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Rent and service charges FAQs

Rents and Service Charges FAQs 2022 - 2023

What is my rent used for?

Your rent is used to manage, maintain and improve your home, strengthen your community and help fund the building of new homes.

How is my rent charged?

Your rent is charged on a weekly basis and is due weekly in advance.

This year payments are due from 4 April 2022 to 2 April 2023

If you choose to pay fortnightly, your payment will need to cover the current week and week following. You can also pay monthly in advance. We check your account at the end of each week.

What are the dates for the rent year?

Our rent year runs from4 April 2022 to 2 April 2023.

There will be 52 weeks during this period.

How many rent payments are there in the year?

If you pay weekly, we ask you to pay your rent for the whole year over 50 weeks so that you will have two rent-free weeks.

If you pay your rent by monthly Direct Debit your rent for the year is paid in 12 equal instalments.

However, you pay, the total for the year will be the same.

When are the rent-free weeks?

The ‘rent-free weeks’ will be the weeks starting 26 December 2022 and  27 March 2023.

Will I still get my free week if my rent account is in arrears?

If you are in arrears, have a court order or have another arrangement in place to clear arrears, you will still be expected to make payments during the rent-free weeks.

When a property is first let, how does PCH set the rent?

When PCH sets the rent for your home it will either be set at a “Social Rent” or at an “Affordable Rent”. Affordable rents are set higher than social rents.

What is a social rent?

A social rent is based on a Government formula which takes into account the number of bedrooms together with local wages and the open market value of the property.

PCH social rents are usually about 40% cheaper than renting the same property from a private landlord.

What is an affordable rent?

An affordable rent is higher than social rent but is still cheaper than renting from a private landlord by around 20%.

We set our affordable rents using Government guidance which says they can be charged at up to 80% of an equivalent property let by a landlord in the private market (inclusive of any service charge). Rents on properties developed since 2010 are charged at 80% of market rent but in some cases are capped so the rent does not exceed the local housing allowance. 

Affordable rents on older properties are currently charged at around 70% of the equivalent market rent from April 2022. The premium above social rent is used to support building new homes. Over the last 2 years we have been steadily reducing this type of affordable rent as the amount of money the Government has allowed us to raise from the extra rent to build new homes is coming to an end. 

By April 2023 this process will be complete and all affordable rents on our older properties developed before 2010 will move to being a lower social rent instead. 

Why is my rent changing?

Like all social landlords, we follow the government’s guidelines relating to rents that we charge each year. 

Our “social rents” are amongst the lowest in the country and although any increase is difficult, PCH makes sure they remain within the reach of local people.

From April 2022 we will be increasing most rents by 4.1% following the government’s guidelines. This is based on inflation at 3.1% (using the September 2021 Consumer Price Index) plus 1%. This increase will apply to most of our homes including newly built homes.

We know that any changes in your finances will be difficult. To make sure our homes are more affordable, this year we have taken the decision to limit all our general needs rents, for both affordable and social rents, to LHA rates (Local Housing Allowance).

Your rent helps us to keep homes in good repair, make necessary improvements and build more affordable homes, so that we can meet the needs of local people both now and in the future. We know that your home is important to you, and we make sure that your rent goes back into providing good quality affordable housing and supporting the communities where we work.

Over the last 10 years most of our older homes built before 2010 have been relet at an ‘affordable rent’.  A small proportion of this rent contributes money to help support PCH in building much needed new homes for rent. This charge includes both the rent and service charges as a single combined charge.

For the last 2 years we have been steadily reducing this type of affordable rent as the amount of money the Government has allowed us to raise from the rent to build new homes is coming to an end.  From April 2022 we will therefore be reducing this type of affordable rent by up to 7%.  If this reduction, on any specific home, reduces the rent to the same level as if it were let at a social rent plus service charges then we will charge the social rent plus service charges.

