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Social Rented Housing: Rents

Volume 468: debated on Thursday 29 November 2007

To ask the Secretary of State for Communities and Local Government who is responsible for setting the upper limit of social housing rent which each local authority is authorised to charge; how that upper limit is calculated; and if she will make a statement. (165544)

Rent-setting powers of local authorities are set out in section 24 of the Housing Act 1985. Local authorities are free to set whatever rents they consider reasonable. Government have no rent-setting powers.

When setting rents, local authorities will have regard to the ‘guideline rent’ for their authority. This is the notional rent that operates inside the Housing Revenue Account (HRA) subsidy system and is used to calculate the assumed rental income for the authority, that calculation forming part of the authority's overall entitlement to HRA subsidy. Each authority has its own guideline rent.

Local authorities will also have regard to the ‘limit rent’ for their authority. This is the maximum level to which the Department for Work and Pensions will pay housing benefit on the dwellings in that authority.

Guideline and limit rent is calculated using a formula that takes a number of factors into account, including the type and location of the housing authority's dwellings, local factors such as manual worker salaries in the county the authority is in, and national factors such as inflation.