Housing Corporation to scrutinise inflated rents

The Housing Corporation is to inspect the property valuations of registered social landlords that have particularly high rents.

The move follows evidence of excessive charging, found during the three-year review of rent restructuring carried out for the ODPM and published last week (HT 16 July, page 13).

A small number of RSLs were discovered to have rents significantly higher than the norm.

Some turned out to have completed their statistical returns incorrectly and others may have genuinely more expensive stock, but it is thought there may be problems with the valuation methodology in some cases.

A spokesperson for the corporation said the probes would be part of normal regulatory checks: “There are no plans to review valuations though we would expect to investigate those organisations with anomalous rent levels as part of our regulatory role. Rent rises have actually slowed since 1997.”

Assessments of value only partly contribute to th e formula for calculating rent, so a high valuation would not push up rents significantly.

Steve Wilcox, professor at York University and one of the report’s authors, said he couldn’t pinpoint what was behind the disparities.

But he added: “It’s not systematic, but the corporation should take note and it should ask this small number of associations to look closely at how they approach valuations.”

In the past some associations have used the National Housing Federation estimation model and building society house price data to conduct valuations rather than getting a formal assessment.

The report also found that average housing association valuations were 20% higher than those for the local authority sector.

Wilcox said this could pose problems if the Department for Work and Pensions introduces its mooted flat rate of housing benefit paid to tenants, known as the local housing allowance.

He said: “If you have that bigger gap between council and association rents it raises questions about whether the allowance can be set at the same level for the whole of the social rented sector.”