The requirement for rent reduction was introduced by the Welfare Reform and Work Act 2016 and The Social Housing Rents (Exceptions and Miscellaneous Provisions) Regulations 2016, and runs until 2019/20. The requirement strengthens the business case for separating service costs from the rent for social landlords in England, and any landlord that hasnít already done so should consider the prospective impact, while weighing up the potential advantages and disadvantages.

This concept note replaces our 2016 note on de-pooling service costs from the rent. It adopts a different interpretation, which has emerged from ongoing projects. The change concerns the way that an adjustment to the rent as a result of de-pooling service costs could affect the requirement for rent reduction.