Rent reductions: Supporting implementation

This revised briefing sets out the practical implications of implementing the -1% rent cut in the Welfare Reform and Work Bill.

27 January 2017

Revised and reissued 15 June 2017.

Summary of key points:

  • The Welfare Reform and Work Act 2016 imposes an obligation on social landlords to reduce rents by 1% per year from April 2016 for a four year period.
  • The  rent cut will apply to almost all tenancies that are currently subject to the Rent Standard.
  • Where a social rent property is relet to a new tenant, the association may choose either rent at the formula rent (which also decreases by 1% annually) or the rent charged as at 8 July 2015.
  • There is no statutory or other official mechanism for reducing the rent. Tenants should receive formal notice of the change but in most cases the statutory form should not be used.
  • For supported and sheltered housing, the introduction of the rent cut is delayed for a year until 2017.
  • The Government has confirmed that from April 2017 the rent cut will apply to all supported and sheltered housing subject to the rent standard apart from refuges and almshouses.
  • Fully mutual co-operatives and Community Land Trusts will also not be subject to the rent cut for the full four year period. 
  • Housing associations can apply for either a full or partial waiver. The Government has issued guidance on applications for a waiver.  

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