Social housing rent cap consultation announced

The government has launched a consultation looking for views from social housing tenants and landlords on a proposed rent cap with the aim of understanding how to support households with the cost of living.

The proposals include a cap on social housing rent increases for the coming financial year. A cap of three per cent, five per cent and seven per cent are being considered.

It is believed the cap could save tenants an average on £300 a year. The cap also aims to provide stability with rising inflation.

Social housing rent increases are regulated by the government. They are currently set at up to the consumer price index (CPI) rate plus 1 per cent. This means a potential increase of 11 per cent next year in line with Bank of England forecasts.

The rent cap would be temporary and apply from 1 April 2023 to 31 March 2024. The consultation is also seeking views on whether to set a limit for 2024-2025.

A final decision will be announced later this year, following the consultation.

Housing Secretary Greg Clark said: "We must protect the most vulnerable households in these exceptional circumstances during the year ahead. Putting a cap on rent increases for social tenants offers security and stability to families across England.

"We know many people are worried about the months ahead. We want to hear from landlords and social tenants on how we can make this work and support the people that need it most."

Geeta Nanda OBE, Chair of the G15 group of leading housing associations and Chief Executive of MTVH, said: "We are deeply concerned by the impact cost of living pressures are having on the people we provide homes to. G15 members have increased support for residents, including providing additional funding for vital crisis support, on top of the work we are doing to bring down people’s energy bills by improving the energy performance of the homes we provide. The support government has announced for energy bills is welcome, but it is clear that further assistance is urgently needed.

"All G15 members recognise the current high rates of inflation and are considering the impact of this on residents and the essential work we do carefully. To maintain and improve existing residents’ homes, as well as continuing to build much needed new affordable homes, significant investment each year is essential. Rental income is critical to supporting this work. Housing associations have already seen costs for vital materials for repairs and maintenance work increase by as much as 16.8 per cent this year, and the cost of constructing new homes has grown by more than 11 per cent as well.

"In getting the balance right on rent setting, we are committed to maintaining affordability for residents. We welcome the government’s consultation and the opportunity to discuss these important issues further."

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