How we set your rent and service charges

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Rent charges

Jigsaw Homes charges rent every Monday. Your tenancy agreement states that ‘Your rent is due weekly and in advance’.

For existing tenants who have a clear rent account and normally pay on a monthly basis your new monthly payment will be calculated by using your rent charge as at 5 April 2022 and multiplying it by 52 weeks and dividing by 12.  If an account is in arrears, this will be factored into any calculations.

If you pay your rent by direct debit, your payments will be recalculated and you will be sent details of your payments in the post. If you pay by standing order, you will need to inform your bank of your new rent charge. If you have any questions please contact us on 0300 111 1133.

Social rent

Social rent or ‘Formula Rent’ is initially set using a calculation outlined in the Government framework. The aim of the framework is to make the process of setting rents across the country impartial and linked directly to the value of the property you live in, the number of bedrooms and the average earnings within the region.

The current government rules state that social rents can be increased by the previous September’s Consumer Price Index (CPI) plus 1%.

The CPI in September 2021 was 3.1% so rents will increase by 4.1% from April 2022.

Affordable rent

The Government framework outlines the calculation to initially set an affordable rent, which equates to approximately 80% of market rent for a similar property within the area. This rent will then be increased or decreased each year dependent upon the government rules at that time. The annual 1% rent decrease also applies to affordable rent. The Government framework outlines the calculation to initially set an affordable rent, which equates to approximately 80% of market rent for a similar property within the area.

The current government rules state that from April 2021 Affordable rents can  increased by no more than last September’s Consumer Price Index (CPI) plus 1%.

The CPI in September 2021 was 3.1%

Affordable rents in April 2022 will be increased by 4.1%

 

Shared ownership rent

Shared Ownership allows you to buy a share of a property and rent the remaining share from us. The amount of rent paid is dependent upon the share that you own. For example, if you had purchased a 60% share you would only be charged rent on the remaining 40%.

Rather than a tenancy agreement, shared owners have a lease. This lease outlines the responsibilities on both the shared owner and us. The lease also sets out how the rent will be reviewed. Although leases may vary the rent calculation tends to allow for an annual inflationary increase + 0.5% each year.

Fair rent

Fair rent applies to a tenancy that began before 15th January 1989. The rent is calculated independently by the Valuation Office Agency every 2 years. The rent that Valuation Office Agency registers is the maximum that can be charged until the rent is registered again.

It is possible that we may review the amount that we are charging you on the first anniversary of the registration but this amount will never be greater than the registered rent.

Service charges

The service charges you pay will depend on where you live and the services you receive. Your tenancy agreement states which services you receive. These details are also listed on your rent review notice. Some may be personal to you, such as personal heating and hot water, water rates or home contents insurance.

Depending on the kinds of service charges you receive, these may increase or decrease on an annual basis. You will receive notification of any changes to your service charges with your rent review notification.

Housing benefit and Universal Credit cover most communal charges but NOT any charge that is personal to you.

Changes to your rent and service charges

This year, the Government guidance allows rents to be increased by up to 4.1%. This has been calculated following a set formula that makes sure rent levels are capped and remain at an affordable level.

It combines a ‘cost of living’ increase, set using the Consumer Price Index (CPI) measure of inflation, which in September 2021 was 3.1%, plus an additional 1%.

You can read more about the Government’s adjustment of formula rent here

Like many housing providers across the country, Jigsaw Homes is applying a rent increase of 4.1% for 2022/23 to enable us to meet the increased costs of delivering services and maintaining our homes.

The decision was taken by Board members following detailed analysis and discussion of the options available.

For the majority of tenants, this will take effect from 4 April 2022 and for others this will be applied in October 2022.

At your rent review date, you will receive details of your rent and service charge for the coming year. When you receive this, it will tell you when the increase will take place, by how much and any steps you need to take.

We always aim to keep rents as affordable as possible.  We have to balance this aim with the rising costs of repairing and maintaining homes and other essential goods and services.

The rent increase will enable us to meet the increasing cost of maintaining homes, delivering services and investing in new and existing homes, now and in the future.

Any money we make goes directly back into repairing and maintaining homes to ensure they are safe and of good quality, funding vital services and improving the energy efficiency of homes to reduce fuel bills and work towards national zero-carbon targets. It also helps us deliver much-needed new homes to help tackle the lack of affordable housing.

 

 

Payments and getting help

If you are paying by Direct Debit , we will make the necessary alterations to your Direct Debit. Once this is done, you will receive a letter notifying you of the payment amounts and the dates this money will be taken from your bank account. Direct Debit is our preferred method of payment.

If you are paying by standing order through your bank, you should inform your bank of any changes in the amount you need to pay and ensure that your payments cover both your existing and new rent charges.

We also provide an online benefits calculator on our website – https://jigsawhomes.entitledto.co.uk/ – which can be used to work out whether you are entitled to benefits based upon your current income.

 

As long as your circumstances have not changed, if you are entitled to Universal Credit housing element and Housing Benefit you should find these are increased to cover the increased rent and any service charges.

If you are claiming Housing Benefit, we will inform your Local Authority Housing Benefit Department of your revised rent and service charge. It is your responsibility to ensure your Housing Benefit is paid at the correct rate.

If you are claiming Universal Credit, you will need to notify the Department of Works and Pensions (DWP) of any changes to your rent and service charge. The association is unable to do this on your behalf. Depending upon your Universal Credit claim, you can do this by:

  • Updating your journal, if your Universal Credit claim is solely managed online
  • contacting Universal Credit on 0800 328 5644
  • providing a copy of the rent charge letter to DWP/Job Centre Plus

We understand that with wider increases in living costs and the financial pressures of the pandemic, that this may be a difficult time, so if you are worried that you might not be able to pay your rent, you should contact us immediately.

We offer help with benefit entitlement, debt and other financial advice through our dedicated Money Advice Service. This is a free and confidential service that might help increase household income, or make better use of it. You can call our specialist team on 0300 111 1133.

There is more information on all this included in the Frequently Asked Questions section.

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