Rent Policy 2025-2028

Rent is the main source of revenue for Wealden District Council’s (WDC) Housing Revenue Account (HRA). It pays for the management, maintenance, and modernisation of our existing housing stock, and is also the primary source of funds for repaying loans granted by Homes England to be used to build or acquire new council properties. 

Purpose of this policy 

The purpose of this Policy is to: 

• Ensure that the Council adheres to current government legislation and regulation when setting and agreeing rents. 
• Provide a clear and consistent framework for setting and reviewing the rents of all properties accounted for in the HRA. 
• Provide as much financial certainty for the HRA as possible. 
• Maximise the income available to maintain our existing housing stock and to construct or acquire new homes. 
• Support the delivery of the HRA Business Plan. 

This Policy explains how the Council will calculate and charge rent for all residential properties within our HRA.  There are separate sections for each property type: 

1. Social rent 
2. Affordable Rent 
3. Temporary Accommodation (HRA owned properties) 
4. Retirement Living Shared Ownership 
5. General Needs Shared Ownership 
6. Garages 
7. Service Charges 

Relevant Legislation, Regulatory Compliance and Related Policies 

• Direction on the Rent Standard  
• Policy Statement on Rents for Social Housing  
• Regulator for Social Housing’s published Rent Standard 
• Welfare Reform and Work Act 2016 (b) 
• Housing Act 1985 Section 24 
• Local Government and Housing Act 1989 
• Social Housing Rents (Exceptions and Miscellaneous Provisions) Regulations 2016 

Social Rent 

Social rents must be set in accordance with the Regulator for Social Housing published Rent Standard Rent Standard – April 2023  

The Rent Standard has two effects on rent setting. Firstly, it sets the maximum rent for new Council tenancies (the ‘formula rent’), and secondly, the maximum increase which can be applied to current tenants’ rent charges. 

From April 2020, the Rent Standard made a 5-year commitment to increase the ‘formula rent’ by the Consumer Price Index (CPI) plus 1% each year for each year.  The Rent Standard also committed to these increases being permitted to rents for existing tenants, although for 2023-24 the rent increases were capped at 7%.  However, new units could still be let at the full formula rent (or with the flexibility of 5% above formula rent for general needs social housing or 10% for supported housing). 

Calculation of social rent 

Under the social rent policy rents will be set based on a formula that considers: 

• The condition and location of a property – reflected in its value 
• Local earnings 
• Property size (specifically, the number of bedrooms in a property). 

The basis for the calculation of formula rents is: 

• 30 percent of a property’s rent should be based on relative property values 
• 70 percent of a property’s rent should be based on relative local earnings 
• A bedroom factor should be applied so that, other things being equal, smaller properties have lower rents. 

Relative property value means an individual property’s value divided by the national (England) average property value, as at January 1999 prices. 

In line with Central Government policy the rents on re-lets can be recalculated at the formula rent level. Furthermore, the policy contains flexibility to set rents at up to 5% above formula rent (10% for supported housing). 

In accordance with the Rent Standard the Council is permitted to increase rent by Consumer Price Index (CPI) plus 1% each year for a period of 5 years from April 2025. 

The Spending Review in June 2025 confirmed that the Government were committed to a 10-year, CPI plus 1% rent settlement, and would consult with the housing sector on rent convergence. 

Properties set at social rent are all properties let that are not charged at Affordable Rent; this is the majority of social housing properties in Wealden.

Affordable Rent 

The government introduced an ‘affordable housing strategy’ in 2011 together with a new regime for funding social housing building.  Most new build or newly purchased social housing since this date is defined as affordable, and the rent charged for these properties can be up to 80% of the private market rent in the local area (including service charges). The market rent refers to the cost of housing for rent in the private sector. 

Prior to 2011, all Wealden District Council’s social housing stock were charged a social rent.  A social rent is calculated in a formula set in legislation, with targets set annually for increases.  There are separate service charges for most properties charged a social rent.

Which Properties have Affordable Rent? 

