and will not take the rent over the cap.
3.7 Application of Rent Policies
3.7.1 Rent increases/decreases will be set on an annual basis and will usually take effect from the first Monday in April each year.
3.7.2 For Assured tenants, the rent may be varied by giving at least one calendar month’s written notice of the variation for monthly tenancies and four weeks for weekly tenancies; as required by Sections 13 and 14 of the Housing Act 1988 or as stated in the Tenancy Agreement.
3.7.3 The notice of variation will inform tenants of the revised rent. An individual rent will not be increased more than once in a year unless the tenant and Raven agree otherwise or there is an increase due to improvements, or a change in services, as defined in the Tenancy Agreement.
3.8 Exceptions to the normal rental assessment scheme
3.8.1 Most properties let by Raven will be assessed according to the schemes set out above. The exceptions are:
- ground rent on leasehold properties
- Intermediate rent accommodation
- licences for garages
- key worker accommodation
- temporary social housing
- market rents
- some properties managed for other landlords
- some properties in schemes leased from other landlords
3.8.2 For Shared Ownership properties and properties where customers have exercised the Right to shared ownership:
- Under the Homes England Capital Funding Guide, Raven can set rents at up to 3% of the value of the unsold equity. Raven will set shared ownership rents at 2.75% of the unsold equity.
- Rent is calculated in line with the terms of the lease and is based on a formula calculated according to the percentage of equity owned by Raven.
3.8.3 For leasehold properties:
- Provision for periodic ground rent is in accordance with the lease. Ground rents will be fixed at £200 for a 1-bed, £250 for 2-beds and £300 for 3 beds for 25 years. These will be doubled on the 25th anniversary of the date of commencement of the lease and each successive 25th anniversary from that date.
- Leaseholders’ service charges will be calculated in accordance with the Leasehold Management Policy
- Where the lease allows, an uplift will be applied
3.8.4 Shop rents are set on initial let based on appropriate professional advice and are revised in accordance with the lease
3.8.5 Intermediate rents will usually be set between 70% and 80% of Market rents. Increases may be applied based on valuations, or Raven may choose to increase rents at the same rate as social rents by applying the CPI + 1% formula to existing rents.
3.8.5 Garage rents will be set and revised annually by the Leadership Team, considering market conditions.
3.8.6 Key worker accommodation will be let at 80% of market rent (as determined by appropriate professional advice) and reviewed annually.
3.8.7 Temporary social housing rents will be set based on any specific requirements for individual schemes and the cost of support provision. At it’s discretion, Raven may choose to increase rents using the CPI + 1% formula applied to social rents.
3.8.8 Market rents will be established by Leadership Team according to market conditions and appropriate professional advice at the time and will be reviewed annually.
3.9 Service charges
3.9.1 All tenants who are entitled to receive services associated with occupation of accommodation, for example grounds maintenance and cleaning and lighting of communal areas, are charged a fixed service charge as part of the rent. Raven will seek to ensure that the service charge is broadly in line with the costs (note, as Raven does not operate a variable service charge, the cost incurred will not marry exactly with the amount charged to residents). To reflect best practice and Government policy for social landlords, Raven will show fixed service charge elements of the rent alongside the net rent so that tenants can see clearly how much of their rent goes towards services.
3.9.2 Raven will apply the definition of Service Charges set out in Welfare Reform and Work Act 2016, which states; ‘“service charge” means an amount payable by the tenant of particular
accommodation as part of, or in addition to, the rent, and which is payable, directly or indirectly, for services, repairs, maintenance, improvements or insurance or the landlord’s
costs of management;
3.9.3 The fixed service charge (if it applies) may be increased at any time if Raven gives at least one month’s notice in writing, but not more than once a year unless there is a change in
the services provided. Ordinarily, the fixed service charge will change on the same day as the net rent.
3.9.4 Service charges for services provided directly by Raven for tenants will be fixed. Certificates showing the actual costs of providing the services will not be issued.
3.9.5 Raven will charge reasonable fixed service charges. Services will be delivered to published standards set out in the customer charter.
3.9.6 Raven’s intention in setting fixed service charges is to take into account:
- the estimated cost of providing the services, including management and
- value for money;
- provision for the maintenance and replacement of equipment used in the supply of services; and
- a reasonable apportionment among households entitled to receive the services.
3.9.7 Tenants may also have to pay variable service charges, e.g. water charges, charges for heating, electricity or gas to individual properties, or anything tenants normally have to pay to the local council such as Council Tax.
4 SUPPORT FOR CUSTOMERS
4.1 Raven will provide support and information in situations where customers may have difficulty meeting rent or service charge commitments. We will take a proactive
approach, seeking to avoid customers falling into arrears as well as working with them to repay debt when they do.
4.2 We will make referrals to other specialist services where customers have serious and multiple debts. Assistance may be provided with benefits, grant, or discretionary housing
payment applications to assist customers to reduce debts. Where possible, Raven may also refer to other sources of help with benefits or grants.
4.3 Customers who are identified as needing more support may also be referred to specialist agencies or statutory services. Where appropriate, those agencies may be invited to
participate in making financial arrangements.
5.1 The Director of Finance and Governance and Director of Customers and Partners are responsible for implementation of this Policy.
6.1 Raven will regularly seek tenants’ and tenants’ representatives’ views about how they view their rents in terms of VFM.
7.1 This policy will generally be reviewed annually by the Board, and may be reviewed at other times. The views of tenants and tenants’ representatives will be incorporated into this review process. The review will also involve comparing our rents against other social landlords, our compliance with government policy at the time, anticipated change, and the requirements of Raven’s business plan.
8. PUBLICISING THE POLICY
- A copy of this policy will be available on Raven’s website.
- This policy will also be available on the nest (intranet).
- Training will be provided for core staff who will apply this policy.
9. MONITORING & COMPLIANCE
This policy will generally be reviewed annually by the Board but may be reviewed at other times. The views of tenants and tenants’ representatives will be incorporated into this
review process. The review will also involve comparing our rents against other social landlords, our compliance with government policy at the time, anticipated change, and the requirements of Raven’s business plan.
10. EQUALITY & DIVERSITY
Raven will ensure our policy on setting and increasing rents considers the potential impact on different customer groups, in particular ensuring customers with additional needs are supported to access benefits and advice to enable them to be able to pay rent.
We will ensure we offer a wide variety of rent payment options to suit customers with different needs and abilities, offering flexibility and 24/7 payment options.
All Board members, staff and involved residents should promote the association’s policy on equality and diversity and avoid discriminatory action or expression.