Affordable Rent Tenure Policy - Hyde Housing Association

New
Revision
Resident Services
Affordable Rent Tenancy Policy
Version: 1.0
Scope:
This policy applies to all companies and operating business
units (OBU’s) of The Hyde Group.
Effective Date: April 2012
Review Date: April 2013
Signed Off:
Author:
AR Project Board, Operational Management Team, (OMT),
Group Operational Committee, (GOC), Executive
Management Team, (EMT) Group Board
Sandra Lewis, Strategic Policy Development Manager
Policy Owned by:
Carol Carter, Group Director of Resident Services
National Standards/Regulation:
Regulatory Framework for Social Housing in England from
April 2010
Legislation: Localism Act 2011
Resident Services – Affordable Rent Tenure Policy 1 of 8
Version 1.0 April 2012

Affordable Rent Tenancy Policy
1. Scope
1.1 The Affordable Rent Tenancy Policy will apply to all new build properties developed as part
of the Home & Communities Agency’s (HCA) 2011-2015 development programme and an
annual percentage of general needs re-lets.
1.2 The scope of this policy covers:
a) Rent levels
b) Re-lets
c) Tenure and lettings
d) Criteria for ending or renewing an Affordable Rent tenancy
e) Mutual exchange and succession rights
2. Policy Statement
2.1 Registered Providers (RP’s) of social housing are able to offer Affordable Rent tenancies as
part of a new supply agreement with the HCA.
2.2 The Hyde Group is committed to continuing to provide new affordable homes for people in
housing need and will offer either an Affordable Rent model and/or flexible tenure in
accordance with this policy to new and existing tenants.
2.3 The Hyde Group will ‘have regard to’ relevant local authority tenancy strategies that are
developed.
3. Policy Aims
3.1 This policy sets out The Hyde Group’s approach to implementing and managing Affordable
Rent tenancies.
3.2 We will grant Affordable Rent tenancies for a fixed-term period of five years (following
successful completion of a 12-month Starter tenancy) on all properties built as part of the
2011-2015 Affordable Homes Programme unless specifically agreed otherwise after
consultation with the HCA and our local authority partners.
3.3 We will grant Affordable Rent tenancies for a fixed-term period of five years (following
successful completion of a 12-month Starter tenancy) to an identified proportion of our
general needs re-lets to help fund our 2011-15 development programme.
3.4 Affordable Rents will be set at 80% of the gross Market Rent. We may vary this locally and
set Affordable Rents at less than 80% taking into consideration the Local Authority Tenancy
Strategy. Varying maximum percentage levels will be applied depending on the bed size and
local authority area. The working assumption is that rent levels on re-let conversions will not
exceed £180.00 per week for all properties unless agreed otherwise with the local authority.
3.5 Properties will not normally be converted from Social Rent to Affordable Rent where any of
the following circumstances apply:
Where there is a Section 106 planning agreement or restrictive covenant which is not
compatible with the Affordable Rent model unless a deed of variation has been agreed;
Resident Services – Affordable Rent Tenure Policy 2 of 8
Version 1.0 April 2012

