Target rents review management overview
The target rent for a property is calculated using a formula for rent restructuring and is derived from the Government's vision for all social landlords to use the same method for working out rent. Once the target rent for a property has been calculated, increases are set such that the amount paid by tenants converges towards the target value - referred to as rent convergence. In general terms, existing tenants are moving towards their target rent through annual increments; new tenants pay the target rent when they move in. The specific formula used to derive the target rent is based on a number of key factors, all configured within Civica Cx Housing by the end user:
The foundation on which target rent is calculated is that 30% should be based on relative property values and 70% on relative local earnings. A bedroom factor is also applied such that, other factors being equal, smaller properties attract lower rents, with the added control of a rent cap to mitigate significant regional variations. Target rent reviews are conducted through the creation of rent review models, with review date boundaries defined to ensure that only those assets with a matching 'next review date' are included. A different review model must be configured for each separate company within the housing organisation, but additional models can also be maintained to capture different asset stock. The calculated results of a target rent review model can be generated at any time, providing valuable data on the convergence progress. The end user also has complete control over when these target rent values are applied to the live assets, thus becoming the new standard rent.
Separate help articles have been created for each key aspect of target rents review management, including: