Stagnant rents stifle investment
I read with interest the article Rents climb by 5 per cent (8 January, Inside Housing), which highlighted the Cambridge Centre for Housing and Planning Research’s study and the assertion that average rents for most housing associations would be within 5 per cent of target rents by 2012.
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This conclusion disguises a very real issue for associations with large numbers of homes that are well below target rents. Peabody, one of London’s oldest and largest housing associations, has more than 14,400 general needs, social rent properties across the capital. We estimate that 51 per cent of these homes will not meet or be within 5 per cent of the target by the 2012 rent convergence date. If at target rent, this would generate additional income for Peabody of more than £20 million between now and 2012 - and more beyond this date.
While it is important that rents remain affordable, particularly during difficult economic times, the inability to progress rents to target restricts our capacity to deliver new homes and to invest in our existing homes and communities.
We welcome the National Housing Federation’s research project into the future of rents after 2012, but we would encourage them to take a broader view on the role of rents in generating sufficient homes of appropriate quality into the future.
Stephen Howlet, chief executive, Peabody and chair, G15