Your rent, explained

How does Connect spend your rent? Director of Finance, Guy Millichamp, explains.

How is rent calculated?

As a registered social landlord, we have to calculate initial rents using a formula that the government publishes.

Each year afterwards, rent can only go up in line with inflation in April, based on a formula also set by the government. The formula is: the Consumer Price Index (CPI) for the previous September, plus one percent. Rent can’t go up if it was already raised within the last 12 months.

Why does it go up by an extra 1%?

We are doing three things with this extra money:

• We are all still impacted by the cost-of-living crisis, and we know that some of our customers are struggling. We want to invest more in providing support where it is needed.
• Our costs are going up by more than just CPI inflation, and if our income doesn’t go up at the same rate then we’ll need to cut back on the services that we provide.
• The government has set out their ambition for growth, and building new homes will help that goal. We need more affordable housing, and adding a little to our rents will allow us to invest a bit more in building new homes

What about the service charge?

If you have a service charge included in your rent, it’s calculated separately and doesn’t fall under the government’s rent setting rules. This does mean the overall change in your rent and service charge could be more or less than CPI + 1%.

How does Connect spend the money it gets from rent?

Most of the money we receive through rents is used to look after your home, whether doing regular repairs, replacing key elements (e.g. kitchens) or carrying out building safety checks. We employ Community Housing Officers and other people who deal with every aspect of our landlord service to make sure that your tenancy is working well and will last. A small part of the rent is used towards building new homes to meet the housing crisis, but most of the cost comes from bank loans and government grants.

What should someone do if they fall behind on rent?

If you’re struggling to pay your rent, please get in touch. Our free Money Matters service has expert advisers who can support you with benefits, job applications, and finding other financial help you might be entitled to.

For more information about our Money Matters service, call 0300 5000 600 or visit our webpage.