Housing Minister Signals Return To CPI+1% Rent Formula

Brandon Lewis, Housing Minister, has signalled that social and affordable rents will return to an inflation-linked formula after the four year rent reduction period. Councils and housing associations were told by George Osborne that social and affordable housing rents would be reduced by one per cent per year for four years from April 2016. Powers to compel councils and housing associations to reduce rents are included in the Welfare Reform and Work Bill currently before Parliament.  The reduction over the four years will mean that by 2020/21 stock retained councils will suffer a drop in forecasted rental income of some £2.4billion and a loss of £30billion income over the 30 year business plan period. This will significantly affect the resources available for housing services and planned investment in building new council housing and investment in the existing stock. Read more on the ARCH website.