Market Rent Policy

1. POLICY PURPOSE

1.1 In addition to the provision and management of low cost rental accommodation (as defined in the Housing and Regeneration Act 2008) properties, One Manchester owns and manages a number of properties that are let as ‘Market Rent’. Market rents are determined via an independent assessment of comparable properties in terms of size, condition and area in accordance with the Royal Institute of Chartered Surveyors (RICS) methodology and reassessed in line with market conditions.

1.2 Through the delivery of market rented properties and in conjunction with its various social housing and home ownership products and services, One Manchester aims to promote the creation of sustainable communities with a mixture of tenure types and accessible housing choices. Market rent is a commercial tenure managed by One Manchester to create a profit to reinvest in its social rent activities (its core charitable purpose).

2. POLICY SCOPE

2.1 The policy sets out the provisions One Manchester has in place for the allocation and management of market rent properties, the services it will offer to tenants in these circumstances and the tenant’s rights and responsibilities.

3. RELEVANT LEGISLATION & REGULATION

3.1 This policy has been written in accordance with relevant guidance and legislation, which includes:  

• Housing Act 1988;

• Housing Act 2004;

• The Localism Act 2011;

• Manchester City Council’s Tenancy Strategy 2012;

• Immigration Act 2014;

• Tenant Fees Act 2019.

4. POLICY STATEMENT

4.1 This policy sets out our approach to offering and managing rent tenancies, including how a tenancy can be ended. A market rent tenancy is an Assured Shorthold Tenancy (AST) which is granted for a fixed period of 6 or 12 months and the rent charged is a market rent.  

4.2 At the end of the fixed term unless terminated by either party the tenancy will remain as Assured Shorthold Tenancy, known as a statutory periodic Assured Shorthold Tenancy on a rolling month by month basis until terminated by either One Manchester or the tenant.

4.3 The Regulator of Social Housing’s Consumer Standards and Rent Standard do not apply to the operation of market rent tenancies.

5. THE POLICY

5.1 Assured Shorthold Tenancies

5.2 Market rent tenancies are assured shorthold tenancies; they are not social tenancies and as such are not entitled to some rights that may be available to social tenants, such as ‘preserved right to buy’ or the ‘right to acquire’. Also, they may not necessarily be offered all the same One Manchester services available to social rent tenants.  

5.3 Market Rent tenants do not have the right to:

• Take in lodgers (however they can request this formerly and this may be agreed by One Manchester);

• To exchange their tenancy;

• To carry out improvements/alterations;

• Acquire the property;

• Sublet the whole or any part of the property.

5.4 For Market Rent Tenancies we will:

• Advertise vacant properties either via a web based lettings portal or via a local lettings agent. We will usually let properties on a ‘first come – first serve basis to qualifying applicants (see below).  

• Conduct a post tenancy visit within 6 weeks of the start of the tenancy and then annually unless further visits are required.

• Provide Information, advice and guidance in relation to how to conduct and maintain the tenancy.

• If OM wishes to end a market rent tenancy a possession order must be obtained (unless tenant has vacated the property and returned the keys to One Manchester pursuant to a notice) and (if required) execute the possession order.

• Have in place a process to end any Assured Shorthold Tenancy in accordance with Section 21 of the Housing Act 1988 or other legislation where a breach of tenancy occurs. Any legal action taken to recover the tenancy under section 21 will require approval by Head of Service.

• If there is a breach of the tenancy within the fixed term, One Manchester may serve a notice under section 8 of the Housing Act 1988, requiring possession.  All reasonable attempts will be made by OM to remedy any breach of tenancy prior to serving the section 8 notice.

• OM will review the rent charge and any service charges on an annual basis.  Market rent tenants will be informed in writing with at least one month’s notice of any changes: where the tenancy has become a statutory periodic tenancy, we will also send a Form 4 formally increasing the rent.

• Depending on the local market and subject to demand One Manchester may reduce the rent on vacant properties. Where it does the properties remain classified as market rent properties: they do not become low cost rental accommodation because the accommodation is let on open market principles and not in accordance with rules designed to ensure that it is made available to people whose needs are not adequately served by the commercial housing market.

• Arrears recovery will be robust in line with a commercial approach.

5.5 When granting a fixed term Assured Shorthold Tenancy at market rent new tenants are informed these tenancies convert automatically to a statutory periodic Assured Shorthold Tenancy on a rolling month by month basis at the end of the fixed term if no breach of tenancy has occurred.  The monthly periods start from the first calendar day after the fixed term ends: e.g. if the last day of the fixed term is 15th June, the monthly periods run from the 16th day of the month. This is important for rent setting as the date of rent increase must be from 16th day of the relevant month. One Manchester or the tenant may request a new fixed term tenancy: where the tenant requests this, One Manchester will act reasonably in making a decision whether to grant or not.  

5.6 Pre-Tenancy Check

5.7 Before being accepted for a market rented property One Manchester will seek references from either a current or former landlord and will seek assurances that the prospective tenants can afford the rent and all associated charges via a credit check. We will also undertake identity checks, right to rent checks on all adults and fulfil anti laundering obligations.

5.8 The purpose of the pre-tenancy checks, in particular the affordability and credit check is to ensure we have a full financial assessment for a prospective tenant. This will assist us in providing the most appropriate support to the new tenant from the start of the tenancy to make is sustainable for the future.

5.9 On a discretionary basis, and where there are no further suitable applicants available, One Manchester may allow lettings to individuals with unsatisfactory credit checks where affordability can be supported by documentary evidence.

