Until now, CHS Group has only let homes at social rents – these are the lowest level of rent that housing associations can charge. Many housing associations charge what are called ‘affordable rent’ on many of their homes; these are 10-40% higher than social rents in Cambridgeshire. Although, these higher rents have helped associations build many more new affordable homes.

Setting rents is always a balance between keeping rents affordable for tenants and getting enough income to be able to invest in our current homes and to build new ones. CHS has always been concerned that these higher affordable rents are too high for people in low paid work. For new affordable homes built from this autumn CHS will reluctantly have to start charging higher rents as otherwise we will not have the funds to buy land from developers for these new homes – although, this will not affect rents for existing homes. Our new rents will be at or below the Local Housing Allowance level.

Both types of rent will fall by 1% each April until 2020. After 2020, the Government has just announced that housing associations will be able to increase their rents by up to CPI (the rate of inflation) plus 1% – CPI was 3% in September 2017. In 2020 CHS will have to decide how much we will increase our rents.

Neither social nor affordable rents are good ways of ensuring rents are affordable. Both are set using a formula fixed by the government and are partly based on property prices or market rents. A proper affordable rent policy would link rents to tenants’ incomes in some way rather than property values. CHS has therefore teamed up with the Joseph Rowntree Foundation who is funding us to research this real affordable rent policy. A team from Cambridge University has just won a tender to carry out this work and we expect its report in the spring. Depending on their findings we may not be able to set rents as they suggest because we are constrained by the current regulations. If not, we will use the report to lobby government to enable us to set rents linked to tenants’ incomes rather than market house prices or market rents.