Government guidance since 2011 has been that some housing association homes should be let at higher rents (up to 80% of private market rents) and these will usually have a fixed-term tenancy (for example, five years). This will be made clear on homes being advertised.
The higher rent that will be charged for some homes is called 'affordable rent' by the government. Here is some more information on affordable rent.
Why is it being called ‘affordable rent' when it will actually be higher?
Affordable rent is the government's term that is being used nationally. We are using the same term to avoid any confusion.
Why is the rent charged on some homes going to be the new, higher affordable rent?
The government wants housing associations to build extra homes. The extra money raised by charging the higher 'affordable rent' on some existing homes will be invested into building new homes.
There is a real shortage of council and housing-association homes. There are far more people seeking a council or housing-association home in the locality than there are homes available. In order to try and meet this need, and develop new homes, we must introduce affordable rent in line with the government regulations.
Which homes will be charged the higher rate? How will I know if it affects me?
The higher rent will be charged for newly-built homes and some existing homes that are being re-let. The rent level for all homes advertised through the choice-based lettings scheme will continue to be clearly set out in the adverts. Please check the rent being charged and that you can afford it before bidding for any home.
If you are an existing tenant you will not be affected, unless you choose to move to another home which is subject to the affordable rent. Your rent will continue to be charged in the normal way, with annual increases applied in the normal way. If you choose to move to another home, particularly a newly built home, you may be affected. If this happens we will talk to you about how you could be affected before you move.
How much higher will affordable rent be?
There is no fixed amount for affordable rent. Affordable rents are based on the rent charged for private-rented homes. Under current rules the new affordable rent rate will always be less than the market rental value of the same property. It will be no more than 80% of the market value.
So, like current social rent, an affordable rent will still be cheaper than renting privately.