New Schedule 1 - ‘Further provision about social housing rents - Part 1 - Provision about levels of rents

Part of Welfare Reform and Work Bill – in a Public Bill Committee at 10:45 am on 20 October 2015.

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Tenancy of affordable rent housing

3 (1) This paragraph applies in relation to a tenant of social housing in England if—

(a) the tenancy begins after the beginning of 8 July 2015, and

(b) the accommodation is affordable rent housing (see paragraph 4).

(2) If the tenancy begins before or at the beginning of the first relevant year, the registered provider must secure that the maximum amount of rent payable to the registered provider by the tenant in respect of the first relevant year is the amount found by—

(a) determining the rate of the market rent for that social housing when the tenancy begins, and

(b) determining the amount that is 80% of the amount that would be payable in respect of a year if that rate had applied during the year.

(3) If the tenancy begins after the beginning of the first relevant year, the registered provider must secure that—

(a) the maximum amount of rent payable to the registered provider by the tenant in respect of the part of that relevant year falling after the tenancy begins, where the tenancy begins after part of a relevant year has elapsed, or

(b) the maximum amount of rent payable to the registered provider by the tenant in respect of the relevant year, where the tenancy begins at the beginning of a relevant year,

is the amount found by determining the rate of the market rent for that social housing when the tenancy begins, determining the amount that is 80% of the amount that would be payable in  respect of a year if that rate had applied during the year and (if necessary) reducing that amount in proportion to the part of that relevant year that elapsed before the tenancy begins.

(4) If the tenancy begins after the beginning of the first relevant year and not at the beginning of the second or third relevant year, the registered provider must secure that the maximum amount of rent payable to the registered provider by the tenant in respect of the relevant year following the one in which the tenancy begins is the amount determined under sub-paragraph (2) or (3) (disregarding the proportionate reduction) reduced by 1%.

(5) If—

(a) the tenancy comes to an end after part of a relevant year to which sub-paragraph (2), (3) or (4) applies has elapsed, or

(b) sub-paragraph (2), (3) or (4) ceases to apply in relation to the tenancy after part of the relevant year in question has elapsed,

sub-paragraph (2), (3) or (4) has effect in relation to the part of the relevant year falling before that time with a proportionate reduction in the maximum amount of rent payable to the registered provider by the tenant.

(6) The market rent is to be determined using a RICS valuation method.

4 (1) This paragraph has effect for the purposes of paragraph 3.

(2) Affordable rent housing is accommodation identified by regulations made by the Secretary of State as accommodation that may be let as social housing at an affordable rent.

(3) Regulations under sub-paragraph (2) may, in particular, make provision for identifying accommodation that may be let as social housing at an affordable rent by reference to an agreement or arrangement relating to the provision of social housing by a registered provider.

(4) Regulations made by virtue of sub-paragraph (3) may, for example, make provision by reference to—

(a) an agreement relating to the exercise of a power under section 5 or 19 of the Housing and Regeneration Act 2008 (powers of the Homes and Communities Agency as regards the provision of housing or other land and financial assistance);

(b) an agreement relating to the exercise of a power under section 30 or 34 of the Greater London Authority Act 1999 (general and subsidiary powers of the Greater London Authority);

(c) an agreement between a local authority and the Secretary of State under section 11(6) of the Local Government Act 2003 (agreement about capital receipts payable to the Secretary of State).

(5) The Secretary of State may by regulations define “affordable rent”.

(6) Regulations under sub-paragraph (5) may, in particular, make provision by reference to—

(a) standards issued by the regulator under section 194(2A) or 198(3) of the Housing and Regeneration Act 2008 (the powers of the regulator to set and revise standards relating to levels of rent) providing for the setting of rents at up to 80% of market rent in certain cases or circumstances, or

(b) guidance issued by the Secretary of State relating to the setting of rents at up to 80% of market rent in certain cases or circumstances.

(7) “RICS valuation method” means a method for determining market rent that complies with standards for valuation published from time to time by the Royal Institution of Chartered Surveyors.