Shared ownership rent review dispute

curls_whirls123

Looking for some advice on a rent review dispute.

I bought my shared ownership flat in December 2023 (a resale) and the rent part was agreed to be about £90. In July I have received a rent review letter from the Housing Association stating that they are increasing rent to around £340. This is obviously a huge jump. Other shared ownership neighbours have also had huge jumps in their rent. I contacted them and they gave me a breakdown of how they've calculated it. This, as well as my lease, is using a formula that looks a bit like:

(1% plus NatWest Bank Base Rate) x (Half Market Value) x Multiplier)

In my lease, that 1% is one pound not a percentage so we are awaiting clarification on this.

NatWest bank base rate is 0.0525

The multiplier is 1

The Housing Association has now also sent a letter saying the rent was not calculated correctly in the last couple of years, hence the significant jump, and that they are not doing to charge us the backdated amount.

My question is - I thought that the government had imposed a cap based on RPI or CPI (depending on when you bought the property) rather than using this 'base rate' formula. Can they legally hike up rent this much (as it is in the lease) if the government has this cap in place? There is hardly any information online about shared ownership rent reviews using this 'base rate' formula. The lease was originally from 1992 and I suppose it hasn't been updated since then/I do not have an updated version.

Any help or experience would be appreciated.

Am in London, England

ResourcesShared

You could try contacting the Leasehold Advisory Service (LEASE) - link below. They offer "free summary legal advice to help you decide what to do next". Make sure you have your lease to hand, so you can tell them exactly what it says, and your correspondence with your landlord.

Speaking generally, there is increasingly wide variation in shared ownership - partly depending whether it is grant-funded and bound by Homes England's requirements, delivered under Section 106 agreements, or private shared ownership. Your rent review doesn't sound like the standard Homes England model lease term (linked to RPI or CPI depending which version of their model lease), so check this out with LEASE.

https://clients.lease-advice.org/#/