Government reveals rent convergence levels of £1 next year with a rise to £2 in 2028

“This decision has taken careful account of the impact on rent payers and the implications for public spending, as well as the benefits to the supply and quality of social and affordable housing,” the document said.

Rent convergence is a mechanism to align social rent levels gradually over time to provide consistency across the country, and was introduced in 2022 under the previous Labour government, before being abandoned in 2015. 

Today’s decision follows a consultation launched by MHCLG last summer on how to implement the policy. It proposed rises in weekly rents of either £1 or £2 each year.

At the time, the National Housing Federation (NHF) and the G15 both urged the government to go beyond this. At the time, the NHF said it would “encourage” ministers to implement a £3 uplift, starting in 2026. This would generate an extra £3.4bn over 10 years for housing associations, the group said.

London Councils, a membership body for councils in the capital, also urged the government to introduce social rent convergence at £3 per week, warning that failure to do so would mean “at least 7,000 fewer council-led homes over a decade”.

MHCLG has previously estimated that a rent convergence of £2 a week would result in registered providers receiving £6bn more in rental income over the period of 2026 to 2036. This comprises £3bn for private registered providers and £3.1bn for local authorities.

In its update today, MHCLG said that tenants will benefit where convergence results in “higher levels of investment” by providers to deliver improvements to the quality and energy efficiency of their homes. 

“We have also considered the interests of households who would benefit from more social and affordable homes being delivered – such as those who are currently trapped in temporary accommodation or unaffordable and/or unsuitable privately rented housing. We believe this outcome strikes the right balance overall.”

In 2002, the Labour government introduced rent convergence to ensure that similar rents were charged for social rent homes, regardless of whether they were provided by councils or housing associations.

The plan was to bring the rent of all social homes in line with ‘formula’ rent over time, but in 2015 the policy was abandoned by the coalition government, meaning the rent on some social homes is still lower than formula rent. 

According to the NHF, 71.4% of homes paid social rents that were below formula rent in 2023-24.

Reintroducing rent convergence has also faced some opposition. Writing recently for Inside Housing, Pat Turnbull, regional delegate at the London Tenants Federation, said the last time the policy was in place it did not make rents “fairer”, few social rent homes were built, and the “general decline” in the standard of upkeep of many social rent homes continued.

Last year, Labour Campaign for Social Housing said that when combined with Consumer Price Index  plus 1%, convergence will hit hard those people whose rent is not covered by housing benefit or the housing component of Universal Credit.