NHC responds to rent policy consultation

We recently responded to the Government’s consultation on future rent policy. The Government initially proposed a new rent policy of ‘CPI+1%’ for five years from April 2026. They sought views on extending the rent settlement and wider potential changes to social housing rent policy, through the consultation.

As part of our response, the NHC, Chartered Institute for Housing, National Housing Federation, Local Government Association, Association of Retained Council Housing, the National Federation of ALMOs and the Councils with ALMOs Group, commissioned analysis by Savills Affordable Housing demonstrating the impacts of different rent policy proposals.

This analysis, as well as a joint letter, has been shared with the Deputy Prime Minister and Secretary of State for Housing, Communities and Local Government, as well as officials in the Ministry of Housing, Communities and Local Government.

A summary of our response is below:

• We argued that the proposed rent policy of CPI +1% for five years would go some way to improve the finances of the housing sector and maintain current levels of delivery, although this has been undermined by the increase in employer national insurance contributions. If the government wants the housing sector to go further on delivering new homes, improving housing quality and energy efficiency, then this settlement will be insufficient.
• Instead, the NHC believes that the government should extend the proposed rent settlement of CPI+1% for 5 years to 10 years. This will increase the capacity for investment in new and existing homes by reducing the cost of debt faced by affordable housing providers, allow them to plan investment and development programmes with greater confidence, and provide the affordable housing providers in the North with an additional £18.68 billion of income to invest in homes over their 30-year business plan period.
• Furthermore, we believe that there is a strong case for government to reintroduce rent convergence at either £2 or £3 per week, as part of the next rent settlement. This would provide additional income for providers, especially local authorities, to invest in homes and ensure that affordable homes are let at the correct rent levels. This will also put the housing sector’s finances on a more sustainable footing in the longer term, significantly improving the position of Housing Revenue Accounts and housing association interest cover.
• It is also important to highlight that if these changes were implemented, social housing rents in the North would remain affordable for tenants, while the housing sector would be in a significantly stronger position to meet the multiple challenges it faces, and to support the government’s ambition to build 1.5 million new homes across this parliament. Social rents in the North would still be significantly lower than their equivalents in the private rental sector, especially in major cities and areas with acute affordability issues.

Our full response can be accessed here.

Please contact tom.kennedy@northern-consortium.org.uk if you have any questions.