Social Landlord Service: HRA Income Policy

This policy sets out how Great Yarmouth Borough Council (GYBC / The Council) will effectively manage its income to ensure its commitment to deliver exceptional Social Landlord Service (SL Service).

It outlines the Council's approach to setting rents and charges, and the Income teams priorities relating to the collection and administration of the Housing Revenue Account (HRA) income. As at end of September 2025 the Council owns 5796 social landlord homes and 424 garages. As well as providing services to 367 leasehold properties and 18 permanent pitches on Gapton Hall Gypsy and Traveller site.

This is a sub policy of the existing overarching Tenancy and Leasehold Management Policies that operates within the following policy contexts:

• Rechargeable Repairs Policy
• Repairs Policy
• Fire Safety Policy
• Tenant and Leaseholder Alteration and Improvement Policy
• Estate Services Policy
• Mobility Scooters Policy
• Tree and Landscape Policy
• Gapton Hall Gypsy and Traveller Site Allocation Policy
• Safeguarding Policy
• Void Policy
• Right to Buy Policy
• Additional Support Policy

• The Housing Act 1985, 1998 and 2004
• Localism Act 2011
• Welfare Reform and Work Act 2016
• Domestic Abuse Act 2021
• Prevention of Social Housing Fraud Act 2013
• Local Government (Miscellaneous Provisions) Act 1982
• The Equalities Act 2010
• The Mobile Homes (Pitch Fees) Act 2023
• Landlord and Tenant Act 1985
• Leasehold Reform (Ground Rent) Act 2022

The aim of this policy is to sustain a strong income management approach that aligns with the Councils priorities of improving housing, building stronger communities in the borough and efficient and cost-effective delivery of SL Services. Central to this is the delivery of the five priorities outlined in this policy:

1. Supporting tenants and sustaining homes.
2. Maximising income & minimising arrears.
3. Improving collection of leasehold charges and debts.
4. Achieving equity in tenant service charges.
5. Maximising income collection to sustain the HRA.

The Regulator of Social Housing Policy Statement outlines how social landlords can set the rents. The `Rent Standard' introduced in April 2020 allows for rent increases not exceeding the Consumer Price Index (CPI), which is determined annually in September plus an additional 1%. (Rent Standard and guidance - GOV.UK (www.gov.uk))

In 2022/23 due to high levels of inflation the government imposed a cap on social landlords to limit the annual rent increase for 2023/24 to a maximum of 7%. The HRA was already facing increasing pressures and the cap along with the impact of rising inflation along with increased construction material costs and interest rates has created additional challenges for social landlords.

The cost-of-living crisis during 2022/23-24 following the COVID-19 pandemic added additional pressures on our tenants. They faced increased utility costs, higher food costs and potentially mounting debts leading to arrears.

The Governments welfare reforms implemented through the Welfare Reform and Work Act 2016, and the rollout of Universal Credit (UC) has simplified the benefit system replacing legacy benefits for existing claimants. UC aims to assist those on low incomes, unemployed individuals or those who cannot work. However, it has significantly impacted rent income collection.

UC claimants are expected to manage their own rent payments and as UC is paid monthly in arrears, this often results in delays in rent payment. These tenants tend to accumulate higher arrears on average compared to those on other benefits or those not receiving any benefits.

In 2015, the Government announced a 1% rent reduction for general needs tenants starting from the financial year 2016-2017, with an additional 1% decrease annually until 2020. This decision significantly affected the HRA business plan, leading to a reduction in income available to invest in the housing stock and SL Services.

The Council corporate plan for the period 2020-2025 outlined our priorities to focus on improving housing, building stronger communities in the borough, and emphasising the importance of being a Council that is both efficient and cost-effective in delivering its services.

GYBC is committed to providing high standards of customer service ensuring an efficient and effective delivery of quality and accessible SL Services. It recognises the importance of delivering value for money and working collaboratively to provide excellent service.

The annual rent income collected from the Council's housing stock amounts to approximately £28 million. Additionally, the Housing Income Team is responsible for collecting income from the Council's Gypsy and Traveller site generating an annual income of £73,000 for the General Fund.

The rent received from tenants is used to cover the costs of managing services, improving the Council's homes and building new homes.  It is therefore important that the Council maximises the collection of income through rent and service charges to ensure it can meet these costs now and into the future.

As the landlord, GYBC is committed to being effective in the collection of rent and other housing income.  The Council as a landlord takes a robust and fair approach to income collection and management of arrears. The Housing Income Team are committed to supporting tenants to pay their rent often providing a holistic debt support service in collaboration with a range of partners. In 2022/23 the team achieved a rent collection rate of 99.5%.

Rent and services charges are formally agreed annually as part of the HRA Budget Report presented to members each February. The Council is required to provide four weeks' notice of the increase in charges.  There are two types of rents set at GYBC, Social Rents and Affordable Rents.

The rent we receive is used to pay the costs of managing, maintaining and improving the Council's homes.

