Large housing association hit with legal threat over ‘unlawful’ 20% rent hikes

However, this came as a shock to the residents, who understood that they were social housing tenants and therefore protected from large cost increases. PfP insists that the properties have “always been” market homes.

The tenants are now threatening legal action, and a pre-action letter has been sent to the landlord by Greater Manchester Law Centre, on behalf of one of the tenants, proposing a judicial review over the “unlawful” rent rises.

The letter, seen by Inside Housing, argues that the 20% rise is unlawful as it is above the cap of 2.7%, the amount by which social landlords are allowed to raise rent in 2025-26, based on the formula of Consumer Price Index (CPI) plus 1%.

According to the letter, this rise is in breach of PfP’s requirement as a social landlord to follow the Rent Standard set by the Regulator of Social Housing (RSH). It also claims that unlawful rent rises took place in the previous two years, with hikes of 12% and 11.1% – both above the 7% cap in place at the time.

The tenant referred to in the law centre’s letter is a pensioner who was originally a secure tenant with Oldham Council and swapped into a three-bed home on Gilderdale Close more than 20 years ago. 

She lives in an adapted property as she suffers from musculoskeletal impairments in both her knees and her spine and can no longer walk unaided, the document explains. 

According to the legal letter, she has an assured tenancy for accommodation that meets the ‘low-cost rent accommodation’ definition set out in the Housing and Regeneration Act 2008.

The tenant’s agreement is between Britnor Properties, the firm that built the homes in 1992, and North British Housing Association, the former trading name of PfP.

Sarah Howarth-Flanagan, who has lived in a three-bed house on Gilderdale Close with her two sons since 2013, said: “When the letter said we will be putting rents up to market rates this rang alarm bells.”

She added: “We aren’t private renters.”

After receiving Touchstone’s letter, she immediately queried why costs were rising to market value and received an email response explaining that the houses were part of PfP’s private investment portfolio, and were built with no government funding.

But the trainee teacher, who moved from foster care into hostel accommodation and then housing association flats, said she has always been a social tenant. “I moved in as social housing, I always believed it was social housing. North British Housing Association would not even have had investment homes when the houses were built.”

Ms Howarth-Flanagan fears that older residents could have to move out of their homes, given that some are living in homes alone that have been adapted for disabilities.

“If they are now private rent tenants, their housing benefit and pensions will only entitle them to £470 a month, which is the [Local Housing Allowance] rate for a single occupancy. How are they going to pay the remaining £600 towards their rent?”

“They are going to flush everyone out with the higher rent rises, and it is immoral,” she said, adding: “I’ve always been in social housing because I believed it was secure.”

The tenants have won the backing of local politicians such as Marc Hince, ward councillor and leader of Shaw and Oldham Town Council, who describes the situation as a “major injustice”. He has written to PfP’s chief executive Greg Reed urging him to take a “socially moral approach”.

A PfP spokesperson said: “These homes have always been market rent. We have always worked hard to keep rents as low as possible.

“During the COVID-19 pandemic and at the height of the cost of living crisis last year we kept rent increases to a minimum to ensure customers were not adversely affected by the other financial pressures that were outside our control.”

However it added that in light of “ongoing conversations” with its customers in Shaw, the landlord intends to undertake a “full review” of the tenancy agreements and how these properties have been managed. 

“Whilst the review is undertaken customers should continue to pay their rent at the new rate. Following completion of our review, if any refunds are due, we will look to credit customers the amount of any overpayment they may have paid.”