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Welsh housing association to introduce living rent based on JRF model
A 10,000-home housing association in South Wales is to introduce a new living rent model across its stock, based on a formula calculated by the Joseph Rowntree Foundation (JRF).
Trivallis, which was formed in 2007 following a stock transfer from Rhondda Cynon Taff County Borough Council, hopes to begin rolling the policy out across its general needs and sheltered homes from April 2019 pending board approval.
The move follows Trivallis undertaking a review of its rents which identified that many of its one-bedroom homes were unaffordable according to the JRF criteria, while most three-beds were well below the affordability threshold.
In some areas, the association’s rents for one and two-bedroom flats were higher than those in the private rented sector.
The JRF, a social policy research charity, argues that rent is affordable when it takes up no more than 28% of a household’s net income.
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Trivallis has adjusted the model for its own stock, based on 28% of net income for the lowest quartile of households and tweaked it to take into account factors such as different property sizes and variations in income across geographical areas.
It said it has consulted with 2,400 tenants while developing the new model, as well as holding focus groups with staff and other stakeholders.
“At the moment Welsh Government are starting to talk much more about affordability and asking people to have a think about their rents generally, so it was really good timing for a review and what that means for us,” said Lynda Clark, finance director at Trivallis.
“The modelling [against our business plan] is the key thing for us now – we’ve got the green light from our tenants and we’re happy that we have demonstrated affordability.”
Trivallis’ rents currently sit below the mid-level of the rent envelope set by the Welsh Government, which social landlords’ portfolios must fall within – meaning it has room to increase many of its rents.
New tenants in homes where the Trivallis living rent will be higher than current levels will be charged the new rate straight away after the roll out, while the association plans to increase existing tenants’ rents based on local three-year wage inflation after the current Welsh Government rent settlement ends in 2020.
For homes where rents will reduce – typically one-bedroom homes – rates will be frozen until income levels catch up to meet the JRF affordability criteria.
Trivallis is also carrying out an audit of its service charges structure, with a review to start in January.
