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Every year, we review your rent, and increase it in line with the Government’s rent setting rules.

This section explains how we calculate your rent. Please note it does not deal with the service charge part of the rent – this is covered in a separate leaflet ‘Your Service Charge Explained’, available from our Customer Services Centre. If after reading this leaflet you have further questions about how your rent is calculated, please telephone our Customer Services Centre.

1. Target Rent - Since 2002, every Hexagon property has been given a target rent. This is the correct rent level for your home determined by the Government rules and it is based on
the number of bedrooms you have
the value of your home, compared to the value of the average ‘social housing’ home (some areas are much more expensive than others, and this is reflected in the rent)
whether or not you have a private garden
average male earnings in the London area (because average earnings vary across the country, rents are amended to take this into account).

Note – all these figures were calculated in 1999. They are increased in line with inflation each year.

2. If you moved into your current Hexagon home after April 2002, go straight to Point 5. If you moved in before April 2002, go to Point 2.

Before April 2002, Hexagon rents were calculated in different ways, so the actual rent you were paying may have been higher or lower than the target rent.

For example
most target rents in Southwark borough were higher than the actual rents we were charging
most target rents in Bexley borough were lower than the actual rents we were charging

3. The Government’s Rent Convergence rules mean that we have to move your actual rent to meet your target rent by no later than the year 2012. To protect you from large increases if your rent is below the target rent for your home, and to protect Hexagon from sudden loss of rental income if your rent is more than the target rent, there are limits on the amount your rent can go up (or down) in one year. Every year we will increase your rent by the general rate of inflation, plus 1/2 %. So if the inflation rate is 2.7%, we will increase rents by 3.2% (2.7 + 0.5 = 3.2). We will then add or take off up to £2 to get your actual rent closer to your target rent. Please see more detailed examples at the end.

Note – target rents increase every year, in line with inflation plus 1/2 %

4. Once your rent reaches target rent you will be subject to increases of inflation plus 1/2 % only.

5. If you have moved into your current home since April 2002 you are already paying the target rent for your home. Your rent will be increased by inflation plus 1/2 % (Unless your home has three bedrooms or more - if it has, please see Point 6)

6. If your home has three bedrooms or more there have been some very recent (2005) changes to the Government’s rules. These changes mean that your target rent has been recalculated, and increased. This means that if your actual rent was already equal to your target rent, they will no longer be equal, and the rent setting rules in Point 3 will apply to you if your actual rent was lower than your target rent, it will take longer for you to reach target rent than it would have done before this change. This has been done to help Housing Associations to be able to build more larger sized homes for families, which are in short supply.

Example 1 – where the current rent is less than the target rent Mrs Patel’s current rent is £75 per week. The target rent for her property is £85 per week, and increases by 3.2% to £87.72  We increase her rent by inflation plus 1/2 %. £75+3.2% = £77.40 (still less than the target) We then add a further £2. £77.40 + £2 = £79.40 (still less than the target, but getting closer)

Example 2 – where the current rent is more than the target rent Mr Brown’s current rent is £80 per week. The target rent for his property is £75 per week, and increases by 3.2% to £77.40 We increase his rent by inflation plus 1/2 %. £80 + 3.2% = £82.56 We then reduce the rent by £2 £82.56 - £2 = £80.56 (still more than the target rent, but the gap is getting smaller)

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