Government consults on social housing rent cap but councils and housing associations express concern about impact on critical services, investment in homes
The Department for Levelling Up, Housing and Communities has launched a six-week consultation on a proposed temporary rent cap aimed at protecting tenants from the rise in the cost of living.
Under the proposals, a cap on social housing rent increases would be put in place for the coming financial year, with options at 3%, 5% and 7% being considered.
The proposed rent caps could save tenants an average of £300 per year and provide greater financial stability for four million families, the Department suggested.
Housing Secretary Greg Clark said: “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.
“The rent cap would be temporary and would apply from 1 April 2023 to 31 March 2024. The consultation also seeks views on whether to set a limit for 2024-25. The government understands this will impact social housing landlords and is engaging fully with the sector.”
Responding to the launch of the consultation, Cllr James Jamieson, Chairman of the Local Government Association and Kate Henderson, Chief Executive of the National Housing Federation, said: “Councils and not-for-profit housing associations are very concerned about the impact rising living costs are having on social housing residents.
“Housing providers have been carefully considering their approach to next year’s rents and will do all they can to keep increases low where possible. Working with partners, councils and housing associations will continue to do what they can to protect people from hardship, targeting help at people facing the most complex and acute challenges.
“We are glad to have the opportunity to respond to the Government’s consultation and will be talking to members over the coming weeks before responding in more detail.”
However, they added that they were “very concerned that a new cap on social housing rent increases will significantly impact on housing providers’ ability to provide critical services for residents and invest in new and existing homes.
“Decisions on the level of rent increases for tenants need to be made by housing providers within the existing government rent policy commitment, ensuring that there is a careful balance between affordability for tenants and investment in the homes that they live in.
“If the Government does take forward a lower cap, then it should provide additional funding for 2023/24 and for future years so that housing providers can continue to safeguard services and meet the country’s future housing needs.”
A final decision will be announced later this year following the consultation, to allow social landlords enough time to factor this into their rent decisions for April 2023.
Lottie Winson
