One Housing Group – Affordable Rent Strategy 1. Introduction This statement sets out One Housing Groups (OHG) position on Affordable Rent. It sets out some guiding principles on Affordable Rent and covers the affordability thresholds supported by the Group 2. Background The aim of Affordable Rent is to assist in the delivery of new social housing and provide an offer which is more diverse for the range of people accessing social housing, providing alternatives to traditional social rent. Affordable Rent is part of a package of new measures announced to create a more flexible social housing sector. ‘Local decisions: a fairer future for social housing’ published in November 2010 proposed a new form of tenancy, giving local authorities greater control over who is able to apply for and is eligible for social housing and discharge of homeless duty into the private rented sector. This greater flexibility is equally important for Housing Associations. It is very relevant to OHG in the context of our corporate objectives to provide balanced sustainable communities and neighbourhoods of mixed income and mixed tenure. 3 Rent Policy Guiding Principles In considering our policy response to the changed political landscape and the new freedoms within it, we have approached the development of our affordable rent policy as one which should: • Target those households on low to average incomes that are currently excluded from our social housing or home ownership products. • Support aspiration and social mobility among our residents • Help mix and in some instances re-balance our communities such that we house a range of people on different levels of income • Increase our capacity to fund further development of new homes • Relate to the market in a coherent, consistent and realistic way. e.g. - Larger properties should cost more to rent than smaller properties; homes in high value areas should cost more to rent than those in low value areas. • Consider welfare reform in this process 4 Main Characteristics of Affordable Rent • • • • • • • • • • It is a form of social housing and is part of a new funding model for affordable housing delivery We are able to convert vacant social rented properties to Affordable Rent at a proportion of up to 80% of gross local market rent (inclusive of service charges) for an equivalent property for that size and location. The National Affordable Homes Programme 2011-15 Framework states that there are circumstances where less than 80% may be appropriate: These include: In properties where rents are close to or exceed Local Housing Allowance (LHA) caps. For regeneration schemes where prior commitments have been made Specialist housing for the elderly and those on fixed incomes Conversion of tenancies is subject to being in contract with the HCA and additional income will assist in the funding new supply. OHG is in contract with the HCA Affordable Rent tenancies will have minimum fixed tenancy periods of five years. Full details are published in our Tenancy Policy Affordable Rents will be set using approved RICS methodology taking into account, location, property size and condition. During the tenancy period, rents will increase by RPI +0.5 per year Housing Benefit payments for Affordable Rents will be based on actual rents. Lettings to affordable rented homes will be will be targeted towards specific groups consistent with our tenancy policy. The changes are accompanied by welfare reform, with a universal credit replacing current benefits from 2013. This will be capped at £350 for a non working single person and £500 per week for a non working couple or family. Affordable homes programmes will be designed to meet local priorities established in partnership with local authorities and through our Resident Involvement Framework and the Area Boards