Rent Restrictions For Council and Housing Association Tenants
For those who rent from the Local Authority, direct rent restrictions do not apply. As a result of this, the eligible rent for tenants of Local Authority properties will be full rent, minus ineligible services and any non-dependant deductions.
Where council tenant rents are high in comparison to guidelines issued by the Department of Communities and Local Government, the restriction applies the subsidy payable to local authorities and not the individual claimant. This is done through the Rent Rebate Subsidy Limitation Percentage. Rent Rebate is normally paid at a subsidy rate of 100%. Where rents are high the amount payable by the DWP is the percentage derived from dividing the average rent for the authority by the target rent figure. The cost of this is then met by Housing Revenue Account (the total borough funds for council tenants).
Tenants of registered social landlords (housing associations) do not normally face restrictions but where a local authority considers the rent to be unreasonably high, or if the property is "unreasonably large" for the circumstances of the claimant it may be referred to The Rent Service and a restriction may be applied.
The important point is that the rent, or under occupancy must be unreasonable. So a couple in a two bedroom house will not necessarily be referred to the Rent Service.
Read more about this topic: Housing Benefit
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