Rent Setting Policy Background

Published: 1 April 2025

Contents

  1. Rent setting is based on the Government’s Policy Statement on Rents for Social Housing (2019) and the subsequent Rent Standard (2020 and 2023). The Regulator of Social Housing expects all Registered Providers (RPs) (i.e. social housing landlords), including local authorities, to comply when setting and increasing rent for their social housing stock.
  2. The majority of Woking Borough Council’s homes are let at a Social Rent level. Since 2001, these rents have been set using the Government’s Formula Rent methodology for each property.  This is calculated using the relative value of the property, relative local income levels and the size of the property so that similar and regionally adjusted rents are charged for similar Social Rented properties. Formula rents are exclusive of any service charges.
  3. While the annual rent increases are limited to those prescribed by Government guidance, RPs may increase rents to formula rents on a change of tenancy.
  4. In 2011, the Government introduced Affordable Rent which permits rents (inclusive of service charges) to be set at 80% of market rent. The aim of these higher rents was to generate income to support development of additional social homes. Properties can only be let at Affordable Rent when certain conditions apply. Existing vacant properties may be converted from Formula Rent to Affordable Rent in certain limited circumstances.
  5. From April 2020, the Government has permitted annual rent increases on both Social Rent and Affordable Rent properties of up to Consumer Price Index (CPI) plus 1 percentage point until the end of 2025/26.