Current rent policy dates back to 2019 and permits social housing rents to increase by up to the CPI rate at the previous September plus 1% point. This policy was intended to run up to 2025 providing longer-term certainty and stability for business planning and investment.
However, faced with an unprecedented rise in inflation and the exceptional cost of living pressures on households, the government is now proposing to restrict the 2023 social housing rent increase and is consulting on alternative arrangements.
Under the consultation proposals social landlords would be permitted to increase rents by up to CPI+1% or by 5%, whichever is the lower, effectively placing a 5% ceiling on increases next year.
The consultation is also inviting views on alternative ceiling options (such as 3% and 7 %) and whether restrictions should be extended beyond next year to cover the 2024 increase as well. The government is also keen to understand what councils would opt to do in terms of rent increases if this ceiling was not to be imposed.
The intention is for the proposed rent increase ceiling to only apply to existing tenants, it will not apply on new properties and relets where the formula rent and full CPI plus 1% can be applied. The consultation also states that these arrangements will apply across the board, it is not proposed to make exceptions for certain less financially resilient categories of social housing – although feedback is sought on this. Where individual landlords face viability issues, it may under certain circumstances be possible to agree a waiver with the Regulator of Social Housing.
DLUHC has published an impact assessment alongside the consultation which estimates the loss of rental income for councils at £3.4billion in the 5-year period between 2023 and 2028.
In framing the CWAG response we are keen receive feedback from CWAG members on the consultation proposals and how these will impact locally on HRA business plans, the scale of financial loss and what this will mean on a practical level in terms of services for residents, repair programmes and investment plans including newbuild and meeting climate change targets.
The consultation runs for 6 weeks from 31st August 2022 to 12th October 2022