Any property that has received any amount of Government Funding and/or has been built or purchased since 2011 will normally be let at an Affordable Rent. This is because we need to pay for the “loan” taken out to purchase or build the property and this is only viable at this higher rent level.  This includes properties purchased through the Local Authority Housing Fund . 

Affordable Rent Level

Affordable rent is higher than social rents so to minimise the impact on our residents, we set our affordable rent levels at the lowest of the following values: 

1. 80% of market rent in the area 
2. The Local Housing Allowance (LHA), which defines housing benefit limits for people who rent a home from a private landlord 

When and how are applicable properties valued? 

Properties are valued at the point of purchase or once they are built and ready to be let. This is done to work out the rent level.  When a property next becomes empty, a new rent valuation is required unless the property has been valued within the previous 12 months.  This is done before the property is let. 

Valuations are carried out by a qualified independent surveyor using the RICS red book recommendations. 

Rents are charged on a weekly basis. The average weekly rent is calculated on WDC’s annual rent cycle of 52 weeks in a financial year (or 53 weeks in some financial years) and provides for 4 rent free weeks during the year.  This means the rent is collected over 48 or 49 weeks depending on the number of Mondays during the financial year.  While rent should be paid weekly in advance, agreements are often made to pay monthly. 

Rents and service charges are set annually and in accordance with the Social Housing Regulator’s Rent Standard.  There is a limit to how much rents can increase by; for instance, the maximum increase for 2025-26 was Consumer Price Index (CPI) plus 1%. 

For Affordable Rents, the rent is a gross rent (rent and service charges) meaning that if service charges increase by more than CPI plus 1%, the rental element cannot increase by the full amount. 

The rent for these properties is set according to the lease individual lease for each development. 

While there may be differences between sites and leases, generally the rent charged is the net rent, defined as; 

“the Net Rent shall mean at any relevant time the Gross Rent at that time less a sum in respect of the maintenance and repairing responsibilities undertaken by the Lessee hereunder which shall be calculated by the Council from time to time and notified in writing to the Lessee. 

The Gross Rent shall mean at any relevant time a yearly rent which is equal to that in respect of a dwelling  

1. which is in the opinion of the Council similar in size and type to the Property  
2. which is let by the Council in accordance with its management powers under Section 111 of the Housing Act 1957” 

Rent is charged according to the amount of equity held by the shared owner; for instance, if the shared owner owns 50% of the equity, the rent charged is 50% of the net rent. 

The stock of these properties, while still relatively small, has grown rapidly in recent years. There are two shared ownership properties with rent set at social rent and have been so since the early 1990s when all rents were set at social rent. Newer properties fall under the new, affordable rent regime, dependent on specific terms of the lease. Rent charged varies in proportion to the equity held by the shared owner. 

There is a flat rate charge for garages.  Rent usually increases annually with inflation, although the Council reserves the right to vary this amount.  Council tenants are not charged VAT. 

While it has not been the practice of the Council to let hard-standings for over 20 years, historically there were a number of licences issued for a nominal fee.  Fifteen remain and the number will reduce as licences are terminated.  These charges are not subject to an annual increase. 

The Council owns a number of properties that are used for temporary accommodation. For properties owned within the HRA, rents are set at the social rent level and a service charge is also applied to recover additional costs which are not included in the rent 

Barford Court, Quail Court and Watermill Place are charged at social rent. For Barford and Quail Courts, service charge will include: 

• Management Charge 
• Communal Electricity  
• Communal Cleaning 
• Grounds Maintenance, and additional grounds maintenance 
• CCTV servicing 

For Watermill Place, the service charge incudes 

• Management Charge 
• Grounds Maintenance 

For other temporary accommodation charged at affordable rent, all service charges are included within the global rent figure and include the management charge and other communal charges. 

As mentioned above, a separate Service Charge Policy already exists.  When these policies are reviewed, the Service Charge Policy will be combined with this policy. 

Rent increases are approved annually at Full Council.  This must provide sufficient time to allow the annual rent and service charge notifications to be sent during the first week in March to allow 28 days’ clear notice, ending on a Monday, for the new rent year that starts the first week in April. 

This policy will be reviewed April 2028 to coincide with the review of the current Service Charge Policy.