Setting the standard – The Rent Standard one year on

Andy Chapman

Senior Consultant

The social housing sector has now had just over a year to adjust to the new reality of rising rents, following half a decade of declining income from their property portfolios. But with that new reality has come new challenges for registered providers.

Compliance with the rigorous requirements of the new Rent Standard, which came into force in April 2020, is the most obvious of these challenges. The risks are clear: being declared non-compliant and the unwelcome arrival of a regulatory notice from the Regulator of Social Housing.

But how can providers avoid this risk when setting rent levels for properties or rent increases in line with the new standard?

DTP has been working with a number of providers over the last 12 months to ensure their rent policies and procedures are watertight.

And while there’s plenty of good work going on, we have noticed a number of common issues facing many providers. The good news is: these can be addressed if the right approach is put in place.

This starts with ensuring you have a clear documented set of strategic principles for meeting the requirements of the Rent Standard. The rent policy is the foundation on which everything else is built and has to be agreed at board level. Getting this right is where we always start when working with a provider to ensure compliance.

With this in place, what else is required? I’d start with five key areas of focus …

  1. Ensure your staff have the required skills and knowledge around rent setting. Sadly this has often been neglected and has been seen as a low priority.
  2. Address any data quality issues. All too often we have come across examples of missing valuations, incorrect formula rent setting or not using the correct county to establish the right formula rent.
  3. Make sure you fully understand the rent formula within the Rent Standard and where a rent increases need to be capped at CPI only. So where properties already have a rent higher than the formula you can only apply an increase based on CPI – so not including the additional 1%. This may sound small, but it is enough to trigger non-compliance.
  4. Be careful when adding additional service charges to affordable rented properties. This is a common mistake we see – and, if the charges are too high, this risks taking the rent above the 80% of market rents allowed under the Rent Standard for this type of property.
  5. Understand the rules around tenants with Fair rent protection. Under the standard, the rent charged to the tenant must not exceed either the formula rent or the registered rent (whichever is lower). Again, this is a common mistake which we’ve noticed.

DTP has helped many providers in the last year to review their compliance with the Rent Standard based on their own unique stock profile. This involves looking at a representative sample of your core rent data or your whole portfolio to ensure you are meeting the requirements of the standard in full.

Crucially, this means you will be able to identify any potential gaps in compliance and avoid them becoming an issue with the regulator. Our approach is unique to your needs and circumstances and will help to you understand your own data, providing you with much needed external checking and assurance.

Get in touch with the DTP team if you feel you would benefit from support around Rent Standard compliance. You can also listen to my podcast on this issue on youtube –