UK Social Housing Rents Set To Rise 7% Next Year
Social housing tenants in England will face a 7 percent rise in their rents next year under plans set to be announced by chancellor Jeremy Hunt, adding further pressure to their straitened finances. Rents for the 4mn people in the social housing sector, which are regulated by the government, were set to rise at the consumer price index rate plus 1 percent for the coming financial year. Since inflation reached 10.1 percent in September, that would have amounted to an 11.1 percent increase. But in an attempt to limit the blow for tenants facing a cost-of-living crisis, the government launched a consultation in August into the precise level for a much tighter rent cap. About 17 percent of England’s households rent their homes from councils or housing associations, according to official data, typically paying less than tenants in the private sector. Landlords had warned the government that sets the cap at 3 percent would give tenants better protection but also prompt severe financial constraints for the sector, inhibiting housing associations and councils from building new properties. Many tenants in the sector receive full housing benefits from the state, meaning taxpayers will pick up the cost of the rise in their rents. However, roughly 30 percent of social tenants pay the full rent and will be hit by the increase in full because they are not eligible for housing benefits. Likewise, many families that are already close to the government’s “benefit cap”, a limit on the total amount of benefit a person can receive, could find themselves having to pay any The National Housing Federation, which represents housing associations — not-for-profit organizations that control huge swaths of social housing — had warned against a lower cap. It said opting for 3 percent for just one year would force members to reduce development activity, given that rents underpin borrowing needed to develop new homes. That could have a “serious knock-on effect” on the wider construction sector at a time when private developers are already retrenching, it warned.
Tags : social housing tenants England rents Chancellor Jeremy Hunt sector Government consumer price National Housing Federation