Your New Rent and Service Charges Explained
We usually send out our ‘rent and service charge’ booklets in February. We have over 20,000 to send out, so we send them in batches which gives us the time to respond to any queries. The booklet explains what the new charges for your home and the services you receive from us will be and how we calculate them.
We rely on the postal system so not everyone’s booklet will arrive at the same time, but they should all be delivered by the end of February.
When do Changes Start From?
- For monthly rent and service charges, changes apply from 1 April 2021.
- For weekly rent and service charges, changes apply from 5 April 2021.
- For fortnightly rent and service charge, changes apply from 5 April 2021.
How are rents calculated?
The way we calculate your rent is set and regulated each year by the government. The government allows local councils and housing associations to increase their rent each year up to the value of the Consumer Price Index (CPI) plus another 1%. In September 2020, the CPI figure was 0.5%. This means that the rent most residents will pay will increase by 1.5%.
If your rent is currently £90 per week, and it goes up by allowed 1.5%, your new rent will be £91.35 per week.
If you pay a service or amenity charge, it will also change in line with our costs for providing these services. Service charges cover the costs of things such as cleaning, gardening or other estate services.
We estimate the cost of providing services and add the charge to your rent each year. These charges are fixed which means we do not compare them with what we have actually spent.
Although this means we do not refund anyone if the cost is less than we estimated, it also means we do not charge you any extra if it is more.
We will always let you know what the charges are before you start to pay them, and we always try to set them as correct as possible so you can budget and plan ahead for the cost. We would never knowingly set them too high or too low.
This is just an average calculation. Your actual rent will depend on the type of home you live in and where you live. If you live in an independent living scheme or care home, your rent will be higher because you will receive many more services.
Offer income team help if anyone is worried about being able to pay their rent.
If you claim Housing Benefit or Universal Credit, you must let the agency where your payment comes from (your local council for instance), know when the amount changes and how often you pay, (for example, whether weekly, fortnightly or monthly).
If you pay by direct debit we will automatically update the payment amount. Many residents find Direct Debit is the easiest and most convenient way to pay. If you would like to set up a Direct Debit, please contact us.
How are service charges calculated for Leaseholders?
Service charges for our leaseholders and freeholders vary, depending on the services they receive. We calculate these charges by estimating the cost of providing the services over the next financial year and apply the charge from the start of the year. The estimates are based on known costs (such as contractual costs), and historical costs (such as repairs and maintenance in communal areas). Depending on the individual lease, these may be applied on 1 April or 1 January. At the end of the financial year, we compare the actual cost of delivering services with our estimate. If the actual cost is higher, we will charge the difference. If it is lower, we will offer a refund or add a credit to your account. We always let you know what the charges are before you start to pay them, and we try to estimate them as accurately as possible so you can budget and plan ahead for the cost.
What Happens if I didn’t get some of my services because of the Coronavirus?
We have been asked a few times why we cannot refund service charges when some services couldn’t be provided because of the lockdown.
Generally, it is because we still had to pay for the service under the terms of our contracts.
Even though we did stop some services (estate services, non-urgent repairs, planned maintenance for example), in the government’s first lockdown, we re-started them quite quickly, as soon as it was safe to do so. We are still providing a full service at present.
For the time being, the lounges in our independent living schemes must stay closed to follow the government guidelines for social distancing. The service charge for a communal lounge is very small, and it is charged with other services we have continued to provide throughout the pandemic, so it is not possible for us to offer refunds. Once we are allowed to open our lounges again, we will look at what we can do to make allowance for the small charge paid.
Also in our independent living schemes, we have been providing extra cleaning services to help keep residents safe without any extra charges.
We are still getting through the backlog of non-emergency repairs that built up, but we are working with our contractors closely to clear them as quickly as possible. Our contractors are also affected by the coronavirus and have a responsibility of safety for their staff, just as we do for ours and our residents.
We will always follow government guidelines and never compromise the safety of residents or staff.
Where we are still having to change services in areas where the infection rates are very high we will talk to these residents directly about their service charges when things start to return to normal.
Rent terms explained:
- Affordable Rent: Based on market review. Tenancies created following the Welfare Reform Act where rents are set at up to 80% of the Market value.Increase is based on the market rent.
- Intermediate Market Rent: Based on market review. Tenancies where rent is charged at 80% of market value. Increase is based on the market rent.
- Intermediate Rent: Based on market review. Tenancies where rent is charged at 80% of market value. Increase is based on the market rent.
- Market Rent: Based on market review. Tenancies where rent is charged at market value (100% of market rent). Increase is based on the market rent.
- Home Ownership (Shared Ownership or Leasehold): Dependent on lease. Tenancies where the customer owns a % of their home and pays rent on the remainder owned by us.
- Garage Rent: Increase up to 1.5% (CPI+1%).