Welfare Reform and Work Act April 2016
The Welfare Reform and Work Act came into force in April 2016 and the headline change was that Social Rents would be reduced by 1% for the next 4 years, which was great news! However, we had renters coming in to see us with their bills which had gone up. So we checked their bills and it became clear that the service charges in some cases had gone up to cover the reduction in rents. We felt this was unfair so we set about doing some research into this.
The Act does state that the 1% annual reduction only applies to rent not to service charges in social rent properties, it’s only in ‘affordable rent properties’ where the service charge is combined with the rent that the 1% applies to the whole sum.
We looked across our main social housing suppliers in Westminster: City Homes West, Octavia, L&Q and Notting Hill Housing Trust to find out what adjustments they had made to their bills. A short summary was distributed to all of our advisers so that they had the information to be able to discuss this with clients. As part of this research we unearthed a dual system of service charges, one set, one variable, which leaves clients vulnerable to open ended bills. We will be monitoring this during the coming year to see how Westminster renters are being affected.