FAQs for our Shared Ownership Cost of Living Credit 2024
9 February 2024
At Legal & General Affordable Homes, our customers are at the heart of everything we do which is why we’ve created our Shared Ownership Cost of Living Hub to answer any questions you may have about your costs. Full of information and resources to help you as a Shared Owner, we want to support you in every way we can.
Across the country, costs are increasing and we’re all feeling the impact. We want you to know that we’re here to support you in a variety of ways. Have a read of our FAQs and get in touch with your Management Provider if you have any further questions.
How much is my rent going to increase?
The rent you pay on the unowned share of your home will increase by 9.4% from 1st April 2024.
Under the terms of your lease your net rent can increase each year by Retail Price Index (RPI) plus 0.5%.
The RPI used is the one published by the Office of National Statistics in the September prior to the increase, so for this year, that would be from September 2023.
The RPI figure published in September 2023 was 8.9%.
I received a voluntary monthly rent credit last year, what happens now?
If you had a rent increase in April 2023, you will have benefitted from a voluntary monthly rent credit to reduce your rent payable for the year April 2023 to March 2024. This credit was applied to all shared owners to acknowledge the very high RPI figure that would have led to a rent increase of 13.1%. The result of the credit meant that the rent you paid was limited to a 7% increase.
We know that the cost of living remains a challenge for many people and we will continue to support customers for the coming year. We will increase rents by 9.4% but we will use the reduced 2023/24 rent as a start point for this calculation.
As an example, in 2023/24 we discounted the increase in your rent via a credit to your account as mentioned above. So, if your rent was £100 per month in March 2023, we applied a 13.1% uplift on 1st April 2023. This increased your rent to £113.10.
At the same time we also applied a credit to your account to help with the cost of the increased rent. This meant that what you actually paid was £107 per month from April 2023 to March 2024.
From April 2024, Legal & General Affordable Homes has the option to remove this credit. This means that your rent would revert to £113.10 and then we would apply a 9.4% increase, totaling £123.73. However, we are conscious that the squeeze on household costs is still very real and so we have decided that we will apply a credit for a second year for those households who received a discount in 2023.
Whilst we will uplift your underlying rent by 9.4%, in the example above that would be from £113.10 to £123.73, we will then apply a credit. This would mean you will only be required to pay £117.06 per month. This figure is arrived at by applying a credit that results in your 2024/25 rent being equivalent to the amount we would charge if your rent was only increased from the amount you actually paid in 2023 after our credit was applied.
This calculation will be automatically applied and you do not need to do anything.
I did not receive a voluntary monthly rent credit last year, what happens now?
If you completed the purchase of your home after 1st January 2023, the April 2024 rent increase will be your first annual rent review and therefore you have not been receiving the monthly rent credit.
Your new rent will be calculated based on the rent you are currently paying plus 9.4%
What about the Shared Ownership Rent Reform?
In October 2023 the Government published the Shared Ownership rents reform which explained that the index of inflation for shared ownership rents would be changing from RPI to CPI.
CPI is the index used for rented tenants rent increases, so the change would align shared owners and rented customers. The publication excluded existing shared owners and future shared owners where planning permission and funding was already agreed. Due to this, all shared owners who are included in the April 2024 rent increase will continue to see RPI as the inflation index for rent increases.
Will my service charges change in April 2024?
Yes, your service charges will change as normal in April 2024. Service charges are calculated based on the cost of delivering services and any repairs beyond those specifically for your house or flat, therefore the change is not directly linked to inflation in most cases.
You will be notified of the changes to your rent and service charge via a letter from your Managing Provider. If you have any questions, please get in touch. Any changes will come into effect from 1st April 2024.