Does your council need a Housing Association Affordability Check?

This blog answers the question “Does Your Council Need A Housing Association Affordability Check?” The official rent rates for Affordable Rent Housing are fixed at 80% or less compared to the “social rent rate”. This blog also explains the additional rights of tenants under a Housing Association tenancy.

Does Your Council Need A Housing Association Affordability Check?

Your council association will most likely not require an affordability check because housing association rents are controlled by rent caps. The rent increases are also fixed by setting the maximum chargeable monthly rent for a housing association property at 80% of the market value.

Living in a Housing Association house as a tenant is certainly more affordable than living in a normal rented apartment or property (with a private landlord as tenant). Housing Association rents are controlled by the Regulator of Social Housing and keep inflation costs in check.

The monthly  rent caps for Housing Association rents have been set according to the number of bedrooms of the accommodation. £155.73 for renting a one bedroom house, £164.87 for a 2 bedroom house, £174.03 for a 3 bedroom house, £183.18 for renting a 4 bedroom house, £192.35 for renting a 5 bedroom house and £201.50 for renting a 6 bedroom accommodation.

Rent increases for tenants with Housing Association landlords are regulated by The maximum rent for an Affordable Rent Property is set at 80% of the market rate or at a value lower than the social rent rate

The rights of Housing Association tenants are also ensured by the Regulator of Social Housing by using relevant assessments enforcing official safety standards. Ordinary private landlords are not as concerned with keeping their property safe and up to modern standards as they are not registered separately the way a Housing Association is.

What is social rent reduction?

Registered providers of social housing are required to cut down their rents continuously by 1% per annum for the next 4 years. Exemptions to these rent reductions include:

• Short term life renting schemes for homeless people

• Care homes and nursing homes

• Specialised housing options developed as an alternative to care homes. These housing accommodation choices are developed in collaboration with local councils or care providers.

Social rents take account of:

• The location of the property and contribute to maintaining its condition for safe use by tenants

• The earnings of its tenants

• The number of bedrooms present in the property (rent is charged on this basis)

 Guidance on Social Rent reduction published under the Welfare Reform and Work Act 2016 and its amendments sanctions the provisions for reducing the social rent charges of affordable housing accomodation.

Which standards need to be met by a Housing Association home?

The following standards need to be met by a Housing Association home:

• Your home needs to be safe and free from category 1 hazards. Category 1 hazards are things which can pose a serious danger to your health. Such serious dangers include 80% burns, the risk of poisoning or sustaining serious physical injuries

• Your home must be equipped with a standard level of modern facilities

• Your home needs to have adequate heating systems for winter

• Your home needs to conform with housing safety regulation standards

What can I do if I find out that my Housing Association accommodation is unsuitable?

You might be able to move into a new Housing Association Accommodation if you find out that your current Housing Association accommodation is unsuitable. This unsuitability can be due to the following reasons:

• Your accommodation area does not suit your needs as it is too small

• You require to move your residence to a different council or area within your council

• You are unable to claim the same level of benefits (including housing benefit) as before and you are unable to pay your Housing Association service charges.

• Your accommodation is not compliant with your disability requirements or specific health needs

What is a Housing Association licensing agreement?

A Housing Association licensing agreement is signed in the following situations:

• You are renting a single room in a group housing facility run by a Housing Association in which you are sharing communal rooms

• The purpose of your residence in the Housing Association accommodation is to receive care or temporary shelter

What is the Rent Guarantee Scheme?

The Rent Guarantee Scheme matches people who need homes to live in with landlords who have property to lease to tenants. The council pays the rent directly to the landlord beforehand. The council also ensures to pay 6 weeks of rent in advance as a tenancy deposit. The benefits to landlords of the Rent Guarantee Scheme include:

• A guarantee of rent paid to you in advance, directly.

• Upto six weeks of deposit obtained instantly

• A free of charge service

• Video inventories of the rental property to confirm deposit protection 

• Regular inspection of your property

• Reference letters of tenants for your property. The background checks on tenants are made before they can live in your property.

• Prospective tenants can view the property with a day’s notice.

The letting income rate for Houses in Multiple Occupation (HMOs) is £388.92 pcm.

The eligibility requirements for tenants under the Rent Guarantee Scheme are:

• Being homeless or imperilled by homelessness

• Being under active engagement with support services

• Using this opportunity as the last means to secure a (rental) deposit

• Claiming benefits or other evidence of having a low level of income

You can apply for this service by contacting the Homeless Prevention Service. Your council will then assess your entitlement to housing benefit and your current housing situation. You will have to provide the following documents:

• Identity documents for all the members of your household

• Bank account statements from the past 3 months. (for all of your bank accounts)

• Proof of income documents such as payslips and low income benefit letters from your local council

Your last landlord will also be needed to give you a reference letter bearing their name, address and signature. This will be used as proof for checking the duration of time you have spent at a tenant on the property.

The standard template of a landlord reference letter mentions the start date and ending date of a tenancy.

What are leaseholder’s rights?

Leaseholders have the following rights:

• The right to extend their lease or to buy a freehold of a house (or housing association home) under the Leasehold Reform Act 1967

• The right to extend their lease or to buy a freehold of a flat under certain conditions

• The right to buy the freehold of a flat when it is sold, under the Landlord and Tenant Act 1967

• The right to information regarding appealing service charges on their lease

• The right to avoid repossession for owing ground rent or service fees to the landlord in case the unsettled charges are very low

What is an Assured Shorthold Tenancy option?

