Government confirms social rent convergence plans and raises Housing Revenue Account threshold

A new Decent Homes Standard, updating decency standards for the first time in 20 years, will also apply minimum standards to improve social homes. The standard will apply for the first time to the private rented sector, although reportedly landlords will have until 2035 to implement it.

The Ministry said social rent convergence will be implemented “so providers can bring rents that are currently below the government’s formula up to that level over time”.

The Local Government Association (LGA) and District Councils’ Network (DCN) revealed that rent convergence is due to start in 2027/28 at £1 per week rises, increasing to £2 in 2028/29.

The DCN had previously called for this to begin in April 2026 at £2 per week.

Welcoming the announcement on rent convergence, however, Cllr Paul Harvey, the DCN’s housing spokesperson, said: "While we would have preferred rent convergence to begin earlier, the broader package provides the long-term certainty councils need to plan their development programmes.

"We look forward to working with the Government through the new partnership agreement to ensure councils can deliver the affordable homes our communities need."

Cllr Tom Hunt, Chair of the LGA’s Inclusive Growth Committee, meanwhile said: “This comprehensive package is a much-needed shot in the arm for council housing finances, and responds to our long-standing call to re-introduce rent convergence.

“We will review the announcement in detail but the decision to delay and step its implementation will have a knock-on effect on councils’ ability to invest in their existing stock and new supply.

“A greater level of rent convergence from 2026/27 would have meant more councils were confident to invest in building new homes. A delayed introduction will mean fewer homes being built.”

In relation to Section 106 agreements where no affordable housing provider is willing to buy, the new approach will allow the tenure of uncontracted Section 106 units to be varied in such circumstances.

“In tandem, the government will work hand-in-glove with providers, councils, and developers to agree a framework to get the Section 106 market moving again, with new measures to reset and expand the market, simplify the process, and boost financial capacity of providers to buy these homes,” the Ministry said.

Housing Secretary Steve Reed said: “Every new social home means one less family stuck on a housing waiting list. Building more social housing is crucial to fixing the housing crisis for good.

“But that’s only part of the story. We’re also driving up the quality of social housing so they’re well insulated and damp-free to keep families safe and cut their energy bills in the years ahead.

“I’m calling on everyone who has a part to play to build, baby, build.”

The chief executive of the National Housing Federation, Kate Henderson said: “Today’s announcements provide vital certainty for the social housing sector, delivering a serious, long-term plan for social housing.

“The reintroduction of rent convergence after ten years is both fair for tenants and will enable the social housing sector to build vital new affordable homes while increasing investment in existing ones.”

Harry Rodd