A proposed definition of intermediate market rent needs expanding or landlords could risk breaching new standards, says Jonathan Cox
The Tenant Services Authority, as part of the revisions to the regulatory framework, is proposing a specific rent standard, with an associated rent standard guidance document.
It is intended to provide greater clarity on what is expected of social landlords, including how to deal with intermediate market rents.
The proposed guidance defines IMR as:
- the level of rent being above a social rent and below a market rent;
- the properties being funded with or without grant/subsidy; and
- being provided for (but not restricted to) key workers.
None of this is of interest to landlords that offer IMR through non-registered provider subsidiaries, as the rent standard won’t apply to that subsidiary. But, for those which provide IMR directly, the detail of the proposed guidance is very important, not least because there is a renewed focus on IMR by landlords that might not have been successful in their bids under the affordable homes programme.
The wide definition suggests that landlords which develop homes without grant could get all of the benefit of affordable rents by labelling their new scheme IMR. If this is the TSA’s intention, then fine; but if not there needs to be clarity on when IMR can be charged, which could take into account factors such as planning restrictions, local authority approval, or Homes and Communities Agency approval.
This enlarged definition would give landlords developing homes to let at IMR the security of knowing they are not breaching the new rent standard.
Jonathan Cox is at partner at Anthony Collins Solicitors LLP