Providers need to be alive to the risk of contractors becoming insolvent and how to limit the resulting inevitable disruption.
There is a change of language from Target Rent to Formula Rents and confirmation:-
- that Formula Rents are to increase annually by the increase in CPI of the preceding September; and
- the end of convergence (unless a waiver is obtained).
The Regulator will only consider issuing a waiver if the inability to continue to converge means that a RP is unable to meet other standards, particularly in respect of financial viability.
These positions will, as we mentioned in our January 2014 Thoughtpiece, cause pressure on some RPs so it is worth reminding providers of where income can be increased. These are:-
- RPs can charge Formula Rents on re-letting
- Where major improvements have been undertaken RPs can have the 30% market value element of the Formula Rent reviewed with a view to charging that revised Formula Rent on re-letting.
Perhaps most significant for the sector in the long-term is the confirmation of “pay to stay”. Properties with tenants and their partners falling into the group known as “Higher Income Social Tenants” or “HISTs” fall out of the Rent Standard, leaving RPs to charge what they wish, but taking into account market forces, the provisions of their tenancy agreements and their governing instruments.
HISTs are tenants, their partners/spouses whose combined household income (no reductions) is more than £60,000 in the relevant tax period. Where several people live in a property the highest two incomes should be taken into account. The period is the full preceding tax year in the year before the Rent Standard. The HCA gives an example that the income received in the 2013/14 tax year would guide the rent payable for the 2015/16 tax year. However, if a HIST household is then subject to a certain and ongoing loss of income, RPs are expected to look again at the rent level. Identification of HISTs, working out what to charge and when that charge needs to be reduced, are certain to occupy RPs over the next few months.
For more information
Housing associations must continue to deliver core functions effectively and compliantly notwithstanding the uncertainty over the standards to which you will be held in the future.
Over the last few years the meaning of “asset management” has changed from being all about repairs to understanding that assets might not stay in an organisation forever.
The Grenfell Tower tragedy has understandably prompted a fundamental reconsideration of how building safety is approached for High-Rise Residential Buildings.
Results from the latest three-yearly valuation of the Local Government Pension Scheme (LGPS) are starting to trickle through.
The potential for Brexit with or without a deal causes uncertainty, and credit rating agencies do not like uncertainty.
Let’s face it, Wills are underappreciated and often overlooked. In fact, around 54% of the British public do not have one!
A recent case throws light on the scope of the exemption for “land transactions” from the need for an OJEU tender process.
A leaked report into maternity services at the Shrewsbury and Telford Hospitals NHS Trust revealed by The Independent has been described as the “largest maternity scandal in NHS history”.
The Pensions Regulator is showing its determination to improve the prudent management of Local Government Pension funds by digging deep into the internal workings of these funds.
To receive invitations to our events, as well as information and articles on legal issues and sector developments that are of interest to you, please sign up to Newsroom.