Sector responds to plan for rent convergence and raft of other policy changes

Bronwen Rapley, chair of Homes for the North, said: “Rent convergence and higher Decent Homes Standards will further improve the quality of social housing, and low-interest loans will enable the delivery of new developments.

“Rent convergence, done carefully, can help address long-standing funding imbalances and give social housing providers the capacity to invest in homes and communities, while protecting tenants from unaffordable rises.

“This is especially important in the North, [as] Homes for the North’s research shows the region faces a chronic shortage of housing. Our region’s significant viability challenges linked to low land values and higher remediation costs on brownfield sites constrain providers’ ability to invest without stable, long-term funding mechanisms.

“At the same time, raising standards to ensure homes are warm, safe and free from damp and mould is essential for residents’ health and well-being.”

“Homes for the North members stand ready to support the government’s housing ambitions, and we could do even more with a more equitable split of low-interest loan funding. In this package, 60% has been allocated to London, while the entire rest of the country will need to compete for the remaining 40%.

“Homes for the North doesn’t dispute the acute housing need in London, but viability challenges in the North also mean this additional funding could be pivotal to [getting] developments off the ground and [delivering] the same number of homes.”

Tracy Harrison, chief executive at the Northern Housing Consortium (NHC) warmly welcomes the measures and believes they will give Northern social housing providers long-term financial and regulatory certainty. 

She said: “It will help our members to deliver warm and safe homes across the North.

“The government has listened to and responded to feedback from NHC members on the new Decent Homes Standard and Minimum Energy Efficiency Standards. The new standards take on board consultation findings, and, as a result, are more practical to implement and will improve the quality of homes across the North.

“The NHC and other sector bodies called for the introduction of rent convergence to unlock greater investment in new and existing homes. The rate the government has put forward balances the need to invest in homes while ensuring rents remain affordable to residents.

“This, alongside today’s announcement that low-interest loans will be available to Northern housing associations, and the transformational £39bn 10-year Social and Affordable Homes Programme, will enable our members to build many more homes in the North.

Gavin Smart, chief executive at the Chartered Institute of Housing, said the reforms will “build on the 2025 Spending Review and [support] the delivery of more high-quality, affordable homes”.

He added: “We particularly welcome the new Decent Homes Standard, updating minimum standards for the first time in 20 years and strengthening action on damp, mould and energy efficiency – crucial to improving quality of life and reducing living costs for tenants.

“Measures to accelerate council housebuilding, increase financial flexibilities and reform the Section 106 market, alongside social rent convergence, should strengthen the sector’s capacity to invest in both new and existing homes.”

Jordan McCay, policy officer at the British Property Federation (BPF), said: “The BPF welcomes this additional support for the affordable housing sector and the government’s recognition of the serious challenges facing the Section 106 market. 

“Pressures on registered providers’ financial capacity, rising build and finance costs and difficulties in agreeing viable contributions have led to a growing number of stalled and uncontracted affordable homes.

“While we support the government’s recognition of the importance of social rent convergence, delaying implementation until April 2027 and limiting increases to £1 will continue to constrain a sector already facing a £2bn funding gap.

“This will restrict reinvestment in existing stock, hinder progress towards Decent Homes and decarbonisation targets and risk further stalling inward investment.

“We urge the government to align convergence with the 10-year rent settlement and look forward to further detail on how the Section 106 measures will be implemented in practice to unblock stalled homes and restore confidence across the market.”

Morgan Vine, director of policy, grants and influencing at Independent Age, said: “Older private renters are disproportionately more likely to live in older, colder homes.

“Making them wait until 2035 for the Decent Homes Standard to be enforced in the private rented sector risks leaving them living in hazardous conditions.

“An unfit, damp and mouldy home is particularly dangerous for older people in financial hardship and is a direct cause of health problems. Older renters tell us about having to scrub mould from their walls. This cannot continue.

“We urge the UK government to bring forward the enforcement of the Decent Homes Standard to 2030. Older private renters, already more likely to live in poverty, cannot be forced to live in intolerable conditions any longer.”

Paul Dolan, group chief executive of Riverside, said: “It is positive the government has listened to the sector on our need for long-term certainty and the announcements today will help to further ramp up investment in new and existing homes.

“Analysis showed more than half (57%) of social homes managed by London’s largest landlords had diverged away from formula rent, meaning G15 members alone were missing out on £2bn of resources over a decade.

“Rent convergence is essential for enabling social landlords to sustainably increase capacity to deliver both more new homes and increase investment in existing homes for customers and communities over the long term.

“While rent convergence will not be introduced until next year, it is important that future administrations retain convergence until rents equalise as this ensures fairness. People living in homes of the same value in the same area pay the same amount of rent, and it also prevents shocks and surprises for lenders helping to fund social housing.

“From a new build perspective we are particularly pleased to see government announcing £2.5bn in loans at 0.1% interest so social landlords can deliver more homes.

“We welcome the government introducing a new Decent Homes Standard [which], coupled with the Minimum Energy Efficiency Standards, will raise the quality and create safer, warmer homes.

“The new Decent Homes Standard has an important role to play in unlocking landlords’ wider plans to regenerate estates and renew neighbourhoods so that the standard helps to create stronger and more cohesive communities as we improve homes.”

Phil Andrew, group chief executive at Orbit, said: “We welcome the government’s continued support for the housing sector, with [yesterday’s] measures providing us with the further long-term certainty needed to play our part in delivering its decade of renewal.

“While we will need time to digest the detail, we appreciate the clarity provided, which will enable us to more effectively plan our strategic investments in our existing homes, alongside our commitment to supporting the government in achieving its ambition to build 1.5 million new homes. 

“We must continue to work together and keep up the momentum needed to make an impactful difference in tackling the UK’s housing crisis, and we at Orbit are firmly committed to actively playing our part.”

Greg Reed, chief executive at Place for People (PfP), said: “[The] announcement on rent convergence reflects a thoughtful, evidence-based approach by a government that listens – and is a brilliant outcome for the social housing sector.

“Setting convergence at £1 per week initially, rising to £2, gives providers like PfP the certainty needed to plan confidently towards shared priorities: delivering 1.5 million new homes, boosting growth and improving living standards for existing customers.

“Together with measures in the 2025 Spending Review, today is another vital building block to our sector’s financial recovery. We now look forward to working through the detail of the new Decent Homes Standard and Minimum Energy Efficiency Standards so we can implement future requirements effectively and ensure customers continue to benefit from safe, quality, well-maintained homes at a fair rent.”

Anne Waterhouse, vice-chair of The L12 and chief executive of Wandle Housing Association, said: “We are very pleased that the government has recognised today that there are a range of barriers affecting the delivery of social housing and particularly Section 106 homes, and we welcome the announcement regarding the range of support proposed.

“As a group of community-focused housing associations in London, we operate in particularly difficult economic conditions, but where need is most acute. As such, we eagerly await the proposed measures to improve the Section 106 process, particularly relating to the cost and design of these homes and their quality.

“The L12 and its members look forward to engaging with the government in their new compact and social housing taskforce to drive up the delivery of new social homes in the capital. Our members are committed to ensuring our residents are in safe, secure and warm homes.”

Gary Orr, chief executive of Abri and Clare Miller, chief executive of Clarion, on behalf of the 22 members of the National Delivery Group, said:

“Today’s announcements provide much-needed certainty for housing associations, setting out a long-term plan they can rely on. This clarity will give the sector the confidence to invest in existing homes and build new affordable ones.

“We are ready to play our part in building a new generation of homes so more families can have the security and stability of a place of their own.”