An assured shorthold tenancy is a tenancy agreement between a Housing Association and its tenant. As an assured tenant you will need to observe the following responsibilities:

• Paying your service charges to your Housing Association on time

• Making sure that the property premises are not used for performing any illegal activities

• The tenant must provide the housing association with prompt access to the property in case of an emergency relating to safety hazards on the premises

• Providing a written notice to your Housing Association if you plan to leave your property vacant for more than 29 days..

Under an assured shorthold tenancy you have the following rights or benefits:

• To be able to purchase your home (at a reduced price) if you have lived on the property as a tenant for a number of years. Under the Right To Buy Scheme UK you can buy your housing association home if it is your primary residence, you are a secure tenant, you have had a housing association landlord for 3 years or more and your property was “self contained”.

• The right to a lifetime tenancy.

• The right to transfer your tenancy to another qualifying person, with the housing association’s approval.

•  The right to have your property covered by the Housing Health and Safety Rating System through an inspection.

A Tenancy automatically qualifies to be an assured shorthold tenancy under the following conditions:

• The house is your tenant’s primary or main residence

• The tenancy agreement commenced (on or) after 15th January 1989

• The landlord does not live in the dwelling.

• The landlord is a private housing association .

Your tenancy fails to qualify as an assured shorthold tenancy under the following circumstances:

• The tenancy is a short term Holiday Home rental agreement

• The service charges or rent stated in the tenancy agreement is under £250 a year (under £1000 a year for London tenancies)

• The rent charges (mentioned in the tenancy agreement ) exceed £100,000 a year.

• If the  shorthold tenancy agreement was agreed at anytime before 15th January 1989

• It is a Commercial Tenancy Agreement between a landlord and a business

• The tenancy agreement has been signed with a housing association as the landlord.

As a housing association tenant, how can I protect my tenancy deposit?

As a housing association tenant you have the right to have your landlord place your deposit in a tenancy deposit protection scheme. This requirement applies to housing association tenancy agreements signed after 6th April 2007 (on assured shorthold tenancies). The Housing Association needs to store the tenancy deposit in the “Tenancy Deposit Protection Scheme” within 30 days of receiving it from its tenant.

This requirement of depositing the amount in the Tenancy Deposit Protection Scheme does not apply if the tenancy deposit is received as a valuable item (instead of money). The scheme ensures that the tenants will be returned their saved deposits if they conform to the following rules during their tenancy:

• Abide by all the terms agreed with the Housing Association in their tenancy agreement

• Pay the Housing Association rent and property bills in full (and on time)

• Are careful not to vandalise, harm or tamper with any of the items on their property.

There are 3 available tenancy deposit protection schemes you can choose from. The first one is the Deposit Protection Service, the second one is My Deposits and third one is the Tenancy Deposits Scheme

Conclusion

This blog post addressed the question “Does Your Council Need A Housing Association Affordability Check?” Most Housing Association homes are secured from sudden rent rate hikes and also follow the (annually updated) rent standards set for social housing tenants. Housing Association tenancies are secure and landlords can easily be held accountable.

Please feel free to comment on the content or ask any questions in the comments section below :

Frequently Asked Questions (FAQs) : Does Your Council Need A Housing Association Affordability Check?

What are my rights as a Housing Association Tenant?

Your rights as a Housing Association Tenant are mentioned by your housing association in a written tenancy agreement, which should include:

• Knowing the exact duration of the tenancy, in case it is a fixed tenancy.

• The right to know your housing association’s name, contact number and postal address. Basic contact details must be revealed to you by your housing association under The Housing Associations Act 1985.

• The right to legally defend yourself against unlawful eviction, under the Protection From Eviction Act 1977

• The right to be able to contest unfair rent increases by your housing association.

• The right to live in the housing association accommodation  without any harassment from your landlord which can include physical or verbal threats, threats to cut off your electricity, gas or water supplies or the illegal confiscation of items from your property.

These actions will be considered as “harassment” (which is a criminal offence) under the   Protection from Eviction Act 1977.

• The right to view an Energy Performance Certificate for your housing association home.

• The right to a written tenancy agreement in case you have a fixed tenancy lasting more than 3 years.

• The right to be provided with a copy of the “How To Rent Guide”once you have an assured shorthold tenancy or a fixed tenancy with the housing association.

• The right to be living in a property which is compliant with gas electrical and fire safety regulations. Also the right to have your home certified by the housing association as “fit for human habitation” under the Homes (Fitness for Human Habitation) Act 2018

• .The right to have your tenancy deposit returned at the ending date of your tenancy with the housing association.

You also have certain responsibilities as a tenant to your Housing Association which are as follows:

• You need to provide access to your housing association for inspection and repairs

• You must repair on your own and make expenses on any damages incurred to the property by your family or friends.

• You cannot sublet a housing association property, as it is against the law. There may be some provisions allowing you to sublet part of your home.

• You should pay your agreed housing association service charges on time regardless of any issues with rent increases or other problems.

What happens if a Housing Association tenant dies without an executor or a will?

If a Housing Association tenant dies without an executor or will, the tenancy is transferred to a Public Trustee.This can also be the case if the person dies with a will but without an executor. In order to reclaim your property from the Public Trustee you will need to :

• Post or personally deliver a letter on the person’s last known address mentioning that you have presented them with a legal notification

• Email a copy of your notification and a copy of a completely filled NH1 form to the Public Trustee’s email address

• Submit an application fee to the Public Trustee. This completes the registration of your legal notice

The application fee of £40 needs to be sent to the account of the Public Trustee. Details: Account Number 10014069, Sort Code 802650. This fee can only be sent through Bacs payments.