Our rents are set in accordance with the Governments rent restructuring requirements which sets a target rent for each property.
The target rent is calculated in the following way:
30% of the target rent is based on the January 1999 value of the property.
70% of the rent is based on the average manual earnings in the County.
There are also some minor adjustments for differing numbers of bedrooms.
When this system was first introduced we had all of our properties valued to ensure that the target rents were accurately set.
The target rent is increased each year by the September RPI +0.5%.
We then had until 2012/13 to ensure that all our rents had reached +/-5% of target rents, although we can achieve target rents earlier where possible.
Every year our rents are subject to increases again these are in accordance with the rent restructuring requirements which means that increases are based on the previous September's published Retail Price Index (RPI) figure +0.5%, to enable us to achieve the target rent we can then add a maximum of £2.00.
April 2010 Rents
Very unusually the RPI figure for September 2009 was minus 1.4% therefore the actual change in rents from April 2010 is minus 0.9%.
All Housing Associations find themselves in the unusual position of applying rent decreases to their rents for this year whilst still having to achieve target rents by 2012/13.
In our case this means that those rents where target rents have already been reached will do down, and those rents where we still have to get to target rents will go up.