Rent increase April 2023
Update on rent increases for 2023-2024
Each year we review our residents’ rent. The amount we can increase rent by to cover increases in our running costs follows a formula set by the Government.
For residents in social rent homes this is based on September CPI plus up to an additional 1%. CPI is the Consumer Price Index, a commonly used measure of inflation.
For most residents in intermediate rent homes we follow the same formula as for social rent housing.
For the majority of Shared Owners we use a formula based on RPI plus 0.5%, often based on September RPI but in some cases this varies according to the lease. RPI is the Retail Price Index, the other most commonly used measure of inflation.
This year inflation is very high. This means that CPI and RPI were both at a high level when they would have been used to set next year’s rent rises.
Following consultation with the Government, social housing providers, including Newlon, have agreed to cap the increase for social renters at 7% from April 2023 to help minimise the impact on residents. This cap only applies to social tenancies.
However, we have decided to limit the rent increases to 7% for all of our residents in light of the difficult economic climate we are in. Therefore the rent increases from 1st April 2023 for intermediate rent and Shared Ownership residents will be limited to 7% in line with the social rent cap.
If we had followed the usual formula social renters and most intermediate renters would have faced increases of 11.1%. Shared Owners would have faced a 13.1% increase on average and in some instances more.
The Government has also confirmed that benefits will increase in line with inflation. If you receive Housing Benefit, Universal Credit or another form of benefits to pay your rent, these payments will rise from April onwards.
Why do we need to increase rents?
As a not-for-profit, charitable housing association, any money we collect from rents is invested in maintaining our current homes or providing much needed new affordable housing.
Our costs are increasing at a significantly higher rate than inflation, especially for core services such as providing repairs and maintenance, building materials and service contracts. This means we need to increase rents to continue to safely provide key services, improve the homes we manage, invest in critical fire safety works, build new affordable homes and support our local communities.
We are also working very hard to minimise service charge increases for next year. This includes working in partnership with residents to look at ways we can minimise service charge costs. Nevertheless there are likely to be significant increases in service charges due to increased contract costs and large increases in specific areas including buildings insurance, where the costs for cover have increased at a higher rate than in previous years.
Support during the cost of living crisis
We know that many people are facing financial difficulties at the moment because of rising prices and energy bills.
If you are struggling to pay your rent or service charges please contact us as soon as possible so we can agree a payment plan.
The sooner you contact us if you are struggling the easier it will be for us to help you. Please contact us on 020 7613 8080 or 0800 316 7989. You can also email email@example.com or arrange to come into to our office by appointment to discuss your circumstances.
Newlon has signed up to the National Housing Federation’s pledge that no one will be evicted as a result of financial hardship, provided they contact us to arrange to get their payments back on track.
We will work with any residents struggling to pay their rent to set up manageable repayment arrangements where needed.
Help and support
There is a wide range of help and support available for households during the current cost of living crisis.
You can find more information at www.newlon.org.uk/cost-of-living-support. This information includes signposting to the support available from the Government and your local authority for people experiencing hardship, as well as assistance that Newlon can provide including support with finding employment and specialist benefits advice.