Some decades ago a number of almshouse charities became Registered Social Landlords, regulated by the Housing Corporation, in order to apply for social housing grant. The Housing Corporation has been abolished. Its regulatory function was taken over by the Homes and Communities Agency (‘HCA’), and Registered Social Landlords were re-named ‘Registered Providers of social housing’, or ‘Registered Providers’ for short.  In late 2017 the HCA became Homes England (HE) and the regulatory division is now called the Regulator of Social Housing (RSH).

Even if the charity’s original application for social housing grant was refused, the charity remains on the HCA register of Registered Providers unless and until the trustees successfully apply to have it removed.

The gateway page to everything to do with HCA regulation is here: https://www.gov.uk/topic/housing/social-housing-regulation-england

However, the rest of this briefing highlights some points about the key documents you will be able to access from the above web address.

Regulatory Framework

HE has set out the obligations on Registered Providers of social housing in England (‘RPs’) in its Regulatory Framework, the most recent version of which is the April 2015 updated April 2017. The gateway to the Regulatory Framework documents is here: https://www.gov.uk/government/collections/regulatory-framework-requirements

An almshouse charity which is an RP should be complying with these framework documents.[1]

You will see the Framework documents assume that all RPs have tenants who pay rent, which is not true of almshouse residents at common law. Therefore you need to substitute ‘resident’ for tenant, and ‘WMC’ for rent as you read through the Framework documents.

The Framework documents are divided into the so-called ‘Economic Standards’ and the ‘Consumer Standards’. Some of the obligations in the Consumer Standards relate to circumstances which have no good analogy in the almshouse world, eg in relation to residents swapping tenancies with each other.

Target Rent/Formula Rent

This part amplifies and updates the explanation of Formula Rent at paragraph 5.13 of Standards of Almshouse Management.  In this part we will refer to paragraphs of the following Framework documents:

As a Registered Provider, your charity is subject to the Formula Rent regime (previously known as Target Rent). The formula for Target/Formula Rent is based on:

  • The average earnings for the area compared to the national average
  • The number of bedrooms in the property
  • The value in January 1999
  • The national average housing association property value in January 1999.

The current market value of properties in the area is not relevant. The Equivalent Fair Rent is also irrelevant.

The short April 2015 Rent Standard is the Framework document which sets out the basic rules about levels of ‘rent’ which can be charged. The April 2015 Rent Standard Guidance amplifies the Rent Standard. When reading both those documents, bear in mind that:

  • All RPs provide ‘low cost rental accommodation’ for the purposes of s.69 Housing and Regeneration Act 2008 (‘HRA 2008’)
  • However, ‘low cost rental accommodation’ itself comprises either ‘social rent’ accommodation or the more expensive ‘Affordable Rent’. Your almshouse accommodation will be ‘social rent’, unless it was re-modelled or built within the last few years with the help of a grant from the HCA.

Para 2.2 of the Rent Standard gives the headline rules about levels of ‘rent’. The easier and more helpful read, however, is the April 2015 Rent Standard Guidance, in particular:

  • part 3 about ‘social rent’ accommodation
  • appendices 1 – 2b on the detail of how to calculate Target/Formula Rent for a particular social rent dwelling with a worked example.

In a nutshell, some years ago it was thought desirable that Registered Providers should be able to charge higher rents to ensure they remained financially viable, but not so much that they became unaffordable for social housing tenants. The government therefore came up with the concept of Target/Formula Rent and, to avoid residents facing steep rent increases, gave all RPs a ten year window within which to increase up to Target/Formula Rent. Unfortunately that window expired in 2012. The default now is that wherever your charity’s WMC was set at the end of that window, even if you had not yet climbed as high as your Target/Formula Rent, thereafter you were only allowed to increase by a certain percentage per year.  For the year starting April 2018, that percentage is CPI+1% which works out at 4% overall. (The CPI figure is taken from the September figure of the previous year).

As you will be aware, the Association obtained full exemption from the rule in the Welfare Reform Act 2016 that Registered Providers must actually reduce ‘rent’ by 1% a year for four years.

FAQS

Are you sure the charity is a Registered Provider? Our trustees have never applied for social housing grant.

Unfortunately the application may have been made decades ago by previous trustees and your charity is likely to have stayed on the register even if the application for grant was refused.  However, you can double-check by looking for your charity’s name in the HCA’s up to date list of Registered Providers, accessible at: https://www.gov.uk/government/publications/current-registered-providers-of-social-housing

The list will also tell you the year in which your charity became a Registered Provider.

We didn’t realise about Target Rent and we think we may sometimes have increased WMC by a little more than CPI + 1% per year. Should we worry?

In our experience, small almshouse charities in these circumstances are typically charging below Target Rent, sometimes significantly below. Any technical breach of the Rent Standard you may have committed is likely to be trivial. While we cannot guarantee what the RSH would do if they became aware of the facts in this FAQ, we know that they are keen to take a proportionate approach to regulation. We doubt they would take any action beyond asking the trustees for assurance that they now understood their obligations about levels of WMC.

How do we go about working out the Formula/Target Rent for our dwellings?

Simply ask a local property valuer to calculate it for you, directing them to the webpage above where they can find the detailed formula and worked example calculation. You will see the formula involves them valuing the dwellings at the value they would have been in January 1999 if they had been on the open market, instead of being owned by an almshouse charity.

We are now interested in applying to the HCA to cease being a Registered Provider. Can you help?

Yes. We have provided detailed, step-by-step guidance and advice in the form of a number of documents in the members’ login area of our website, each with ‘De-Registration Toolkit:
’ included in the title. Please start with the document called ‘De-Registration Toolkit: Start Here’

I can’t access the members’ login area and/or can’t remember my password

Any trustee and clerk of a member charity can register in his or her own right to access the Members’ Login area of our website and we would encourage everyone to do so. If you have not previously registered to access the Members’ Login area, or your login no longer seems to be working because you have not used it recently or cannot remember the password you chose, you need to apply to register (which is free provided your charity has paid its annual subscription to the Almshouse Association for the current year). Registration applications can take up to 3 working days to turn around due to the pattern of staff working days, but after that you should have no difficulty in accessing the documents in the Members’ Login area.

To apply to register, go to the following web address, click on ‘To Register’, then complete and submit the form which pops up:  http://www.almshouses.org

To complete the form:

  • you will need your Almshouse Association membership number beginning M
(not your registered charity number), which appears on the most recent subscription request from the Association.
  • you will also need to choose a password. Please remember the password you choose, because our system does not keep a record of it. If you forget it, you can always re-register but as explained above that can take a few working days to process.

© The Almshouse Association

Reviewed February 2018

[1] Surprisingly, a charity which is an RP counts as a ‘private registered provider’ for the purposes of the Framework, or more specifically a ‘private not-for-profit registered provider’. The contrast is with public bodies.