Working for tenants and residents
 

Government consultation on temporary rent cap – Feedback

The Government has published a consultation on a draft Direction to the Regulator of Social Housing about social housing rents in England. The consultation seeks views on a temporary change to social housing rent policy that would take effect from 1 April 2023. 

Current rent policy permits social housing rents to increase by up to the CPI rate at the previous September plus 1%. In light of the high level of CPI and the exceptional cost of living pressures facing households, the Government is consulting on setting a lower ceiling on maximum social housing rent increases in 2023-24 to protect households from very high rent increases next year. 

The consultation proposes a 5% ceiling on rent increases but also invites views on alternative ceiling options (such as 3% and 7%). Under a 5% ceiling, social landlords would be permitted to increase rents by up to CPI+1% or by 5%, whichever is the lower. The consultation also asks whether the ceiling should apply in 2024-25 (as well as in 2023-24) and whether exceptions should be made for particular categories of rented social housing. The consultation proposes the ceiling should not apply to the maximum initial rent that may be charged when properties are first let and subsequently re-let.  

Further details of the consultation are available here.

The consultation will run for 6 weeks and will close on 12 October 2022. 

TAROE Trust would welcome your views to inform our response to the consultation. 
We have therefore prepared a “draft” response document to highlight our initial thinking in this area, but we would welcome your views on whether we have got this right. 

In general, our initial response can be summarised as follows: 

  • The Government should cap rents at the lower 3% ceiling in 2023-24 and potentially 2024-25 if inflation remains excessively high. This will better enable tenants to weather the storm of the cost of living crisis in the short term. 
  • Tenants may be open to a longer term “catch-up” period where rents could rise at higher levels above inflation over subsequent years to mitigate the compound effects of lost rental income, subject to additional safeguards for tenants: 
    • That strategic decisions on resource allocation is informed by tenant consultation to inform investment and new supply priorities. 
    • There are additional affordability checks to ensure that rents are truly affordable and do not exceed 35% of net household income. 

A copy of our full Draft Rent Consultation response can be accessed here