The new rent regime could generate £1.5bn of extra borrowing capacity for housing associations enabling nearly 15,000 new homes to be built a year, the Chartered Institute of Housing has calculated.
Plans for new intermediate rents of up to 80 per cent of market rent applicable to new homes and some re-lets were unveiled by Chancellor George Osborne on Wednesday.
The government hopes the move will enable landlords to make up the shortfall in the housing budget, which will be almost halved from £8.4 billion to £4.5 billion for 2011 to 2014.
The CIH estimates that the move would allow associations in England to bring in an extra £89.73 million in rent per year, with London associations receiving nearly half of it.
The figures are based on the assumption that 6.2 per cent of the 2.2 million housing association rental properties will be re-let and 70 per cent, or 95,271, of those will be let to new tenants. Of those, 39,487 will be let at the higher rate, the CIH estimates.
Communities and Local Government spokesman said on Wednesday: ‘There is a huge waiting list for social homes and, given the huge pressures on the public finances, we need to find ways of making limited public investment go further.’
CIH figures
Region | Annual rent increase | Increased borrowing capacity | New homes per year
|
North East | £2.18m | £35.79m | 358 |
North West | £7.77m | £129.48m | 1,294 |
Yorkshire & Humber | £3,69m | £60.8m | 608 |
East Midlands | £2.00m | £33.34m | 333 |
West Midlands | £5.28m | £88.02m | 880 |
East | £7.46m | £124.35m | 1,244 |
London | £42.6m | £710.03m | 7,100 |
South East | £12.9m | £215.75m | 2,158 |
South West | £5.87m | £97.95m | 980 |
Total | £89.73m | £1.495bn | 14,955 |