Government Plans to Ditch Rent Convergence Policy

The government is planning to cut short its policy of rent restructuring, which was designed to achieve convergence of social housing rents.  In a surprise move that was not announced as part of the rent settlement in last month’s spending review the CLG has revealed that it is ‘minded not to extend rent convergence beyond 2014/15’.  Restructuring was introduced in 2002 to align rents in council and housing association properties and was expected to achieve convergence by 2016.  Under the rents settlement announced last month, from 2015 social landlords are to use a new rent setting formula of the consumer price index plus 1 per cent.  This formula is to be fixed for 10 years and replaces the current formula of the retail price index plus 0.5 per cent plus £2.  Read more on Inside Housing.