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England

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.

This content applies to England

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:

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

Footnotes

  • [1]

    s.193 Housing and Regeneration Act 2008.

  • [2]

    Ch.2 Guidance on Rents for Social Housing, DCLG, May 2014.

  • [3]

    Direction on the Rent Standard 2014, DCLG, May 2014; para 2.5 Rent Standard 2015, HCA.

  • [4]

    Local authority guidance for formal applications to disapply government rent policy, DLUHC, March 2024.

  • [5]

    s.23 Welfare Reform and Work Act 2016; Welfare Reform and Work Act 2016 (Commencement No.1) Regulations 2016 SI 2016/394.

  • [6]

    reg 16 Social Housing Rents (Exceptions and Miscellaneous Provisions) Regulations 2016 SI 2016/390.

  • [7]

    Social Housing Rents (Exceptions and Miscellaneous Provisions) Regulations 2016 SI 2016/390.

  • [8]

    reg 3 Social Housing Rents (Exceptions and Miscellaneous Provisions) Regulations 2016 SI 2016/390, as amended by Social Housing (Exceptions and Miscellaneous Provisions) (Amendment) Regulations 2017 SI 2017/91.