Most residents being charged an affordable rent on an older home will see a 7% reduction, some will see a smaller reduction and a small number will see a small increase.  The change in your rent will depend on how it compares with the equivalent social rent for the property.

From April next year (2023) the process for moving this type of affordable rent back to social rent will be complete, and all affordable rents on our older properties developed before 2010 will have moved to being a lower social rent instead.  Subject to PCH Board approval, from April 2023 rents will then increase in line with Government guidance.  Service charges will be charged separately from the rent and can go up or down depending on the actual costs. Specific details of the changes to rents will be explained in individual rent notification letters due to be sent to residents at the end of February 2022.

You have mentioned capping general rents at the local housing allowance – what is this?

We know that the rent for some of our newer properties is higher than a lot of people can afford in the current economic climate.  We want to make our homes more affordable so have decided to limit our general needs rents, so they are no higher than the Local Housing Allowance (the LHA).  

The LHA is set by the Government to limit the maximum amount people renting from a private landlord can claim in Housing Benefit or Universal Credit - but as a social housing registered landlord we are simply using this as a measure of affordability.  The decision to use the LHA as a cap on rents will be reviewed each year once we know the level of LHA.

You have told me my rent is changing from an affordable rent to a social rent, what does this mean?

Affordable rents are higher than the equivalent social rent for the property.  Over the last 2 years we have been steadily reducing this type of affordable rent as the amount of money the Government has allowed us to raise from the rent to build new homes is coming to an end.  We also want to bring rents more in line with the equivalent social rent for the property which is lower. 

Your new rent plus service charges is now at the same level as if it were let at a social rent plus service charges, so we will be charging you this from April 2022. Now that you have been moved onto a Social Rent, you should note that from next year (April 2023), your rent will likely increase within the guidance set by the Government, this will be subject to approval by the PCH board. 

In addition, Service charges will be charged separately from the rent from now on, this means from next year (April 2023) charges could go up or down depending on the actual costs.

What if I fall behind with my rent or service charges?

We understand that you might be worried about what the Covid-19 virus outbreak means for your income, home, and your ability to pay your bills.

Residents still need to continue paying their rent, but if you’re struggling, we have a range of help available for you. If your circumstances haven’t changed, please just carry on paying your rent as normal.

But if you’re struggling, please let us know as soon as possible. Our Incomes and Financial Inclusion Team will help you with an alternative agreement about paying your rent.

The sooner we know, the sooner we can find a solution for you, so if you need help, please contact the Income Recovery and Financial Inclusion Team as soon as possible on Freephone 0800 028 0350 or (01752) 388121.

Money worries, especially debt, can have longstanding effects on your health, as well as having wider implications for you and your family. We work with several agencies that can help you resolve your problems in complete confidence.

Most people struggle from time to time to make ends meet and life can throw up unforeseen costs that result in you being short of money. There are however some key indications that you may have a debt problem. Are you:

  • Having trouble paying your rent?
  • Having to borrow money to pay day to day living expenses?
  • Borrowing to meet outstanding debt repayments?
  • Struggling to meet minimum credit card payments?

Last year we supported hundreds of people to resolve their debt problems - if you are worrying about money and paying your rent, please contact us as soon as possible.

How can I get help with my rent and service charges?

If you have a low income and do not get any help to pay your rent at present, you may be entitled to

Housing Benefit or Universal Credit.

If you are of pension age and would like to make an application for Housing Benefit you can do this online at https://www.plymouth.gov.uk/benefitsandgrants/housingbenefit or by contacting Plymouth City Council  on 01752 668000 or by speaking to our Income Recovery and Financial Inclusion Team on Freephone 0800 028 0350 or (01752) 388121.

If you are of working age you will need to apply for Universal Credit which replaces a range of working age benefits and Tax Credits to simplify the system and make work pay. Universal Credit has been introduced in Plymouth and may apply to you. To find out if you can make a claim, and for the latest information, visit, www.gov.uk/univer­sal-credit speak to our Income Recovery and Financial Inclusion Team on Freephone 0800 028 0350 or (01752) 388121.

