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NEWS STORY: APRIL 2008

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Rent rise explained

picture of a £1 coin

The transfer proposal that tenants voted for to launch Southway described how we would follow government rules for raising rent. This means your rent would go up by the same amount whether the transfer went ahead or homes stayed with the council.

Our first annual rent increase kicked in for most tenants on Monday 14 April. (It officially changed on 7 April, but that's a rent-free week).

It's made up of two parts.

1. An increase for inflation
The rent goes up by inflation, plus half a percent - that's 4.4% this year.

Then . . .

2. An increase to meet each property's 'Target Rent'
To be fair to all tenants, the government wants every rented home in an area to reflect the property's value and the average income of people living in that area - so tenants pay broadly the same for the same sort of homes. It’s called 'Target Rent'.

The rent for each home has to meet this target by 2012. Most Southway homes are currently a bit below their targets so we'll need to slightly increase the rents - spread gradually over the next few years.

Remember, this would have happened in exactly the same way if your home was still owned by the council.

Example

Here’s an example of how these two factors would raise the rent for an average Southway home.

Weekly rent in 2007 £50.00
Add 4.4% inflation £2.20
Rent after inflation £52.20

Now let's say the 'target rent' for this property is £54.00. The new rent is still £1.80 short of this target. To spread the target rent increase we add a quarter of the difference, 45 pence, every year for four years.

So the new weekly rent for this year is: £52.65

Still confused?

If you have any more questions about rent increases, please contact us.