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Castle Vale Community Housing Social Rented Properties & Rent to Buy Homes

There are two different rent types for our social-rented homes. These are called formula rents and affordable rents. Formula rents are sometimes referred to as ‘social rents’.

It depends on how your homes purchase/build costs were funded as to which rent is used. We do this in agreement with Homes England (the government department that funds homes) if the purchase/build is funded with social housing grant.

Formula rents

As the name suggests, we use a government formula to set these rents. This is a complex calculation and takes into account the following:

– How much the home would have been worth in 1999 (even if it wasn’t built then)
– The average earnings in the county or local government area
– The number of bedrooms the property has
– A percentage increase/decrease for every year since 1999 as set by the government
– The amount plus 5% for general homes and 10% for sheltered or housing designated for older persons

If you’d like to see the exact calculation, it is available on the government website in the ‘Rent Standard’ – you can find it here

There might be an additional service charge, separate from your rent which funds services like repairs in communal areas in flats, communal heating and lighting, grounds maintenance and cleaning.

Affordable Rents

Affordable rents are set at a percentage of the market rent (what the average price of homes in the area is on the open market). This is often 80% of the market rent – so if the average three bedroom property in your area was rented for £1000, the affordable rent would be £800.

In affordable rents, the cost of any additional services is included, you don’t pay a service charge in addition to this.

Once the rent is set, it can only be reviewed using strict rules. This means that even if the market rents change dramatically, we can’t change the rent to match the new market rents.

Rent to Buy Homes

Rent is set the same way as affordable rents – a percentage of the market rate – usually 80%.

 

How is my rent reviewed?

Social tenancies and rent to buy homes

The Government set how rents are reviewed. This can change from time to time, but the method of calculation is set out in the Rent Standard.

The current agreement is that rents are reviewed based on the inflation rate for the previous September plus 1%. If September’s inflation rate was 5%, then rent would increase by 6% (5% + 1%).

We use the consumer prices index (CPI) inflation measure for this. This is the maximum amount that rents can increase by.

The Office of National Statistics published the CPI level each month.

Our Board carefully consider our rent levels and whether to charge the maximum amount each year. They take into account affordability (and look at a range of impacts on separate types of households) and balance this with the cost of running our services. If inflation is high, our costs normally increase too meaning it costs more to provide our services. As well as the services you can see, there are also lots of other costs you might not think about – like the cost of insuring your home (buildings insurance). We have a 30-year financial plan which considers the cost to maintain, repair and renew elements on our homes like windows, doors, kitchens and bathrooms.