What is the CAP?
Every year, your monthly rent is adjusted to take into account a rise in inflation. But on top of this rent increase, some tenants pay a CAP of up to £10 every month.
Find out what the CAP is and why you might be paying it...
Why am I charged a CAP? The short answer is that your rent is lower than the rent we charge other tenants for the same type of property.
This means that... when two tenants pay different rents for the same property type, we need to bring one tenant up to the target rent.
How the CAP works
If your rent is too low, the CAP is added to your monthly payment in order to gradually increase your rent until it reaches target. The CAP phases in this change over a number of years, rather than adding on a higher monthly cost all at once. This is how it works:
Find out more by downloading our leaflet What is the CAP?
How your rent is set
If you're paying a £10 CAP you will be doing so until you reach your target rent. But how do we decide what this target rent should be?
The target rent is determined by our Rent Setting Policy. The policy sets out what we need to consider when deciding how much to charge for all our different properties and ensures that:
- we receive enough income from rents to allow us to continue to look after and maintain your property.
- we have money to allow us to carry out planned improvements and repairs.
- we are able to build and develop new properties.
- our rents are affordable and comparable with the rents of other local social landlords.
If you were a tenant with us in 2014, you may remember being consulted regarding a new Rent Setting Policy. As a result of this consultation some rents were increased and a new rent structure was introduced.
What you said in 2014
When we consulted with tenants in 2014, 85% agreed that similar properties should have similar rents. This means that most tenants felt that properties of the same size and type should have equal rents. But it was accepted that, while two tenants might live in a two bedroom terraced house, one may have more amenities than the other - such as a garden, or a parking space.
Tenants were asked to consider these extra amenities such as a garden, a garage, a driveway, a private entrance - and how this would affect rents.
During the consultation, it was agreed that there should be a ‘base rent’ - a rent which all tenants would pay for a property type. In addition to the base rent, any extra amenities would be taken into account to determine the rent charged.
New Rent Structure
The Association’s Board of Management approved the principles of the new rent structure model, incorporating the views from the tenant consultation. The structure is based on rent points for:
- property size (number of bedrooms )
- the number of bed spaces (i.e. single bedrooms have one bed space while a double has 2 bed spaces)
- property type, for example terraced house, flat – common entry, flat – private entry
- heating type
- amenities, for example curtilage parking, which is a space within your garden to park your car
- energy efficiency
The points are then given a monetary value and added to the base rent, in order to arrive at the individual rent for each property. For a full list of rent points, see page 5 and 6 of our Rent Setting Policy.
In addition to your rent, you might also be paying service charges. Service charges are the costs for recurring services that are not covered within your rent. If you live in a block of flats, for instance, these can include regular stair cleaning and/or the cost of stair lighting.
Implementation of the CAP
After consideration of feedback from all tenants who responded to the 2014 consultation we phase in the changes over time with a CAP on the increases for tenants whose properties will result in a higher rent charge. Other properties will have their rents frozen until they reach their target rent.
find out more
Download our leaflet What is the CAP?
ask us
If you have any questions about the cap or wish to discuss how it affects your monthly payments, we would be happy to talk to you. Give us a call on 01506 439 291