Government response to rent convergence delayed until January
The government has delayed its expected decision on rent convergence until the new year.
The government has delayed its expected decision on rent convergence until the new year #UKhousingThe sector was expecting the chancellor to introduce its decision on a £2 or £3 increase after a consultation earlier this year.
It has been a key ask from the sector, alongside uprating the Local Housing Allowance rate and temporary accommodation subsidy. All were missing from chancellor Rachel Reeves’ Autumn Budget announcement today.
The rent convergence policy was initially introduced in 2002, but was abandoned by the previous government in 2015.
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If resurrected, it would see social rent properties that are currently below ‘formula rent’ increase by an extra amount each year, over and above the Consumer Price Index plus 1% limit.
The government has scrapped the two-child benefit cap and revealed that the cost of asylum accommodation is expected to rise to £15.3bn over the next decade, according to the Office for Budget Responsibility’s (OBR) leaked forecast.
The OBR is also expecting net additions to housing stock to rise above 300,000 per year by 2029-30 due to the impact of planning reforms.
Kate Henderson, chief executive of the National Housing Federation, said: “Today’s Budget contains welcome steps to tackle the cost-of-living crisis, with removal of the two-child benefit cap – which we have long been calling for – set to lift thousands of families out of poverty.
“We had expected the government to announce how rent convergence, which equalises historical differences in rents over time, will be reintroduced.
“This policy is both fair for tenants and vital in ensuring the social housing sector has enough income to maintain existing homes and build new ones.
“However, this decision has now been delayed. We look forward to the government’s decision on this in January, which will enable housing associations to put in strong bids for funding through the Social and Affordable Homes Programme and deliver on the government’s housebuilding ambitions.
“It’s positive to see an additional £1.5bn to tackle fuel poverty through the Warm Homes Plan, and we look forward to seeing the detail on this.
“However, it is disappointing not to see any funding announced for supported housing, with many schemes closing across the country due to years of cuts and rising costs. We will work with the government to protect this vital resource.
“Housing associations remain committed to delivering a decade of renewal for social and affordable housing.”
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