Rent Rules Will Slow Housebuilding Rates

The new government formula which dictates social housing rent increases was announced last month and was welcome for providing some stability for housing providers – but the much quieter announcement that rent convergence will be cut short after 2015 is worrying for a country that desperately needs the development of more homes.  Rent convergence – which allows social landlords to increase rents by an extra £2 to slowly align properties with their target rents and help ensure similar properties charge a similar level of rent – has been in place for more than a decade, but in a letter sent to housing providers last week the CLG declared they are "not minded" to extend the policy. Social landlords have responded to this by claiming that this will cost them hundreds of millions of pounds a year and will impede their ability to build new homes, while councils warned the change will affect their ability to repay debt.  Read more on the Guardian website.