Your rent and service charges: 2024-2025
Changes to your rent from April 2024
We will be writing to you this week to confirm changes to your rent and/or service charge from 1 April. Your letter will give you the exact figure. General rent will increase by 7.7%. For shared owners, the rental increase is 9.4%.
We understand this is a higher rise than in recent years and would like to explain the reasons for this and the support available to you.
Why is the rent rise higher than recent years?
The government uses a set formula for social housing rents each year, which is called the Rent Standard. It takes into consideration the size, location and relative value of the property. The rent is set by using the Consumer Price Index (CPI) from the previous September plus 1%. The CPI is a specific measurement of inflation. In September 2023 this was 6.7%.
By using the government formula, the rent increase from April 2024 is 6.7% plus 1% = 7.7%.
Last year, for the rent period from 1 April 2023 to 31 March 2024, the CPI plus 1% would have been 11.1%. However, the government capped the increase at 7% to reduce the impact on residents during the height of the cost-of-living crisis. bpha supported this and absorbed the extra costs.
While we have – and will continue to – absorb what costs we can, we need to increase rent in line with the government formula to fulfil our purpose and provide homes and services.
Shared ownership rents are set in line with your lease agreement. For most customers, this is set using the Retail Price Index (RPI) from the previous September, plus 0.5%. In September 2023 this was 8.9%.
So, using the formula, the rent increase for shared owners from April 2024 is 8.9% plus 0.5% = 9.4%.
Where rent money goes
As a social landlord, we invest rent money back into providing homes and services for local people and communities.
At the moment, the cost of doing this is high - and costs have risen substantially. Building costs, for example, have gone up 27%, and buildings insurance has increased by 20%. The volume and cost of repairs to properties has significantly increased. We’ve also been affected by the increase in interest rates over the last year, meaning our mortgage repayment costs have gone up.
Over the last year, new building safety regulation has been put in place to protect residents in the wake of the Grenfell tragedy. We support any move that makes our customers safer, however making the required checks, assessments and any resulting changes is also costly. Communal fire door checks, for example, cost £150,000 per year, plus any works to ensure they meet the required standard.
Getting value for customers
We continue to try to get you the best value for money that we can. We recently fixed gas and electricity for communal areas and for customers on a heat network, resulting in a saving for many as prices continued to go up. We have also invested in making many homes warmer and more energy efficient to reduce energy costs - 87% of homes are now at Energy Performance Certificate (EPC) band C (rental homes are required to have an EPC rating of band E and above, with an A rating being the highest).
We are continuing this work to increase the number of homes rated at EPC band C and above.
We also restructured parts of bpha in 2023, making some savings through redundancies.
Service charges and other costs
We have also reviewed our service charges and have worked hard to ensure value for money for all the services we provide.
Supporting you
If you are worried about being able to pay your rent, please let us know. Our Money Advice Team can give you practical support to review your financial situation.
Over the last full financial year, the team helped customers claim £1,287,519 in welfare benefits, and provided over 100 homes with financial support to manage fuel and household costs.