Any stock that has been transferred to The Hyde Group by a local authority where the
stock transfer agreement requires ‘target’ or ‘social’ rent levels;
Where there are borough wide nomination agreements which are not compatible with the
Affordable Rent model;
Any other cases where the local authority is unlikely to amend binding agreements to
permit conversion to Affordable Rent;
Where 80% of the Market Rent is below the target Social Rent plus service charges;
It is supported accommodation;
Where the property has been significantly adapted to meet the needs of a disabled
person;
Where the property may be subject to re-development in the near future.
4. Regulatory Code and Legal Framework
4.1 The Localism Act 2011 makes variations to the Housing Act 1988, which allows RPs the
option to grant fixed-term tenancies and to set rents at up to 80% of Market Rent levels.
5. Definitions
5.1 Affordable Rent – Rent that can be charged up to 80% of the local Market Rent, which is
based on an average of privately rented properties. It is higher than the Social Rent for a
property of this type in this area but will not exceed the Local Housing Allowance.
5.2 Assured (non-Shorthold) Tenancy – A tenancy with no time limit granted under the Housing
Act 1988 (as amended by the Housing Act 1996). It is not an Assured Shorthold tenancy.
5.3 Assured Shorthold Tenancy – A tenancy granted under the Housing Act 1996, which gives
the tenant the right to occupy a property for a fixed period of time, provided that they keep to
the terms of their tenancy agreement. At the end of the fixed period of time (often 12
months), the landlord or the tenant has the right to terminate the tenancy. Assured Shorthold
tenancies can be renewed for another fixed period of time if both parties agree to it.
5.4 Fixed-Term – The length of time (usually five years) a property is let to a tenant granted an
Assured Shorthold fixed-term tenancy.
6. Tenure
6.1 Hyde will use the following types of tenancy when letting properties at Affordable Rent:
a) Starter tenancy – Where Affordable Rent tenancies are granted this will be a starter
tenancy for the first 12-months which will convert to an Assured Shorthold fixed-term
tenancy in line with the provisions in the Starter Tenancy Policy. A starter tenancy can be
extended up to 18 months.
b) Assured Shorthold Fixed-Term tenancy – Following successful completion of a 12-
month starter tenancy we will grant a new Assured Shorthold Fixed-Term tenancy for a
period of five-years if both parties are in agreement. We will not end the tenancy within
this five-year period unless there has been a breach of tenancy.
Resident Services – Affordable Rent Tenure Policy 3 of 8
Version 1.0 April 2012

c) Assured (non-Shorthold) tenancy – Only in exceptional circumstances will we grant an
Assured (non-Shorthold) tenancy. These circumstances are set out in Section 6.2 and
must be approved by the Head of Housing.
6.2 The exceptional circumstances (which apply to conversions as well as new builds) in which
we will offer an Assured (non-Shorthold) tenancy are:
Older residents (occupying older persons accommodation usually aged 55-year plus)
Where a member of a household has serious permanent physical or mental
vulnerabilities such as a permanent physical disability.
Where current tenants on an Assured (non-Shorthold) tenancy which commenced before
1 st April 2012 moves to an Affordable Rent property via management transfers or
otherwise.
6.3 Throughout the five-year fixed-term we will set dates for regular tenancy reviews, taking into
account the tenant’s circumstances. These reviews will consider the household’s wellbeing
and social and economic circumstances.
6.4 A final review will be carried out nine months before the end of the fixed-term. This review
may result in the tenancy either being terminated (upon service of six-months notice), being
renewed for a further five-year fixed-term or the tenant being offered the opportunity to move
to an intermediate rental property, purchase a share of the property or another property
where this is applicable.
6.5 We will safeguard the security of tenure of our existing tenants (tenancies which commenced
before 1 st April 2012) and ensure that they remain on a Social Rent when transferring to
alternative accommodation unless they choose to move to an Affordable Rent property.
7. Allocations – Re-lets and Mobility
7.1 As part of the HCA contract for development of new properties, The Hyde Group will convert
a proportion of existing general needs properties to Affordable Rent.
7.2 Annually, we aim to convert annually a percentage of general needs voids to Affordable
Rent. Which properties will be available for conversion will be subject to the restrictions listed
in Section 3.5.
7.3 The total number, types and locations of properties to be converted will be determined by the
required level of income to be generated as part of the HCA supply agreement, within
identified restrictions.
7.4 If any of the listed restrictions do not apply then The Hyde Group has the discretion to
identify which re-let properties it will convert from Social Rent to Affordable Rent.
7.5 All general needs voids converted to affordable will be offered to the respective local
authority under existing nominations agreements. Agreements to withdraw and let properties
outside such schemes will be sought where a nominee cannot be identified within agreed
timescales or where the local authority gives general dispensation.
7.6 Mutual exchanges will be processed in line with The Hyde Group’s Mutual Exchange Policy.
7.7 At any time during the term of the tenancy we reserve the right to move the tenant to another
property if we find that they are over occupying or under occupying by more than one
bedroom.
Resident Services – Affordable Rent Tenure Policy 4 of 8
Version 1.0 April 2012

