Social Rented Housing – Parliamentary Written Answer

Justin Madders: To ask the Secretary of State for Housing, Communities and Local Government, what plans he has for rent convergence in the social housing sector.

Kit Malthouse: For more than a decade, registered providers of social housing were able to increase the rent on Social Rent properties by an additional £2 per week if the rent was below the 'formula' level. This mechanism was phased out in 2015 and the Government has no plans to reinstate it, as this would be likely to result in additional costs to tenants and taxpayers.

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2019-07-08/274562

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.

Council Approves Rent Rise Of Almost 10 Per Cent

Rotherham Council has approved a recommendation for an inflation-busting rent rise of 9.45 per cent - one of the biggest hikes anywhere in the country. Dave Richmond, director of housing and neighbourhoods at Rotherham Council, said the borough’s traditionally low rents - which before last year’s rise of 8.69 per cent rise averaged £60 a week - forced it to apply the maximum increase allowed in order to comply with CLG criteria aimed at bringing council rents into line with those charged by housing associations. ‘For us to get to convergence there’s no way we cannot apply that [formula],’ he said. But local tenants’ federation Rotherfed said many residents would be unable to afford a second year of steep rent rises. ‘We have had low rents and that’s coming home to roost,’ said Steve Raffle, development manager at Rotherfed. ‘But the convergence doesn’t have to be so quick; we are very worried about the impact on tenants.’ Read more on Inside Housing.