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We shouldn’t celebrate rent increases

The CPI+1% rent increase in England could help the sector deliver more new homes, but it will hit those most in need the hardest, says Helen White

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We shouldn’t celebrate rent increases, says Helen White

“Be careful what you wish for.” This is just one of the many pearls of wisdom passed on to me by my mother over the years and I can’t help thinking it would be good advice for the sector right now.

Of course, certainty about rents is helpful in many ways. Inside Housing has already reported a long list of positive reactions from lenders and investors and the National Housing Federation (NHF) and the Chartered Institute of Housing have both come out in support of the settlement.

Yet, something about the whole rent settlement narrative has for many years now left me feeling a bit queasy. OK, I’m just going to say it. Please can we stop celebrating rent increases.

The Consumer Price Index plus 1% rent increase is set against a background of benefit freezes, so in essence the poorest have to pay more and so those most in need are hit hardest. And we wonder why we have an image problem.


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Some will think this view is naive. Believe me, it’s an issue I’ve given hours of thought to over the years.

I understand the difficulty presented to associations by uncertainty around rental income.

Yet the drive home after approving a rent increase at a board meeting was always a miserable one.

I certainly never felt pleased about it – quite the opposite, in fact. Above-inflation rent increases makes the affordability of social rents questionable over time.

"The drive home after approving a rent increase at a board meeting was always a miserable one"

I also remember the miserable drive home after the big decisions we had to take as a board when the rent cut hit. That wasn’t much fun either. We cut programmes and as a result people left the business. It felt terrible.

Conversely, I also felt proud. As an organisation we’d demonstrated resilience, a capacity to recover quickly.

In hindsight, was the rent cut the worst thing to ever happen to us? No, not really. In fact, as a result I think we are stronger and in better shape to deal with inevitable future uncertainties. As the saying goes, if it doesn’t challenge you, it won’t change you.

“Above-inflation rent increases makes the affordability of social rents questionable over time.”

We need to use the challenges we face as a sector to drive better, smarter ways of doing things. Of course in an ideal world we’d have certainty about our income streams; the chaos brought about by Brexit wouldn’t exist, not to mention the challenges presented by ongoing welfare reform, an uncertain economic environment and a London housing market that some say is teetering on the edge of collapse.

Does your business see this web of complexity and risk as an opportunity? Or a case of having to make the best of a bad hand? Is your glass half full or half empty? Our ability to identify, understand and mitigate risks has never been more important.

Good boards will be working closely with their executive teams during the business planning cycle to shape robust business plans that can withstand the inevitable uncertainty that surrounds us.

If they decide to levy the full increase, boards need to be really clear about the value for money this is achieving – what it is being used for? New homes, improving services, additional wages?

This is where the depth of skill and knowledge around the board table will be tested – helping organisations think differently while being guided by the values they hold dear.

In 60 seconds: the English social housing rent settlement

We need to take the time to reflect on the impact of our decisions on those who use our services. Understanding our customers has never been more important. We need to get better at collecting data and insight, using it to develop customer-led services.

So now we’ve secured certainty about the rent. Well, as certain as we can be considering the original settlement given back in 2013 was supposed to be for 10 years. The pressure to deliver more homes is higher than ever.

In 2015 David Orr, chief executive of the NHF, said the rent cut would see us build 27,000 fewer homes; the Office for Budget Responsibility said 14,000 fewer.

“If they decide to levy the full increase, boards need to be really clear about the value for money this is achieving.”

Housing minister Alok Sharma says the new settlement on social rent will “enable social landlords to build many more houses”. The rent increase is set against the expectation to continue to increase supply.

However, some in the development sector are saying it’s too early to say for sure whether new homes will come directly from the announcement on rents.

I think we need to tread carefully here. We ‘got what we wished for’, didn’t we? We asked for certainty on rents and now we have it, so surely we have to deliver. No ifs, no buts.

Helen White, chair, Regulatory Board for Wales; and chair, Knowsley Housing Trust

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