Rent cap: Consultation for social housing in England launched

People living in social housing in England could see rent increases capped below inflation next year, the government has said.

It has launched a consultation on plans which could see hikes as low as 3% for people living in housing owned by councils and housing associations.

There are fears rents tied to a measure of inflation could rise by 11% or more.

There were 3.8 million social-rented homes in England last year, House of Commons figures showed.

The Department for Levelling Up, Housing and Communities (DLUHC) said the temporary cap could see annual rents capped at 3, 5 or 7% in the year from April 2023.

Currently social landlords can increase rents in line with the Consumer Prices Index (CPI), described as the speed at which prices of goods and services rise or fall, plus one percentage point.

The CPI rose by 10.1% in the year to July, which means social rents could rise by 11.1% if inflation stays at or above this level in September.

A 5% cap would save the tenants on average £300 a year compared to the above scenario, DLUHC said.

Housing Secretary Greg Clark told BBC News: "When it comes to the rents of some of the most vulnerable people in society pay - tenants of housing associations and councils - it's important it shouldn't be excessive.

"And I think to have double-digit rent increases when their household incomes are suffering I think wouldn't be right, and I know that housing associations and councils will recognise that."

When asked if the cap would encourage social housing landlords to increase rent, Mr Clark said there was no requirement to increase to the cap and they wanted to provide the reassurance to tenants.

The government is seeking views from landlords and tenants on whether a social rent rise between 2024-2025 should also be limited.

He added it made sense to have the six-week consultation now, so a new prime minister can make a decision on the cap in the future.

It will close on 12 October and a decision will be announced later this year, DLUHC said.

Labour's shadow levelling up, housing and communities secretary Lisa Nandy said families in social housing already face "impossible choices" between heating and eating.

She said: "This announcement is therefore welcome clarity that social renters shouldn't be facing rent rises of 11% or more in just a few months' time.

"But we urgently need clarity on how the shortfall will be funded because social landlords, including hard-pressed local councils, can't be expected to take the hit.

"There is also a huge hole in this plan to address the hundreds of thousands in the private rented sector who face a cost of living crisis."

Labour has called for emergency legislation to prevent evictions and a fully-funded energy bill freeze this winter.