I am receiving Housing Benefit. Do I need to reapply?

If you receive housing benefit now, you do not need to reapply.

You will receive a letter from the Housing Benefit Office that will tell you your new benefit entitlement and the revised amount you should pay each week.

Before receiving Universal Credit.

If you start claiming Universal Credit there will be a delay of around a month before your regular payments arrive, known as the waiting period - as Universal Credit is paid monthly in arrears. We advise keeping 4 weeks rent credit on your rent account to provide a financial cushion.

I am receiving Universal Credit. Do I need to reapply?

If you receive Universal Credit and there are any changes to your rent or service charges you need to report this change to the Department of Work and Pensions by logging onto your Universal Credit journal.

You can log onto your Universal Credit journal and advise of any change in your rent or service charges. This must be done before the end of your assessment period in which the change has occurred.

Please report this change to the DWP on, or as soon after the 4th April 2022 as possible.

Paying By Direct Debit

Direct Debit is the best way to pay your rent.

Direct Debit is safe and easy which is why many our residents now choose to pay this way. If you set up a Direct Debit you are protected by the Direct Debit Guarantee. You can pay weekly, fortnightly, four weekly or monthly on any date you choose.

These payments should be made in advance in line with the terms of your tenancy agreement.

For more information or to set up a Direct Debit, contact us on Freephone 0800 028 0350 or (01752) 388121.

MyPCH

MyPCH is the online portal that puts you in control. If you want to check your rent account, you can do it through your MyPCH account. With MyPCH, you can also report repairs, update your contact details and make a comment or complaint online, 24 hours a day from your computer, tablet or phone.

Registering for a MyPCH account is easy. Just go to: https://mypch.plymouthcommunityhomes.co.uk/

Frequently asked questions about Service Charges

What is a service charge?

A service charge is a charge made for services we provide to your block or home that are not covered by the rent such as caretaking and communal lighting. It covers communal services and, in some cases, individual services such as heating, hot water and servicing home adaptations. 

We operate a variable service charge system. This means we will only charge you the actual amount it costs us for the services you receive. We aim to provide services in the most reasonable and cost-effective way and to a standard acceptable to you, our residents. The same charges are made to all homes and residents who receive or benefit from them.

Why are you sending out a service charge statement?

The service charge statement shows you the difference between the actual costs, compared to what we originally estimated for the period October 2020 to September 2021. This period is called the ‘look back period’.

We estimate how much your service charge will be for the following 12 months. By law, if we make this charge, we must make an adjustment when we know how much the services actually cost. We want to be open and transparent with you about these costs and the adjustment.

The estimate might be different from the actual cost due to things like changes in inflation or different products being used to provide services. Once we know the actual cost, we either add or deduct the difference from the estimated cost of the services for the next year (starting April 2022) to give your new service charge.

What is the ‘look back period’ and how does this work?

Each year we will estimate the sum we are likely to spend in providing services to you over the coming year. That will be the service charge we will ask you to pay for the year.

The estimate will run from 1st April - 31st March.

At the same time, we will work out how much we have actually spent on providing services for you in the previous period.

The previous period we look back on covers 1st October - 30th September.

The difference between what you have paid for this period and the actual cost of the services will then be made as an adjustment to what we will ask you to pay for the following April to March.

If we have overcharged you, we will reduce your service charge for the coming year. If we have undercharged you, we will increase your service charge.

We plan to send your statement (covering October - September) and your bill for the following year (covering April - March) at the same time – this will normally be in February or March along with your rent letter.

All annual charges will start in April unless a new service is introduced during the year.

The diagram below illustrates this.

 

Is there any reduction in my service charges due to Covid?

PCH are committed to only charging residents for the services provided, in line with the variable service charge system we operate, and our Service Charge Policy and Strategy.

