The TMV is based on the fact that the new landlord will be:

• Required to keep the homes available for letting at affordable rents; and
   
• Required to manage and maintain the homes properly in the future

How The figures Are Worked Out
The Tenanted Market Value is worked out over a 30 year period. It is based upon how much income the new landlord would have from rents once the cost of housing services, management and repairs is taken out.

To get this figure, you need to know three things:

• How much the new landlord would get from rents. This is worked out from the forecasts for the future rent increases that the new landlord will make
   
• How much future management costs would be. This figure is based on the Council's existing costs. Allowances are then made for any extra management costs the landlord would have, such as more staff to manage the extra work the new landlord will be doing
   
• The costs of putting the homes into good repair and the costs of any improvement worked. These are based on the results of the stock condition survey.

There are also other assumptions made, such as the number of empty homes and debts etc. All these will have an impact on the amount of money a new landlord would have. The assumptions need to be agreed by the Council and the new landlord as being:

• Justifiable and good value for money as far as the Council is concerned
   
• Not so tough as to put the new landlord's ability to deliver at risk

Putting all this together produces a figure that becomes the TMV: the price that the new landlord would pay the Council for the homes.

Do Registered Landlords Raise Money?
Yes: Registered Social Landlords (RSL's) raise money by borrowing from recognised lending institutions, often the same banks and building societies that people use to get their mortgages from. The money is repaid over a long period. By spreading out the payments in this way, landlords do not have to increase rents beyond what is planned. A Registered Social Landlord can only borrow according to how much it can afford, taking agreed rent levels and promises on works and services into account.

Why Tenants Cannot Buy Their Homes For The Tenants Market Value?
If a tenant buys their home they have no legal repairing or management responsibilities and they can sell it later to anyone they like at a profit. RSL's on the other hand must keep homes to an agreed standard. they can also only charge a limited amount of rent for the home and can only sell it to the tenant who lives in it, at a discount.

How The Effects Of Interest Rate Rises Can Be Minimised
Many people assume that changes in interest rated will cause the new landlord major problems with repaying loans and that rents will have to rise as a result. However:

• The rent promises made to tenants are always on the basis of 'inflation' plus a given amount. This reduces the risk to the landlord because rate rises are usually linked to inflation rates. Tenants who are in work would usually see their incomes rise accordingly and those on Housing Benefit would also see the rise
   
• RSL's borrow money using a mixture of fixed rates (where the interest rate is set for a period of time) and variable rates (where the interest rate can go up or down), This reduces the risk of the affects of swings in interest rates