Inflation figures set rent fall at 0.9%
Housing association rents are set to fall 0.9 per cent next year following the publication of inflation figures.
The Office for National Statistics yesterday published its inflation figures for September, which are used to set housing association rents.
Association rents track 0.5 per cent above the Retail Price Index, which came in at -1.4 per cent, giving the figure of -0.9 per cent.
From a housing association perspective, the figure is less bad than had been feared. At one point commentators suggested RPI could fall as low as -3 per cent, and the government has proposed a -2 per cent rental floor to limit the damage to business plans.
This was attacked by critics including the National Housing Federation, which argued that even cuts of 2 per cent would hinder the ability of associations to build new homes in line with government aims.
In recent responses to a government consultation on directions to regulator the Tenant Services Authority, the federation and the Council of Mortgage Lenders both called on the government to set a floor of 0 per cent.
In its response the federation says that it does not believe the formula allows rents to fall below zero, and does not agree with the proposal to impose a -2 per cent floor.
It states: ‘In our view the interests of rent payers, housing associations, government expenditure on benefits and the pressing need to develop high quality homes for social rent has not been appropriately balanced.’
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