Rents setting maintenance overview

Rent setting is conducted using two distinct methodologies: Target Rents and Rent Points. Most commonly, a housing organisation will adopt one method only, although it is recognised that a select few adopt a combination of both.

For the target rent method, increases are set such that the amount paid by tenants converges towards the target value. The amount of rent for a property is calculated using a prescribed formula which is derived from the value of the property (arising from the English House Condition Survey conducted in 1999), the number of bedrooms, average national rents, average property value and average weekly earnings. This means that homes of a similar age, value and type in the same geographical location will ultimately have comparable rents - known as the 'target rent'. Essentially, the target rent for a property is a formula for rent restructuring and is derived from the Government's vision for all social landlords to use the same method for working out rent. All properties should theoretically have been transferred over to their target 'alignment' rent by March 2012, with the focus on developing a fairer system of affordable rents in the social housing sector, where closer links exist between rent and the qualities which tenants value in properties.

More specifically, 70% of the calculated rent value is based on the number of bedrooms in the property, the national average rent and the average weekly wage for the area in relation to average national earnings. The remaining 30% is based on the value of the home in relation to the national average. To prevent any unreasonable increases, a system of rent capping ensures that rent will not increase by more than £2.00 above the Retail Price Index.

An alternative method of rent calculation is using a points scheme, with each property attracting points based on its age, design and amenities. Any comparable attribute of a property can be identified for attracting points merits: type of property (detached, semi-detached, terrace), the number of bedrooms, the size of the rooms and the facilities, such as heating, window construction, etc. are all commonly used. Points can also be deducted if a dwelling lacks certain basic amenities or perhaps has an unusual type of access. The total number of points awarded to each property, based on all these contributory factors, is converted to a rent value using a rent points score multiplication factor.

Civica Cx Housing provides full control over all aspects of rent setting factors to support the specific derivation method.

Separate help articles have been created for each key aspect of rents setting maintenance, including:

• To create a national average target rent
• To create a county average earnings threshold
• To create a target rent bedroom weighting
• To define a bedroom weighted rent cap level
• To define a retail price index target rent level
• To define rent point calculation fields
• To create a rent point element
• To assign conditions to a rent point element
• To apply a multiplication factor to a rent points score