Rent levels in private registered providers of social housing
Private registered providers of social housing (PRPSHs) charge rents in accordance with the Rent Standard to ensure similar rents for similar properties.
Setting rents – the Rent Standard
Private registered providers of social housing (PRPSHs) must charge rents in accordance with the Rent Standard, as set by the regulator of social housing.[1]
Social rent levels are set by a reference to a formula.[2] The aim of the formula-based approach is to ensure that similar rents are paid for similar properties. The current formula is devised on the basis that social rents take account of:
the condition and location of a property
local earnings
number of bedrooms in a property
Each year the Government and the Regulator of Social Housing publish guidance on how to adjust the formula to the new annual Consumer Price Index and calculate rent increases using the correct annual percentage to inflate their rent:
limit on annual rent increases for 2023-2024 (from April 2023)
limit on annual rent increases for 2024-2025 (from April 2024)
Exclusions
The Rent Standard does not apply to some social housing tenancies, including properties let on affordable rents and let to high income tenants.
Affordable rents
Affordable rents can be set at up to 80 per cent of the market rent. Find out more about affordable rents on Shelter Legal.
High income tenants
A PRPSH can charge a market rent to tenants with an annual household income of £60,000 or more.
In calculating household income, only the income of the tenant or joint tenants, and their spouse, civil partner or cohabitee are to be taken into account. If more than two of these members of the household have an income, only the two highest incomes are to be taken into account.[3]
Applications to disapply Rent Standard
A local authority can apply to the government for agreement that it would be inappropriate for the Rent Standard to apply to accommodation it lets, if this would cause the local authority unavoidable and serious financial difficulty.[4]
Rent increases and variations
Rents for tenants of PRPSHs are usually increased annually.
Social rent reduction
From 1 April 2016, PRPSHs were required to reduce rents by 1 per cent per annum in each of the following four years.[5] The government published guidance about social rent reduction.
For social rents the reduction applied to the rent element and not to service charges, for (most) affordable rent properties, the reduction applied to the total rent, inclusive of service charges.[6]
Exceptions to and exemptions from the requirement to reduce the rent were set out in regulations, and included:[7]
temporary social housing and short-life leasing schemes for the homeless
residential care homes or nursing homes
certain specialised supported housing developed in partnership with councils, local health or social services offering a high level of support for clients, for whom the only alternative options are care homes
From 1 April 2017, the following were also exempt:[8]
shared ownership
domestic violence refuge accommodation
almshouse accommodation
accommodation provided by a co-operative or fully mutual housing association
accommodation provided by a community land trust
Rents by security of tenure
The protection that PRPSH tenants have regarding rent levels and rent increases primarily comes from the Rent Standard.
However, the framework providing for increases to rents of assured and assured shorthold tenants of private landlords, and the mechanism for challenging rent increases, applies equally to assured and assured shorthold tenants of PRPSHs.
A secure tenant of a PRPSH is subject to the fair rent regime under the Rent Act 1977.
Last updated: 8 April 2024