Government response to consultation on social housing rents

1. This news article is of relevance to English Registered Providers of social housing including supported housing.

2. On 14 December 2022 the Department for Levelling Up, Housing and Communities published its response to a consultation on social housing rents.1Consultation outcome – Social housing rents: government response to the consultation | Department for Levelling Up,
Housing & Communities | 14 December 2022 | last accessed on 21 December 2022

3. The prior consultation closed on 12 October 2022. It sought views on a new draft direction to the Regulator which would limit rent increases to 5% in 2023-24, but also presented the options of setting the ceiling at 3% or 7% and made clear that the government were open to other percentage proposals put forward by consultees.2Government response to the consultation, paras 3-4

4. To quote from the government’s response to the consultation: 

5. “The government believes it is right to set a lower ceiling on social housing rent increases in 2023-24 – rather than allowing rents to increase by up to 11.1%”.3Government response to the consultation, para 61

6. “Having carefully considered the responses to the consultation, the government has decided that a 7% ceiling would strike an appropriate balance between protecting social tenants from high rent increases, and ensuring that Registered Providers are able to invest in new and existing social housing and provide decent homes and services to tenants”.4Government response to the consultation, para 64

7. “Having considered the responses, the government has concluded that supported housing should be excepted from the 7% rent ceiling – in recognition of the fact that supported housing typically operates at tighter margins than general needs social housing. [The government believes] that this is a sensible and proportionate measure to ensure the continued financial viability of supported housing provision, recognising its critical role in supporting some of the most vulnerable people in our society”.5Government response to the consultation, para 81

8. The government “have also taken account of the fact that the majority of supported housing tenants will have any rent increase met in full by Housing Benefit or the housing element of Universal Credit. Nevertheless, [the government urges] Registered Providers to consider setting lower rent increases where possible. Many supported housing tenants are likely to benefit from the decision to increase the State Pension, Pension Credit and disability benefits by 10.1% in April 2023. Individuals on disability benefits will receive a further £150 Disability Cost of Living Payment”.6Government response to the consultation, para 82

9. “Aside from the special circumstances of supported housing, the government does not consider that there is a sufficiently strong case for excepting other categories of social housing from the 7% ceiling – given the importance of protecting tenants from particularly high nominal-terms rent increases next year”.7Government response to the consultation, para 83

10. As this was a response to a consultation, the government also summarised the spectrum of opinions that existed amongst respondents on this particular issue.8Government response to the consultation, paras 48 to 54

11. The government’s direction required the Regulator to set a new rent standard with effect from 1 April 2023. Given the need to provide certainty as quickly as possible, the direction disapplied the usual statutory requirement on the Regulator to consult before setting its Rent Standard.9Government response to the consultation, para 97

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