5.10 Pre-Tenancy Documentation

5.11 Before entering the tenancy agreement, OM will ensure it has served on the tenants:

• The How to Rent Guide (available at): Please see below link.

• Right to rent document checks: a user guide - GOV.UK

• Copies of gas safety check, electrical check and EPC.

5.12 End of Tenancy

• The tenant may end the tenancy agreement at the end of the fixed term by giving a months’ notice or during the statutory periodic term by providing OM with at least one months' notice. If it is a joint tenancy, only one tenant need give notice to end the tenancy.

• Where a joint tenant gives notice to end the tenancy and the other tenant wishes to remain in the property, One Manchester may consider creating a new tenancy for the remaining sole tenant, this will be subject to ability to pay and payment of a month’s rent in advance and a deposit no more than six weeks rent (the original deposit to be returned on the end of the initial tenancy).

• All terms of the tenancy agreement are expected to be adhered to throughout the tenancy, including all provisions about the end of the tenancy (e.g. about the condition of the property at the end of the tenancy).

• At the end of the tenancy any deposit will be returned to the tenant within 10 days of One Manchester and the tenant agreeing the amount to be returned.  

• Where the amount of deposit deductions is in dispute and agreement cannot be reached, both parties can consent to the Deposit Protection Scheme (“DPS”) enacting an Alternative Dispute Resolution (ADR) process and adjudication will be made based on evidence submitted by each parties.  If either party refuses consent to this process the DPS will only release the deposit on an instruction from the courts.

5.13 Advanced Rent and Deposit

5.14 Applicants who wish to rent an One Manchester market rent property are required to pay before signing-up for the property a deposit equivalent to no more than the maximum number of weeks rent allowed by legislation (5 weeks if annual rent if less than £50,000 or 6 weeks if annual rent is £50,000 or more) and the first month’s rent in advance. One Manchester is registered with the Government backed DPS which ensures the tenant’s deposit is held securely and independently for the duration of the tenancy. One Manchester will register the deposit with the DPS and provide the tenant (and any relevant person, i.e. a person who pays the deposit on behalf of the tenant) with the prescribed information within 30 days of receipt of the deposit.

5.15 On termination of the tenancy, the deposit is repayable to the outgoing tenant, less any costs owed to One Manchester in respect of any breaches of the tenancy including the cost of any enforcement action taken i.e. court applications in accordance with the DPS rules and permitted deductions.  

6. METHOD AND APPROACH

6.1 One Manchester aims to offer a professional and cost-effective service taking into consideration the provisions of the market rent tenancy agreement and legislation.  

6.2 This policy should be read in conjunction with the procedures and guidance notes and the following complimentary policies:

• Income and Debt Recovery Policy  

• Anti-Social Behaviour and Hate Crime Policy;

• Complaints Policy

• Rent and Service Charge policy

• Anti money laundering policy

• Data Protection Policy  

7. RESPONSIBILITIES

7.1 The Director of Operations will be responsible for ensuring this policy complies with legislative requirements.

7.2 Managers and Staff who deal with the allocation and tenancy management of properties are responsible for monitoring the implementation of this policy.

8. EQUALITY, DIVERSITY AND INCLUSION STATEMENT

8.1 One Manchester promotes a diverse and inclusive environment for our customers and colleagues to thrive. We are  committed  to  enhancing  a  culture  that  respects  individuals, appreciates  difference  and  allows  everyone  regardless  of  background  to  reach their  full  potential.

8.2 We accept our responsibility to comply with equalities legislation and regulatory requirements and aim to do more. We believe everyone requires access to the same opportunities. Through our behaviours,  we aim to challenge and remove systemic barriers to equal opportunities and reduce the likelihood of all forms of discrimination, harassment, and victimisation within our organisation and our communities.

8.3 We are committed to providing excellent customer services, which are fair, equitable and inclusive. As such, we will endeavour to understand and make any reasonable adjustments required for customers in line with One Manchester’s  Reasonable Adjustment Statement, and Reasonable Adjustment Policy and the Equality Act 2010

9. EQUALITY IMPACT ASSESSMENT

9.1 An Equality Impact Assessment (EIA) has been completed and assessed.

9.2 The EQIA has highlighted areas where characteristics could potentially be affected, however, ensuring applications are assessed on a case-by-case basis allows for characteristics to be protected.

9.3 Market rent tenancies do not have the same ‘protective’ elements of a typical social housing tenancy, but One Manchester are dedicated to preserving inclusion.  

10. MONITORING AND REVIEW

10.1 Compliance with this policy shall be monitored by the Sales and Commercial Manager.

10.2 This policy shall be reviewed every 3 years or if further government changes impact this policy.

10.3 The Director of Operations is responsible for interpreting this policy where the provisions are unclear or there is ambiguity. Any interpretation will automatically become incorporated into the policy.

10.4 The Officer or Officers operating the policy in practice are responsible for implementing the policy and interpreting the policy giving the words of the policy their common everyday meaning.

11. CONTACT PERSON

11.1 The Sales and Commercial Manager has responsibility for the effective delivery of this policy.

12. ASSOCIATED POLICIES AND DOCUMENTS

12.1 Internal Documents:

• Tenancy Management Policy

• Income and Debt Recovery Policy

• Write Off Policy

• Safeguarding Adults Policy

• Inclusive Access Strategy

• Reasonable Adjustment Policy

• Anti-Social Behaviour and Hate Crime Policy

• Complaints Policy

• Rent and Service Charge policy

• Anti money laundering policy

• Data Protection Policy  

12.2 External Documents:

• Right to rent guidance – Gov.uk