Housing associations can keep their charitable status even if they start charging rents that are 80 per cent of the market value, provided they can demonstrate they are still relieving poverty, according to new guidance from the Charity Commission.
The guidance, published yesterday in response to a question from the Tenant Services Authority, which regulates social housing, says charitable housing associations may use the new Affordable Rent framework introduced by the government, which allows them to charge rents of 80 per cent of the market value.
Housing associations can choose whether to adopt the new charging policy as part of an overhaul of how the government invests in new and existing social housing.
The Charity Commission guidance says that if housing associations decide to use the new framework, they must still be able to demonstrate that they provide a public benefit in order to keep their charitable status.
"Given the different types of charitable housing association, the breadth of their activities, and the areas in which they operate, we cannot be definitive about whether the introduction of an Affordable Rents product by any particular charitable housing association will affect its charitable status, and associations will need to seek their own legal advice on this as necessary," the guidance states.
"Generally, where an association has a charitable purpose to relieve those in need by providing housing, then those who benefit must be poor and in housing need," it says.
"A key point is that the ability to access the benefit is more important than the level of rent charged. A person in poverty may be able to access the benefit because they are in receipt of housing benefit."
A spokesman for the Tenant Services Authority said the Charity Commission's response was very helpful.
"Each charitable association is, of course, different and it is legitimate to advise individual housing association boards to look at their own circumstances closely and seek the necessary advice," he added.