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Rents for April 2010
By now all residents will have received their rent letters confirming what rents will be from April 2010.
The rent increase from April is based on a formula set by the government. The formula is:
Retail Price Index (RPI)* as at Sept 2009 which was minus 1.4%
plus 0.5%
plus up to a maximum of £2 per week
Depending on where you are on moving towards target rents, you may see your rent reduced by 0.9% in April (RPI of minus 1.4%, plus 0.5%) or increased to move you towards target rents (initially reduced by 0.9% but then increased by up to £2 per week). The overall aim is to have all residents on target rents eventually.
Last year, rents increased in line with the above formula and because the RPI was a high figure, residents had quite a significant increase in their rent. Because the RPI is a minus figure this year, some rents have gone down and those that have increased have gone up by a lesser amount.
Howard Cottage is committed to applying the government formula as fairly as possible.
· We are committed to using the formula set by the government at all times because we think this is a clear and fair way to increase rents. We will not ask the government for permission to adjust the formula if we don’t like the figures it gives us. Last year the RPI was high which meant there were large rent increases. This year the RPI is a minus figure so there are much lower increases, and some rents are going down.
· Part of the government rent formula is the value of the property in 1999. This figure stays the same in the formula every year. It is permissable for Housing Associations to revisit this value which can in turn lead to rent increases. Howard Cottage has not adjusted the original value and so our residents have not lost out.
· There is an option in the government formula to increase rents towards a figure that is 5% higher than the target rent. Howard Cottage has not used this extra 5% to increase rents.
*The Retail Price Index is the index that measures inflation.
If you have any questions regarding your rent letter please contact your Housing Officer on 01462 683307.
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