Rent Policy

This policy outlines Agamemnon Housing Associations (AHA) approach to setting rents and applies to all our homes. Please note that the setting and monitoring of service charges are not part of this policy.

AHA is required to set rents in accordance with the Regulator of Social Housing’s (RSH) Rent Standard and associated guidance.

AHA will set rents which enable it to meet its regulatory and legislative requirements in relation to the management and maintenance of its existing accommodation which includes provision for long-term and planned reinvestment.

AHA ensures compliance with the RSH Rent Standard and reviews this annually, the outcome is reported to the Board.

The aims of this policy are to ensure that:

• Rents are affordable to all tenants, irrespective of incomes
• Rents are set in compliance with the required outcomes and specific expectations of the RSH’s Rent Standard and legislative requirements
• AHA’s business plan continues to demonstrate the organisation’s viability
• Tenants are clear on the rent review process and how rents are set.

The policy applies to all AHA’s homes.

The Board will consider and approve annual inflation-based variations to rents across AHA homes. The Board delegates authority to the Senior Leadership Team (SLT) to put in place the principles set out in this policy for new and re-let properties.

AHA will notify tenants by post of any change in their rent at least 4 weeks in advance, in accordance with the requirements of their tenancy agreement and provide information about how the rent has been set and is payable.

Most rents will be charged weekly and over a 52-week rent year with some being charged monthly where applicable.

Social Rents

Social Rents is a form of low-cost accommodation where the setting and management of rents is governed by the RSH’s Rent Standard.

Rents for Social Rented tenancies are set using a prescribed standard formula to achieve a base “formula” rent.  The calculation of formula rent is outlined in the Government’s Policy Statement on Rents for Social Housing (Rent Policy Statement).  Further information regarding the calculation of formula rents can be found here https://www.gov.uk/government/publications/direction-on-the-rent-standard-from-1-april-2020/policy-statement-on-rents-for-social-housing

Social Rents must not exceed the rent cap as outlined in the Rent Policy Statement.

Social rents are calculated exclusive of service charges.

Rents for New Accommodation

For properties where a new social rent needs to be set, it is permitted within the government Rent Policy Statement to use the 1999 valuations of similar properties in the same area as a basis for the formula rent calculation.  If no similar properties are identified, AHA will obtain a new valuation in accordance with a method recognised by the Royal Institute of Chartered Surveyors and as required by the Government Rent Policy Statement.

Rents will not be set at a level higher than the calculated formula rent using the method outlined within the Rent Policy Statement.

Rent Increases

Rents will be reviewed on an annual basis and applied to rents charges on the first Friday in May.

Rent increases will be set in accordance with the RSH Rent Standard (at the date of publication this was limited to no more than CPI + 1% in any one year) as modified by any additional Government decision (for 2023/24 the Government capped increases at 7% for social rents).  The consumer prices index (CPI) in the previous September will apply to all rent increases.

The first rent increase a tenant will receive will be in May following the start of their tenancy apart from any tenancies starting in April and allowing for any necessary rent increase notification. Tenants are entitled to one calendar month’s notice of rent changes. Service charges are also on a May-to-April cycle and notice of any changes is given at the same time.

Notice of the increase will be given in accordance with section 13 of the Housing Act.

Under section 13 of the Housing Act 1988, tenants have the right of appeal to a first-tier tribunal (residential property chamber) if they feel the proposed rent for an assured tenancy is too high.

Re-let Rents.

Social rent tenancies will be re-let in accordance with the Rent Standard and Rent Policy Statement. New tenancies will be let at the maximum formula rent, even if the previous rent was under this level.

AHA is committed to applying its equal opportunities policy through its policies in accordance with the Equality Act.

AHA are committed to understanding any potential impacts of our policy on our tenants and stakeholders. AHA will engage with tenants as part of the work carried out by the People and Culture Committee (PAC) to discuss rent adjustments ensuring their views are considered particularly in how the rent adjustments are communicated to all tenants. AHA’s Board will consider feedback gained when making any decisions regarding rent setting. AHA are committed to understanding any potential impacts of our policy on our tenants and stakeholders.

The SLT recommends to the Finance, Risk and Audit Committee (FRAC) the increase (or decrease) to be applied to rents from May.

The FRAC will make recommendations to the Board for approving the rent policy for the coming year.

The FRAC reviews and signs off on the calculation of the May rent increase (or decrease).

The AHA Board approves the annual rent increases (or decreases).

The SLT ensures that the increases are applied correctly and communicated in accordance with legislative guidelines.

AHA recognises the importance of a robust approach to rent setting and the importance the RSH places on rent setting due to its potentially detrimental impact on our business plan and viability, sector reputation and importantly, the financial status of our tenants.

A three lines of defence model is adopted to provide assurance with the FRAC is accountable for the implementation of the policy:

First line

The SLT are responsible for rent setting.  This includes ensuring controls are in place to ensure that rents are set following the Rent Standard and Rent Policy Statement.  The chair of the FRAC will ensure that the team are suitably trained to follow legislative and regulatory requirements.

Second line

The Business Support Manager (BSM) will oversee implementation of the annual rent plan and ensuring its review ahead of implementation.  The BSM will report to CEO monthly in line with the management accounts. Any changes to the original agreed tenancies that result in rent variations will be reported to the FRAC.

Third line

AHA’s internal controls audit programme will, at least every three years, undertake a detailed review of the application of the annual rent review process and review a sample of new rents set since the last review.

Whilst the scope always considers the initial baseline will be correct, AHA will use independent support to provide additional assurance that baseline rents for all its properties have been set correctly.

This policy will be reviewed, following the internal control audit programme, by the FRAC every three years having taken into consideration the PAC’s views, or where there have been changes to regulation or legislation to warrant a further policy review.

• Housing and Regeneration Act 2008
• RSH Rent Standard and associated guidance
• The Government’s Policy Statement on Rents for Social Housing
• Equality Act 2010
• Housing Act legislation
• Landlord and Tenant Act 1985
• Social Housing Rents (Exceptions and Miscellaneous Provisions) Regulations 2016.