Rents for Social Housing from 2020-21

The government has published a consultation on its social housing rent policy from 2020.

The document reflects the government announcement in October 2017 of the intention to permit registered providers to increase their rents by up to CPI+1% each year, for a period of at least 5 years.

For the first time, the government intends to direct the Regulator to apply its rent standard to all registered providers – i.e. to both local authority registered providers and private registered providers.  Bringing local authority landlords within the scope of the RSH rent standard will respond to the roll out of Universal Credit.

The consultation also proposes changes to how “formula rent” is calculated and the rules around affordable rent – such as preventing social landlords from resetting annual rents by more than CPI+1% when re-letting a home to the existing tenant.

In its assessment of the impact of the new rent policy, the government states “Five policy options were considered ranging from permitting an annual increase of up to CPI+2% through to the continuation of the 1% rent reduction.  The preferred option is CPI+1%. This option is neutral in terms of delivery of affordable homes”.

The new policy will come into effect from 1 April 2020. It will not override landlords’ statutory obligation to complete the four year social rent reduction as required by the Welfare Reform and Work Act 2016. Where a landlord has not completed the social rent reduction by 31 March 2020 (because its rent year begins after 1 April), it must complete the reduction before the applying the new policy.

The consultation available here closes on 8 November.  If you are responding to the consultation, it would be helpful  if you could provide us with a copy of your consultation response to help with our deliberations.