8. Rent Levels, Rent Valuations and Rent Setting
8.1 The maximum rent (including service charge) for an Affordable Rent property is set by the
Government at 80% of local Market Rent. However consideration has been given to
affordability. Varying maximum percentage levels will be applied depending on the bed size
and local authority area.
8.2 Affordable Rent levels will be set using a Royal Institute of Chartered Surveyors (RICS)
recognised method and will follow any guidance issued by the HCA on valuation for
Affordable Rent tenancies subject to any local agreement with the relevant local authority.
The rents on re-let conversions will not exceed £180.00 per week for all properties unless
agreed otherwise with the local authority.
8.3 Where an Affordable Rent tenancy is renewed at the end of the five-year fixed-term, the rent
will be recalculated using a RICS recognised method to assess the Market Rent valuation.
This rent will be charged at up to 80% of the market rRent or at the current rent, whichever is
the greater. Rents cannot go above 80% when renewing a tenancy after five years. In some
cases this may result in a lower rent.
8.4 Affordable Rent tenancies will be subject to annual increases of Retail Price Index (RPI)+
0.5% for the duration of the fixed-term.
9. Criteria for Ending Affordable Rent Tenancies
9.1 The purpose of Affordable Rent tenancies is to generate income to fund The Hyde Group’s
development programme to build new affordable homes.
9.2 A review of whether the tenant’s circumstances have changed over the period of the fixedterm
will usually commence nine months before the expiry of the fixed-term.
9.3 We will usually renew all tenancies for a further five years unless:
The tenant/s’ income exceeds the income threshold for which a mortgage is obtainable in
the area and have a positive credit history which would enable them to obtain a
mortgage;
The household is overcrowded and it is feasible to secure a suitable alternative;
The household is under-occupying their home by more than one bedroom;
There has been a significant breach of their tenancy conditions;
Legal action has been commenced or will imminently commence against the tenant; or
household for breach of tenancy.
9.4 We reserve the right to apply discretion (within defined processes) when reviewing the
criteria for ending a fixed-term tenancy.
9.5 If following a review of the household circumstances (see Section 6.3 & 6.4) we determine
any of the above criteria apply and it is not appropriate to renew the tenancy we will normally
serve a Section 21 Notice Requiring Possession before seeking possession
9.6 We will usually serve notice on the tenant no later than six months before the end of the five
year fixed-term and will explain the reasons for not renewing to the tenant.
Resident Services – Affordable Rent Tenure Policy 5 of 8
Version 1.0 April 2012

9.7 Advice and assistance will be offered to the tenant to find alternative accommodation. Either
through:
Hyde New Homes low cost home ownership
Intermediate rents
Housing Options through local authority schemes
9.8 The tenant will be advised that they have the right to request an internal review of our
decision within four weeks of receiving a termination notice to ask that the decision to
terminate the agreement be re-considered
9.9 The Hyde Group will offer an internal review process for any decision not to renew a tenancy
based on the existing Complaints Policy.
9.10 Where a tenancy is renewed this will be for a further five years. The tenant will be asked to
sign a new fixed-term tenancy agreement and the rent will be re-based with reference to
Market Rents at the time of renewal.
9.11 The tenant can end the tenancy at any time by giving four weeks written notice.
10. Managing Affordable Rent Tenancies
10.1 Affordable Rent tenancies will be managed in line with The Hyde Group’s Management
policies.
10.2 Where a starter tenancy is granted the Starter Tenancy Policy and Procedure will also apply.
11. Succession
11.1 We will not grant fixed-term tenancies succession rights outside of statutory rights.
11.2 The Localism Act amends Section 17 of the Housing Act 1988 so that succession rights
apply to fixed-term tenancies but reduces automatic right of succession for all new secure
tenancies (including fixed-term tenancies). From April 2012 there will only be a statutory right
of one succession to a spouse or partner. There will be no statutory right of succession for
other family members.
11.3 On the death of a sole tenant who is not a successor, the tenancy will pass to the tenant’s
spouse, civil partner, or other partner under the provisions of the Housing Act 1988 provided
that they occupy the property as their only or principal home at the time of the tenant’s death.
See Succession Policy.
12. Right to Repair
12.1 The Right to Repair applies.
13. Right to Acquire
13.1 The Right to Acquire does not apply.
14. Review
13.1 This policy will be reviewed annually or in response to changes in legislation, regulation, best
practice or a business need.
Resident Services – Affordable Rent Tenure Policy 6 of 8
Version 1.0 April 2012

