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THREE-YEAR HEALTH CHECK OF RENT RESTRUCTURING UNDERWAY

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The first three-year review of progress of the ten-year social rent ...
The first three-year review of progress of the ten-year social rent

restructuring programme in England was launched today.

The review will gather evidence about the effects of rent

restructuring and examine whether modifications to the approach are

justified.

Housing minister Jeff Rooker said the policy of rent restructuring

was delivering a fairer and more coherent system of social rents.

These remained well below what the private sector would charge for

similar properties.

'The government is committed to ensuring social housing remains

affordable for people on low incomes. Tenants will be protected from

large or sudden rent increases.

'To ensure our policy is on track we are using the three-year review

to gather evidence, data and intelligence on the effects of the

policy. We will examine specific issues where fine-tuning adjustments

to our approach would make sense for tenants and landlords.'

The review is led by a steering group comprising the ODPM, Housing

Corporation, Local Government Association, Association of London

Government, National Housing Federation and a tenant representative.

The aim is to complete the review by April 2004 and, following

consultation, to implement any changes justified by the evidence from

April 2005.

Notes

1. Over a ten-year period from April 2002, councils and housing

associations are being encouraged to set their rents within +/- 5 per

cent of the levels given by a national formula that reflects a

property size, location and condition.

2. This will cause similar social tenants renting similar homes in

the same area to have very similar rents regardless of their

landlord. It will put at end to the current situation in which the

rents charged by neighbouring councils for similar properties can

vary by a third or more, and housing associations can charge over

half as much again as councils for similar properties in the same

area.

3. With the reforms, social rents will generally be higher on larger

properties in areas of high house prices and earnings - such as

London and the South East - and lower on smaller properties in areas

of low house prices and earnings such as Northern conurbations.

4. Social rents will remain affordable - at well below private sector

levels in most areas. Council rents will, on average, increase at

only half the rate at which they went up over the last ten years.

Housing association rents will also, on average, increase much more

slowly than over the last ten years.

5. A cap has been set on the weekly rent any social tenant will pay

as a result of the reforms, for example £102.70 for a 4-bedroom home

in 2003/04. Lower figures will apply for smaller properties. Where

rents are already higher than this, they should be gradually reduced

in real terms. For the small number of properties affected by the

safeguard, the maximum increase in future years will be RPI plus 1

per cent a year.

6. Social landlords are also expected to ensure no tenant faces a

rent increase of more than RPI + 1/2 per cent plus £2 a week a year.

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