Living rent - what you need to know
Hackney Council has announced plans for new homes at a living rent – which could see eligible renters save nearly £10,000 a year on the average two-bedroom flat and help them to build up a deposit to buy their first home.
It's all part of our #BetterRenting campaign to improve standards and affordability for private renters in Hackney.
Here are the 10 things you need to know:
What is a living rent?
Living rent is a new type of genuinely affordable housing for people on middle incomes that wouldn’t normally qualify for social housing.
Rents are calculated based on a third of average local incomes, meaning they will be lower than the market rent a private landlord would charge.
Living rent homes are aimed at private renters who are struggling to save for a deposit and want to build up savings to buy a home.
How much rent will I pay for a living rent home?
Rent levels have not yet been set but are calculated based on a third of average local incomes, and adjusted for the number of bedrooms in each home. For a two-bedroom home, this could be around £1,000 per month. The average equivalent market rent in Hackney is around £1,800 per month.
Am I eligible for a living rent home?
To be eligible for a living rent home, you must:
- be renting or working in Hackney
- have a maximum household income of £60,000
- be unable to currently buy a home (including through shared ownership) in your local area.
These criteria are subject to change, and more may be added as final plans are developed.
How do I apply for a living rent home?
Look out for more details about how you can register your interest in living rent homes.
The Council will develop rules about who is eligible and how the homes are allocated in the coming months – including engaging with residents on who they think should be our priority.
Does this mean the Council is no longer building social housing?
No. The Council will continue to build thousands of genuinely affordable Council homes for social rent and shared ownership through its regeneration programmes.
The homes for living rent will be properties that would otherwise have been sold outright or for shared ownership. This will not affect the number of homes being built for social rent. In fact, any extra income made by the not-for-profit company set up by the Council to own the living rent homes will be reinvested by the Council in building new social housing.
This company will be run by a board made up entirely of council staff. It will not demolish any homes, build any homes or enter into any relationships with third parties.
Why are you letting homes at market rent?
Central government provides no funding directly to the Council to build or manage homes at a discounted living rent, so some homes will be let at a market rent to subsidise those at a living rent.
Hackney Council, through the not-for-profit company set up to manage market rent and living rent homes, will be a responsible landlord following the principles set out in our #BetterRenting campaign.
We will not charge excessive fees and charges, offer secure and stable tenancies without unreasonable rent increases, and be responsible to any repair or maintenance issues.
Who will let and manage the homes?
The not-for-profit company will have a contract with the Council to formally let and manage the homes, and be the landlord of those who rent from it. The Council’s existing repairs, maintenance and other teams will provide these management services.
Will the Council be selling any land to this company?
No. The Council will retain freehold of all homes the not-for-profit company is being set up to let and manage.
The only reason the Council is setting up a not-for-profit company is because of government restrictions on what kind of homes the Council can directly own or let.
The Council’s living rent plans will not mean the loss of freehold of any Council land or third-party involvement in any part of the ownership, letting or management of these homes.
Why doesn’t the Council just build social housing instead?
We are doing both. Our regeneration programme will see nearly 4,000 homes built across the borough – with more than half for social rent and shared ownership. We’d like to build so much more, but the Government provides no funding to build social housing and arbitrarily restricts the amount the Council can borrow to invest in new homes for social rent.
We’ve been campaigning for this to change so we can unleash a new generation of social housing, and we’ll continue to make the case to ministers that we need to build new Council housing to help the 13,000 families on our housing waiting list, 3,000 of whom are in temporary accommodation.
Homes for living rent are designed to help private renters who don’t usually qualify for social housing, but are priced out of buying their first home due to rocketing rents and house prices. Building these homes will not mean we build fewer Council homes for social rent – and because any surplus income will be reinvested in housebuilding, it may mean that we can build more.
How can I find out more?
Read more detail in the Council's announcement, and keep an eye out for how you can sign up for more information in the coming months.