Welfare Reform and Work Act 2016

Tenancy of affordable rent housing

3 (1) This paragraph applies in relation to a tenant of social housing in England if—

(a) the tenancy begins after the beginning of 8 July 2015, and

(b) the accommodation is affordable rent housing (see paragraph 4).

(2) If the tenancy begins before or at the beginning of the first relevant year, the registered provider must secure that the maximum amount of rent payable to the registered provider by the tenant in respect of the first relevant year is the higher of—

(a) the amount found by—

(i) determining the rate of the market rent for that social housing when the tenancy begins, and

(ii) determining the amount that is 80% of the amount that would be payable in respect of a year if that rate had applied during the year, and

(b) the amount that would be payable in respect of the first relevant year if the tenant were paying rent at the social rent rate.

(3) If the tenancy begins after the beginning of the first relevant year, the registered provider must secure that—

(a) the maximum amount of rent payable to the registered provider by the tenant in respect of the part of the relevant year falling after the tenancy begins, where the tenancy begins after part of a relevant year has elapsed, or

(b) the maximum amount of rent payable to the registered provider by the tenant in respect of the relevant year, where the tenancy begins at the beginning of a relevant year,

is the higher of the amounts described in sub-paragraph (4).

(4) The amounts referred to in sub-paragraph (3) are—

(a) the amount found by—

(i) determining the rate of the market rent for that social housing when the tenancy begins,

(ii) determining the amount that is 80% of the amount that would be payable in respect of a year if that rate had applied during the year, and

(iii) (if necessary) reducing that amount in proportion to the part of that relevant year that elapsed before the tenancy begins, and

(b) the amount that would be payable in respect of the period in question if the tenant were paying rent at the social rent rate.

(5) If the tenancy begins after the beginning of the first relevant year and not at the beginning of the second or third relevant year, the registered provider must secure that the maximum amount of rent payable to the registered provider by the tenant in respect of the relevant year following the one in which the tenancy begins is the higher of—

(a) the amount that would be found under sub-paragraph (4)(a) if sub-paragraph (4)(a)(iii) were disregarded, and

(b) the amount that would be found under sub-paragraph (4)(b) if the period in question were the whole of the relevant year in which the tenancy begins,

reduced by 1%.

(6) If—

(a) the tenancy comes to an end after part of a relevant year to which sub-paragraph (2), (3) or (5) applies has elapsed, or

(b) sub-paragraph (2), (3) or (5) ceases to apply in relation to the tenancy after part of the relevant year in question has elapsed,

sub-paragraph (2), (3) or (5) has effect in relation to the part of the relevant year falling before that time with a proportionate reduction in the maximum amount of rent payable to the registered provider by the tenant.

(7) The market rent is to be determined using a RICS valuation method.