7.1Social rents and affordable rents

Social rents make up most rents charged and are set in accordance with Housing Act 1985 and at a foundation principle is that rents are charged as a 'reasonable' rent, taking into account Government Guidance (GOV.UK: Guidance on rents for social housing) and the Regulator of Social Housing's rent standard (GOV.UK: Regulatory standards for landlords). Rents are calculated using a formula set by Government taking account of:

• the condition and location of a property
• local earnings
• number of bedrooms in a property

When a social rented property becomes empty it is re-let at the social/formula rent (exclusive of service charges), in accordance with the Rent Policy Statement national rent setting formula. There is flexibility in the policy to set rents at up to 5% above formula rent (10% for supported housing). This is reviewed annually and agreed as part of the HRA Budget Report.

Where a social rent property has been remodelled with a change in the property, i.e., increase/decrease in bedrooms, the Council will review the rent in line with the national rent setting formula.

Where the Council builds or acquires a new property, it will be let at an Affordable Rent. Affordable Rents are inclusive of service charges.  The Council sets Affordable Rents in accordance with the National Policy Statement on Rents for Social Housing. The rent is set at a maximum of 80% of the market rent (inclusive of service charges). Where the Affordable Rent property is re-let a new rental assessment is calculated in accordance with the Rent Policy Statement.

Where existing tenants are paying Affordable Rents, the Council will in accordance with the National Policy Statement apply an annual increase.

Rent levels are challengeable by judicial review although generally the courts are reluctant to interfere with local authority decisions.

7.2Tenant service charges

Tenants pay service charges on a property to cover the cost of providing communal services or shared services to a building and, if applicable the surrounding estate. Service charges are calculated to reflect the cost of the service being provided in accordance with the Policy statement on rents for social housing.  

Service charges form part of the tenancy agreement and may include caretaking, grounds maintenance, digital aerial, water, supported housing charges for tenants living in sheltered housing in accordance with the Landlord and Tenant Act 1985 (as amended). To be recoverable, the service charges must be reasonably incurred, and the services or works must be of a reasonable standard; reasonableness is a question of fact in each individual case. Challenge can be to the Housing Ombudsman.

The Council consulted tenants in September 2023 on introducing new service charges for services which are provided to some tenants but not all, for which there is not currently a service charge, this is called de-pooling.   The cost of these services was paid for by the HRA. The consultation showed that overall, there was support for de-pooling and the new service charges introduced from April 2024.  In addition, the Council consulted tenants on introducing differential charges to reflect different levels of service. 

In addition, tenants can elect to pay for additional services, such as home contents insurance and garden maintenance.  For collection purposes, these discretionary charges are treated as service charges and are added to the rent account and collected in the same way as other service charges.

These are also formally agreed as part of the HRA Budget Report annually except for the home contents insurance which is set by the insurer.

Should the Council propose to introduce any new service charges as a result of introducing a new service or enhancing any existing service, it will consult with tenants before making a final decision.

7.3Leaseholder charges

An annual service charge is levied on leaseholders to cover the proportion of costs for mandatory services provided to the block and communal areas in accordance with the Landlord and Tenant Act 1985 (as amended).  These services are set out in the lease agreement and include caretaking; digital aerial; communal lighting; day to day communal repairs; ground rent, buildings insurance, grounds maintenance and costs incurred for administration and management of the leasehold service. Leaseholders are billed annually in arrears in September.

The Council consulted leaseholders on introducing differential caretaking charges to reflect different levels of service in September 2023 and introduced from April 2024.

Leaseholders will also be liable for their proportion of the cost of any major works to the block. Leaseholders have the right to be consulted on any planned major works where their contribution will exceed £250.  The Council will recover the fair and proportionate amount of major works costs from leaseholders in accordance with the terms of leases, to ensure that tenants are not paying for the cost of improvements which benefit leaseholders.

Should the Council propose to introduce any new service charges as a result of introducing a new service or enhancing any existing service, it will consult with leaseholders before making a final decision.

7.4Freeholder service charges

Where a tenant purchases a freehold home through the Right to Buy process an annual service charge is levied on freeholders to cover the proportion of costs for mandatory services provided to the estates in accordance with the Landlord and Tenant Act 1985 (as amended).  These services are set out in the freeholder agreement and include ground rent, grounds maintenance and costs incurred for administration and management of the estate service. Freeholders are billed annually in arrears in September.

7.5Gypsy and traveller site

Residents on the site pay pitch rent and service charges in accordance with the Mobile Home (Pitch Fees) Act 2023, this legislation changed the inflationary index and now   requires that pitch rents shall increase or decrease by a percentage of no more than CPI at the latest index, and for the month which was 12 months before. The Council is required to provide four weeks' notice of the increase in charges.

7.6Other charges

There are other types of fees and charges the Council will incur because of taking legal action or undertaking repairs that the tenant is responsible for. The Council will recover the full costs that have been incurred where we can lawfully collect them, and these will be added to a separate account linked to the main rent account for payment.

Equality & diversity

GYBC strives to meet its responsibilities by ensuring that equality and diversity sit at the heart of decision-making and that we provide a fair and accessible Service to everyone, in under the Equality Act 20210 and complying with Public Sector Equality Duty.  

