Welsh government to research rent convergence strategy

Wales published its Rent and Service Charge Standard 2026-2036 last autumn, which set social rent increases at a maximum of Consumer Price Index (CPI) +1% every year if CPI for the year falls between 0% and 3%, and CPI +0.5% when CPI is between 3% and 5%.

Landlords can raise individual rent by up to an additional £2.55 per week, as long as the landlord’s overall rental income is no greater than CPI +1% or CPI +0.5%.

The standard further said that landlords should set service charges “which are reasonable and affordable”, and that these should be listed separately from rent and be reviewed annually.

At the time of the release of the new standard, the Welsh government acknowledged the debate around rent convergence.

Now, Ms Bryant has said: “Stakeholders have highlighted the potential for rent convergence to generate additional income, and some have also made the case that rent convergence could lead to greater fairness for tenants.

“However, I am clear that rent convergence is inherently complex. There are significant implications for affordability, existing funding arrangements and the interaction with systems such as Local Housing Allowance and welfare support.

“Any consideration of rent convergence must therefore begin with affordability, not growth.”

The Savills research will explore the benefits, risks and practical implications of pursuing a rent convergence strategy.

“This research, together with the new affordability framework, will provide the evidence and tools needed to inform future policy development on housing affordability,” Ms Bryant added.

In Response, Community Housing Cymru, said: "Converging rents to affordable levels is a phased approach to making social housing fairer for tenants.

"It also ensures landlords can invest in the new and existing homes Wales needs to finally end the housing emergency. We hope this research drives the urgent, evidence-based conversation on rent convergence that housing associations believe must be a priority for the next government."