DCLG has announced that from 2020 to 2025 housing associations are entitled to increase their rents by 1% over CPI inflation.
Sounds obscure? Housing associations (ie Registered Providers) had been facing a rent cut imposed by then chancellor George Osborne. This caused significant problems for housing association business plans as a huge proportion of their incomes comes from rent. They are nearly all charities and therefore had to trim their development programmes to account for a loss of income.
When you consider that HAs were responsible for 71% of housing starts in 2016 and that they own and rent out 10% of all English homes you can see the potential for increased development now that DCLG have confirmed that their income will not be declining.
A statement from the department for communities and local government said: “Under the proposal set out today, increases to social housing rents will be limited to the Consumer Price Index (CPI) plus 1% for 5 years from 2020. This will give social tenants, councils and housing associations the security and certainty they need.” Chartered Institute of Housing chief executive Terrie Alafat said: “This new rent settlement is good news for social housing – it provides the stability and certainty landlords need to build more desperately-needed new homes and to invest in their existing homes and services for tenants.