So how do we calculate your rent?
3/2/2010
With negative inflation in recent months you may well wonder why some rents will be increasing from April 2010
With negative inflation in recent months you may well wonder why some rents will be increasing from April 2010?
The rent we charge you covers the use and occupation of your home. All the rents we collect are used to cover the cost of managing and repairing your home, including provision for major repairs or improvements in the future, loss of income on empty properties, rent arrears and a contribution towards the cost of the new homes we build.
In April 2002 the government brought in a new way of working out rents for all housing association homes and councils. This formula aims to make rents fairer, reflecting more closely the size, condition and location of a property and local earnings, regardless of who the landlord is. This is called your ‘target’ rent level. 30% of the rent is based on relative property values and 70% of the rent is based on relative local earnings plus the average council and, or housing association mean rent level in the area.
The actual rent that you’re currently paying is likely to be different from the ‘target rent’ for your home. For this reason, we have been given until 2012 to make the changes to your rent. The aim is that by 2012 all tenants will be paying the ‘target rent’ for their home. Until then we can make controlled increases or decreases to your rent each year.
‘Target rents’ alter every financial year depending on the Retail Price Index (RPI) figure for the previous September, plus 0.5%. Until 2012 we are allowed to add or take away £2.00 per week from this calculation to help all MWS tenants reach their ‘target rent’ by 2012. The September 2009 RPI figure was minus 1.4%. Adding 0.5% to this figure, makes the guidance for rent decreases for tenants in 2010/11, minus 0.9.
So although a 2010/11 rent decrease for all MWS tenants has been agreed, not all tenants will get a rent reduction from April 2010. In fact, 756 tenants’ rents will increase. Generally by no more than £2.00 per week.
Put simply
If you’ve reached ‘target’ rent level… your target rent level and the rent you pay will decrease by 0.9%.
If your rent is higher than ‘target’ rent level… the target rent level for the property will decrease by 0.9%. The rent you currently pay will also decrease by 0.9% and also by an amount of up to £2.00 per week to move as close to the target rent level as possible.
If your rent is lower than ‘target’ rent level… the target rent level for the property will still decrease by 0.9%. The rent you currently pay will also decrease by 0.9% but in addition to this your rent will go up by up to £2.00 per week to bring the amount you pay as close to the target rent level as possible.
and what about service charges?
Many of our general needs tenants and all of our sheltered & supported tenants pay service charges for services they receive which are not covered by rent e.g. grounds maintenance, communal electricity etc. Service charges are also adjusted at this time of year and tenants will receive notification of service charges adjustments in their rent increase/decrease letters and notices.
A service charge increase or decrease will also have an impact on the total weekly charge a tenant has to pay from April 2010, so that even if a tenants’ rent goes down their overall weekly charge could still increase if the amount of the service charge increase is more than the rent decrease. The reverse is also true.
Other charges?
A 2010/11 increase for garage charges of 1%, based on a comparison of our charges with local companies
A 2010/11 rent decrease for shared ownership properties of 1.4% (September 2009 published figure), effective from 5th April 2010.
A 2010/11 increase in charges for the Bronze Piper Lifeline Service from £3.43 to £3.50, (an increase of 2%). A Piper Lifeline Silver Service charge increase to £4.80, (an increase of 3.2%)
Lunches served at Ingrams and Silvermead to be increased to £5.55 for all meals
As a Tenant or Leaseholder of MWS you will receive a letter this week detailing this information. Customers with queries can contact Sheila Bryant, MWS Income Management Officer.