New legislation affecting rent increases announced

The Social Housing Rents (Exceptions & Miscellaneous Provisions) (Amendment) Regulations 2017

The Social Housing Rents (Exceptions & Miscellaneous Provisions) Regulations 2016 have been amended by the introduction of the Social Housing Rents (Exceptions & Miscellaneous Provisions) (Amendment) Regulations of 2017 (The Regulations).  These amendments come into effect on different dates.

The main additions and amendments to the Regulations are as follows:

• Exemptions to the rent decrease legislation for accommodation provided by almshouses, co-operative and fully mutual housing associations, and accommodation provided by community land trusts.  Furthermore, these bodies can use the 5% tolerance on reletting.
• Domestic violence refuge accommodation is a new category of accommodation that is exempt from the rent decrease legislation and has been defined.  The key issue for providers is whether their Domestic Violence accommodation falls within the definition of a “hostel”.
• Extended definition of intermediate rent to include in particular the Mortgage Rescue scheme.
• There is a limit to the increase these accommodation types can increase the rent which is in line with the Rent Standard (CPI + 1%).

Domestic Violence Refuge Accommodation (comes into force 1 April 2017)

The definition of domestic violence refuge accommodation type is defined as:

 “domestic violence refuge accommodation” means accommodation in a hostel which is used wholly or mainly for the non-permanent accommodation of persons who have been victims of domestic violence and have left their homes as a result of that violence—

(a) which is usually staffed 24 hours a day by persons whose normal duties include providing support to the residents of the hostel, and

(b) to which access by non-residents is controlled,

and for the purpose of this definition—

(i) “hostel” has the meaning given in section 622 of the Housing Act 1985(a),

(ii) “domestic violence” means any incident, or pattern of incidents, of controlling, coercive or threatening behaviour, violence or abuse (whether psychological, physical, sexual, financial or emotional) inflicted on or threatened against a person over the age of 16 by an associated person,

(iii) “coercive behaviour” means an act of assault, humiliation or intimidation or other abuse that is used to harm, punish or frighten the victim,

(iv) “controlling behaviour” means an act designed to make a person subordinate or dependent by isolating them from sources of support, exploiting their resources and capacities for personal gain, depriving them of the means needed for independence, resistance or escape or regulating their everyday behaviour,

(v) “associated” has the same meaning as in Part 4 of the Family Law Act 1996 (see section 62 of that Act);”.

The important point from the definition is that domestic violence refuge accommodation must meet the definition of hostel for this exemption to apply.  The definition of a hostel is:

“hostel” means a building in which is provided, for persons generally or for a class or classes of persons—

(a) residential accommodation otherwise than in separate and self-contained sets of premises, and

(b) either board or facilities for the preparation of food adequate to the needs of those persons, or both”

If the above is satisfied, the rent increase is limited to the Rent Standard increase of CPI + 1%. Re-letting of these types of accommodation will also allow for a tolerance of 10% to be applied.

Intermediate Rents (comes into force 1 March 2017)

The Mortgage Rescue Schemes within Affordable Homes Programme 2011-2015, London Living Rent Homes for Londoners 2016-2021 and the London Housing Zones programmes have specifically been included in the definition of Intermediate Rents to confirm that they are also exempt from the rent decrease legislation.

“accommodation is low-cost rental accommodation which was funded wholly or in part by public assistance under an intermediate rent accommodation enabling programme and any conditions under that programme regarding the circumstances in which the accommodation may be let as intermediate rent accommodation are satisfied.”

For more information

If you have any queries regarding the new legislation or whether the rent exemptions will apply to your housing stock, please contact Zishaan Saleem or Jonathan Cox for further information or advice.