15. Diversity and Inclusion
15.1 The Hyde Group will treat all customers with fairness and respect. We recognise that we
have an ethical and a legal duty to advance equality of opportunity and prevent
discrimination on the grounds of age, sex and sexual orientation, disability, race, religion or
belief, gender reassignment, pregnancy and maternity, marriage and civil partnership.
15.2 All customers will have access to this document either through the customer website
www.hyde-housing.co.uk or on request to their local office.
15.3 This document and any related leaflet may be translated or interpreted, or provided in
accessible formats such as large print or Braille according to customers' needs. Further
information can be found in our Accessible Communications Policy, which is available on
www.hyde-housing.co.uk or on request to their local provider.
15.4 Diversity and inclusion training is mandatory for all staff.
16. Equality Analysis
16.1 The Hyde Wide Resident Voice (HRV) Policy and Performance sub group are undertaking
the Equality Analysis for this policy and will ensure that where our customers have any
specific access or communication needs we will do all we can to address them.
17. Publicising the Policy
17.1 The Group publicises its policy on ART to customers, staff and other stakeholders in a
number of ways:
Glossary
Residents Handbook
Leaflets
Residents Newsletter
Resident Website
Policy Briefings and Training
Term
Affordable Rent
Assured non-short-hold tenancy
Assured short-hold tenancy
Fixed-term
Definition
Rent that can be charged up to 80% of the local Market
Rent, which is based on an average of privately rented
properties. It is higher than the Social Rent for a property of
this type in this area but will not exceed the Local Housing
Allowance.
A tenancy with no time limit granted under the Housing Act
1988 (as amended by the Housing Act 1996). It is not an
Assured short-hold tenancy.
A tenancy granted under the Housing 1996, which gives
the tenant the right to occupy a property for a fixed period of
time, provided that they keep to the terms of their tenancy
agreement. At the end of the fixed period of time (often 12
months), the landlord or the tenant has the right to terminate
the tenancy. Assured short-hold tenancies can be renewed
for another fixed period of time if both parties agree to it.
The length of time (usually five years) a property is let to a
tenant granted an Assured short-hold fixed-term tenancy.
Resident Services – Affordable Rent Tenure Policy 7 of 8
Version 1.0 April 2012

Related Documents
Document
Connected policies and procedures:
Leaflets
Link
Allocations & Lettings policy
Void-to-Let Policy
Starter Tenancy Policy
Succession Policy
Mutual Exchange Policy
Resident Factsheet
Version History
Version no. 1.0 Effective date: April 2012
Full/partial review?
New Group policy
Brief summary of changes:
Staff consultation (teams):
Resident consultation:
Signed-off by:
N/a
Date of sign-off April 2012
Affordable Rent Project Steering Group, Carol Carter Group
Director Resident Services, Continuous Improvement Group
chairs, OBU MDs
HRV Policy and Performance Sub Group
AR Project Board, Operational Management Team, (OMT),
Group Operational Committee, (GOC), Executive
Management Team, (EMT) Group Board
Author:
Policy owned by:
Sandra Lewis, Strategic Policy Development Manager
Carol Carter, Group Director of Resident Services
Resident Services – Affordable Rent Tenure Policy 8 of 8
Version 1.0 April 2012