 This policy complies with the Councils Equality, diversity and inclusion strategy and the SL Services Additional support policy as we recognise that our tenants and leaseholders come from diverse backgrounds and have different experiences and needs.

Value for money

It is important that the Council's SL Services are value for money, and that the collection and use of rental and service charge income is effective and efficient.  

Working collaboratively

Strong relationships with partners and other public organisations enable us to deliver excellent SL Services to identify and deal with issues early on to avoid unaffordable debt, ensuring that tenants, freeholders and leaseholders can afford to pay their housing costs.

Having access to a good quality home plays a fundamental part in our tenants qualify of life. To achieve this GYBC must have a robust approach to income management to ensure that it maximises rental and service charge collection whilst also supporting tenants and leaseholders to be able to afford their housing costs. 

9.1Priority one: supporting tenants and sustaining tenancies

GYBC will act early, giving advice and support to our tenants to help understand the importance of paying rent on time, signposting to support and maximise income before arrears accrue. To achieve this, we will:

• complete a home visit to all new tenants
• provide an excellent service, be fair and equitable
• listen to our tenants and seek feedback
• work with our partners to provide advice and assistance to tenants to maximise their incomes, sustain their tenancies and enhance financial inclusion at the start of tenancies and when arrears occur
• be an advocate for timely rent and other charge payments
• be clear that rent is due in advance
• engage with tenants, freeholders and leaseholders as soon as the first payment is missed

9.2Priority two: maximising income & minimising arrears

Where tenants, freeholders and leaseholders owe money to GYBC through arrears and recharges we will take action to make sure payments are recovered.

To achieve this, we will:

• take prompt and appropriate action to recover arrears and other debts
• keep in regular contact with tenants in arrears helping them to stay on track with repayment plans
• be proactive and use measures which prevent and minimise arrears
• use alternative payment arrangements where tenants are in arrears on UC
• request Third Party deductions from DWP benefits
• be proportionate and take account of the impact on the tenant or leaseholder as well as the wider implications for the service
• stay aware of developments in arrears prevention and recovery and will develop new and effective initiatives
• be committed to using legal possession action, proportionate to the debt owed, but only as a last resort and when all alternative measures have been exhausted and in compliance with the Pre-action Protocol for Possession Claims by Social landlords before taking any formal court steps
• work with our Homelessness Prevention Team if arrears are likely to result in an eviction complying with GDPR to ensure tenants consent to any support before referrals are made to any external agencies
• comply with our statutory duty under the Homeless Reduction Act 2017, being an enhanced prevention duty to extend the period a household is threatened with homelessness from 28 days to 56 days, so that the Service works with tenants to prevent homelessness at an earlier stage

 9.3Priority three: improving collection of leasehold and freehold charges and debts

As the Landlord we are committed to managing leaseholder and freeholder income in a firm but fair way to recover monies due.

To achieve this, we will:

• deliver accurate billing on services and works completed
• ensure that leaseholders and freeholders pay their service charge and any other charges in accordance with their lease and agreement
• encourage leaseholders and freeholders to make payments in advance to support with budgeting
• we will share information to leaseholders and freeholders about what works we plan to do and estimated costs
• being committed to maximising income through a proactive and preventive approach of the accumulation of arrears.
• introduce twice yearly billing, issuing estimated bills and final bills, providing more certainty to leaseholders and freeholders of the costs they will be asked to meet each year

9.4Priority four: achieving equity in tenant service charges

It is important we understand the services we deliver, and charges for tenants are value for money.

To achieve this, we will:

• be clear and open on the services delivered
• ensure that the costs and basis for service charges are clear and transparent
• review and identify opportunities for improving services
• ensure the services and charges are reasonable

9.5Priority five: maximising income collection to sustain the HRA

Rental income makes up 90% of the income available to the HRA, 9% on charges for services and facilities and 1% on non-dwelling rents. Therefore, it is important that tenant rents are set accurately and service charges to tenants, freeholders and leaseholders reflect the cost of the services which are provided.   HRA income is used to pay for:

• the costs of managing the Council's homes
• repair maintenance and improvements of homes
• the new Housing Investment Plan will set out the priorities for investment in the Council's homes
• provision of additional Council homes
• adaptation of Council homes to meet the needs of tenants or their family members who have disabilities or long-term health conditions

The SL Service will monitor and compare its income collection against similar landlords and set challenging performance targets to meet the needs of the business.

The service publishes the following key performance indicators that are monitored quarterly by Council Members at Cabinet.

• rent collected as % of due rent (all years)
• number of tenants in arrears
• number of tenants in arrears over £1500
• number of evictions from for Rent Arrears

The Council Homes Director monitors the following performance indicators

• current Leasehold Service Charges collected as % of amount due
• former Tenant Rent Arrears collected as % of amount owed
• income collection targets are set and reviewed annually by Cabinet

This policy will be reviewed on a five-year basis or earlier if there are legislation changes, for example when provisions of the RRA 2025 and LRFA 2024 are in force and/or any subordinate legislation is introduced.