At the outset of the Covid pandemic several services were significantly reduced as we took measures in line with government guidance to protect our residents and staff. During the October 2020 to September 2021 look back period services in the main have returned to normal delivery, however where there are exceptions such as common rooms remaining closed, charges have been reduced.

How does the affordability cap work?

PCH has an affordability cap for some tenants who pay service charges.

This cap only applies to you if you were a tenant before April 2011and is due to the introduction of variable charges. We have tried to keep this information as clear as possible but if you have questions then please contact your Housing Officer.

If this applies to you, we have adjusted the service charge so you will not pay any more than what was your ongoing charge at 2011, uplifted by inflation +1% +50p for each year since April 2011. The cap will be applied until all properties in your block pay the same service charge, after which the cap will no longer apply.

Why should I pay for a lift, laundry or door entry control in my block if I don’t use them?

If you live in a block of flats with communal services, everyone in the block has access to the facilities. Whether you choose to use it or not, all residents in the block share the cost of communal services and the cost is shared between all properties in the Block, hence reducing the cost to you, the resident.

I am in a block and I know someone in another block who pays a different amount for the same service. Why is this?

Each block, however similar, will have costs that can vary. For example, one block may have more flats than another, so the costs are spread among more residents. This makes the cost per resident lower. Some blocks have more grounds to maintain or larger courtyards to clean so the costs may be higher.

What is a management charge in my service charges?

There is a cost in running and managing the services provided to your block. These costs are covered by the management charge.

This includes calculating the charges and adjustments, managing the contracts, making payments to our providers, providing information and consulting with residents.

The management charge is based on recovering the total overhead costs of managing the services and equates to 16p per service per week, and will not be more than 15% of the total cost of your service charges

Will I get a refund if I am owed money for the period October 2020 to September 2021?

If we overestimated your service charge, any extra money you have paid will be taken into account by reducing your service charge for the year starting from April 2022.

Information about benefits

Bedroom Tax

If you are below pensionable age, receive Housing Benefit or Universal Credit and you have one or more spare bedrooms, the amount you receive will be reduced. You need to pay the difference, commonly known as the Bedroom Tax (or spare room subsidy), yourself. If you are having difficulty paying this, please contact us as soon as possible and we will do our best to help you and provide advice.

We are able to help anyone who wants to move to a smaller home, and we have already helped many residents move to accommodation that suits their needs. If you would like to move to a smaller home, please contact us.

Universal Credit

Universal Credit was introduced in Plymouth in 2016 as part of the national roll out by government. Universal Credit is the new single payment for people who are looking for work or on a low income. It replaces a range of working-age benefits including Job Seekers Allowance, Income Support, Employment and Support Allowance, Child Tax Credits, Working Tax Credits and Housing Benefit with a single calendar monthly payment.

If you currently receive Housing Benefit, this is paid directly to us as your landlord. Under Universal Credit, this will be paid to you with all your other benefits, and you will then need to pay us your rent.

We realise that this is a big change, but we will do everything we can to make this as easy as possible for you.

We contact people who we think may be affected to see if there is anything that they are concerned about or if they need any additional support.

If we speak to you about Universal Credit, we will need to ask you a lot of questions about your income, your outgoings and any debts you have – this information will be held in complete confidence. It is important that you are honest with us so that we can give you the right advice and help if you need it.

If you would like to find out more about Universal Credit and how it may affect you, contact our Income Recovery and Financial Inclusion Team on 0800 028 0350.

Benefit Cap

There is a limit in the total amount of welfare benefits that people of a working age can receive – this is called the Benefit Cap.

The Benefit Cap is £20,000. There are exemptions if you are in receipt of Personal Independence Payment / Disability Living Allowance/Support Group Employment and Support Allowance, Industrial Injuries Benefit, War Disablement Pensions, War Widow/Widowers benefits or if you work enough hours to get Working Tax Credit.

If you have any queries concerning the Benefit Cap and how it may affect you, please call the Income Recovery & Financial Inclusion Team on 0800 028 0350 or (01752) 388121