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Sector demands inflation-linked rent deal

Sector leaders have called for the power to set inflation-linked rent increases after Sajid Javid promised “certainty” at the National Housing Federation (NHF) conference.

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Sector demands inflation-linked rent deal

The communities secretary said that despite pushing hard “right across government”, he was unable to confirm “the future formula for social housing rents”.

Many in the sector had hoped Mr Javid would use the conference to announce how rents would be calculated when the current 1% rent cut is lifted in 2020.

Before the rent cut was introduced, social rent levels increased at a rate of CPI plus 1%. David Orr, NHF chief executive, told Mr Javid this deal should be restored, as promised by George Osborne in 2015.

The cost of returning to this deal in terms of increased housing benefit has already been included in Office for Budget Responsibility projections, and any lower deal would effectively represent a cut.


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However several sector leaders said they expected a deal which would allow rents to increase by CPI, but without any additional percentage rise permitted.

Associations called on the government to return to a deal linking rents to inflation, which has risen to 2.7% from almost zero since the Brexit vote.

Rod Cahill, chief executive of Catalyst, insisted: “The starting position would be CPI plus one. It’s only real growth that can deliver more affordable homes.”

Kate Davies, chief executive of Notting Hill Housing, on the other hand, said she thought it would be “reasonable” for rents to increase purely in line with inflation.

She told Inside Housing: “If they want to encourage additional development, one way to do that is through rent, but my own view is that grant is better targeted.”

Paul Hackett, chair of the G15, told Inside Housing he wanted “an inflation-linked tenure deal from 2020 – CPI plus 1%”, which, he said, “would translate into 10,000 more properties a year from the G15”.

David Montague, chief executive of L&Q, said the lack of a firm commitment was “frustrating” but that he was “prepared to wait a few more days”.

He added: “They were using the word ‘formula’, so this isn’t flexibility, it’s a formula.”

Chan Kataria, chief executive of EMH, said: “I think he gave us a really strong hint that we will return to CPI plus one; that we’ll have some rent certainty.”

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