Rents, rent differentials and service charges for
private registered providers

1         Introduction

          The regulatory framework for social housing in England covers standards that
          the regulator expects registered providers of social housing to follow. This
          notice is issued in relation to the rent element of the tenancy standard, as
          amended on 13 April 2011 in respect of Affordable Rents.

          The regulator’s requirements for rent include application of a guideline limit
          on rent increases and caps on social rent levels. This notice sets out these
          details for 2012-13 and replaces the note on rents published by the TSA in
          November 2010. It relates to social rents and Affordable Rent although the
          latter is also covered by separate guidelines issued by the HCA.

2         Regulatory Expectations

          The rent element of the tenancy standard requires that private registered
          providers comply with the principles of rent influencing as previously
          published. It is therefore a regulatory requirement that private registered
          providers keep their annual rent changes to no more than the set limit
          specified by the social housing regulator.

          Details of the principles of rent influencing are set out in the Rent Influencing
          Regime – Implementing the Rent Restructuring Framework, details of which,
          along with other supporting details may be found on the TSA website1.
          Target rents, which are part of that regime, should also be changed by the
          guideline limit. The guideline limits for 2012-13 and the previous four years
          are set out in Table A below.

          Rent Influencing Regime – Supplemental Guidance for Implementing the Rent
          Restructuring Framework includes Appendix H to the rent influencing regime
          guidance and sets out details of the rent cap applicable to properties by
          bedroom size. The caps change each year by RPI+1%. The rent cap changes
          for 2012-13, and the previous four years are set out in Table B below.

          Bedroom weights are set out for information in Table C below and rent cap
          levels are in Table D below.

          Private registered providers should endeavour to keep increases in housing
          benefit eligible service charges to no more than the guideline limit of

3   Convergence with target rents

    The rent influencing regime commenced on 1 April 2002 and specified a ten
    year implementation period. The restructuring of rents should therefore have
    been broadly complete by 31 March 2012. This means that rent levels should
    not be in excess of 5% above target rent levels, subject to the maximum rent
    caps. However, where rents are still below 105% of target levels an amount
    up to £2 per week, in addition to the guideline limit, may still be applied until
    the limit is reached.

    Supported housing rents were allowed an additional year to achieve rent
    restructuring and also are permitted a tolerance of 10% over target rent
    levels. The restructuring of rents for this category of properties should
    therefore be broadly complete by 31 March 2013.

4   Affordable Rent

    Homes let on Affordable Rent terms are not subject to the Rent Influencing
    Regime but the maximum annual rent increase is based upon the September
    RPI+0.5%, so the guideline limit for 2012-13 will be 6.1%.

    For further details refer to the 2011-15 Affordable Homes Programme –
    Framework and the terms of individual Affordable Rent contracts with the

5   Continuation of rent influencing regime

    Government has announced that the existing inflation-linked formula for
    annual rent increases in social rented housing will continue to apply
    throughout the 2011-15 Affordable Homes Programme period.

    The regulator has issued a consultation on its regulatory framework in which
    the requirements on rents are set out in a standard within the category of
    economic regulation, and are as directed by Government. The consultation
    does not propose a change to the basis of rent setting policy for social and
    Affordable Rents.

6   Enquiries

    For enquiries about this note, contact the Referrals and Regulatory Enquiries
    Team at:

    Tel: 0845 230 7000
    Email: enquiries@tsa.gsi.gov.uk

    November 2011
Table A - Target rent guideline limits

Year               Guideline      All items RPI         Guideline         Maximum
                       limit          change at      limit for rent      increase to
                                        previous          changes         individual
                                    September                                   rent
1/4/12 to       RPI + 0.5%                +5.6%            +6.1%        +6.1% plus
31/3/13                                                                 £2 per week
1/4/11 to       RPI + 0.5%                +4.6%            +5.1%        +5.1% plus
31/3/12                                                                 £2 per week
1/4/10 to       RPI + 0.5%                 -1.4%           -0.9%         -0.9% plus
31/3/11                                                                 £2 per week
1/4/09 to       RPI + 0.5%                +5.0%            +5.5%        +5.5% plus
31/3/10                                                                 £2 per week
1/4/08 to       RPI + 0.5%                +3.9%            +4.4%        +4.4% plus
31/3/09                                                                 £2 per week

Table B - Rent cap changes

Year             Rent cap change          All items RPI change at     Change in rent
                            limit        the previous September           cap levels
1/4/12 to            RPI + 1.0%                           +5.6%             +6.6%
1/4/11 to            RPI + 1.0%                          +4.6%               +5.6%
1/4/10 to            RPI + 1.0%                           -1.4%              -0.4%
1/4/09 to            RPI + 1.0%                          +5.0%               +6.0%
1/4/08 to            RPI + 1.0%                          +3.9%               +4.9%

Table C - Bedroom weights applicable

 No. bedrooms     Bedroom weights
0                 0.80
1                 0.90
2                 1.00
3                 1.10
4                 1.20
5                 1.30
6 or more         1.40
Table D – Rent cap levels

Bedroom size     Rent Cap in Rent Cap in Rent Cap in Rent Cap in Rent Cap in
                   2012-13     2011-12     2010-11     2009-10     2008-09
Bedsit & one        £127.57     £119.67     £113.32     £113.78     £107.34
Two bedrooms         £135.06    £126.70     £119.98     £120.46     £113.64
Three                £142.57    £133.74     £126.65     £127.16     £119.96
Four bedrooms        £150.07    £140.78     £133.31     £133.85     £126.27
Five bedrooms        £157.57    £147.81     £139.97     £140.53     £132.58
Six or more          £165.07    £154.85     £146.64     £147.23     £138.90
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For the Referrals & Regulatory Enquiries Team, contact us at:
Tel: 0845 230 7000
Fax: 0113 233 7101
Email: enquiries@tsa.gsi.gov.uk


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