Important information about tenancies and rent

New Types of Tenancy

The Government has announced major changes to the way councils and housing associations can rent out homes.

There will be two main types of rent:
• Social rents
• Affordable Rents

And two types of tenancy lengths:
• Lifetime Tenancies
• Flexible Tenancies

Why the change?

The Government has brought in these changes to ensure that social landlords can continue to build new homes.

Who is affected?

Most of the changes will only affect new tenants, but existing tenants may be affected if they move home.

Rents

At the moment Housing Associations rent most of their homes out at Social Rents. Housing Associations will now be allowed to offer some tenancies at higher rents which could be up to 80% of a market rent. This is called “Affordable Rent”.

Housing Associations will be able to charge the “Affordable Rent” on new build homes and will also be allowed to let some of their existing properties to new tenants at Affordable Rents. Tenants will still be able to claim housing benefit to help with their rent.

Rents on Larger Homes

Affordable rents on some larger homes are expected to be set at a lower percentage of a market rent in order to keep rents lower for families. This means that in some cases rents on larger homes will be the same as, or less than, rents on 1 & 2 bedroom homes.

Some properties will continue to be let at lower or social rents.

Length of Tenancy

The Government will be introducing a new tenancy called a “flexible tenancy” for new council and housing association tenants.

Unlike existing tenancies, which are tenancies for life, the new “flexible tenancies” will be for a limited fixed term.

The tenancy length on a fixed term “Flexible Tenancy” will generally be 5 years or more, but in some limited circumstances they may be as little as two years. Landlords may continue to let properties on “Lifetime tenancies” if they wish.

The tenancy length (“Lifetime” or “Flexible”) will be set by the landlord at the start of the tenancy so you would know what you are being offered before you sign up.

Most tenancies offered by Housing Associations at an ‘Affordable Rent’ are likely to be offered as a fixed term ‘Flexible Tenancy’. From April 2012 Local authorities will be able to offer fixed term Flexible Tenancies to new tenants on social rents.

All landlords will have Tenancy Policies, which will set out the circumstances in which different tenancies and rent levels apply.

Existing Tenants

Existing housing association and council tenants can choose to move to accommodation being offered at an Affordable Rent rather than a social rent, but if you do this you could lose your right to a lifetime tenancy. Existing tenants seeking a transfer need to pay particular attention to the type of tenancy offered and the rent level being advertised.

Existing council and housing association tenants should get advice before moving to a property advertised at 'Affordable Rent' or any tenancy offered on a fixed term flexible tenancy.

Changes on Locata

In order to help people bidding for homes a change has been made to the property advertisements on Locata. Properties advertised at the new rents will be clearly marked with a new “Affordable Rent” icon:

The tenancy term (Lifetime or Flexible) will be set by the landlord at the start of the tenancy.