How Your Rent is Calculated

Up until March 2002, social landlords in different areas used slightly different ways of setting rents (such as points systems). This meant that it was not always possible to compare the rents of different landlords, including those in neighbouring areas.

The Government wanted the rents charged by social landlords (which includes Swindon Borough Council) to be fair and affordable. The Government believes that rents should:

• Remain affordable in the future
• Generally be well below those charged by private landlords
• Be linked to size, location and condition of the home; and
• Be similar to rents for other council and housing association properties of a similar size, location and condition

Following consultation with councils and housing associations, the Government produced a formula for setting rents, which takes into account the value of the property, the number of bedrooms in the property and local earnings. This rent is known as the formula or target rent. Swindon Borough Council owns approximately 10,900 properties and a formula rent must be calculated for each of its properties.

Because the rents charged by the Council are different to the formula rents for each of its properties, the Government have allowed social landlords such as Swindon to move their actual rents gradually towards the formula rent over a ten-year period starting from April 2002 and ending in March 2012.

The higher the property value, the more bedrooms a property has and the higher the local earnings, the higher the rent will be. The opposite is also true.

Because the changes are made over a ten-year period, any rent change should be gradual. To make sure tenants do not face large increases, the Government has said that in any one year, a tenant’s weekly rent cannot go up by more than the rate of inflation plus 0.5% plus £2.

Swindon Council sets the rents for all its properties annually each February following extensive consultation with its tenants.

How Your Service Charges Are Calculated

The Government’s formula only applies to the rent a tenant pays for their home. The Council can also charge a service charge but these charges can only cover the cost of providing the service. These services are normally communal services where many tenants benefit. For example, in a multi-storey block, Swindon charges its tenants a service charge to cover the costs of caretaking and cleaning of that block.

Further Information/Contact

Please telephone Haydn Jones, Housing Finance Manager, on 01793 464362 or e-mail him at hjones@swindon.gov.uk.