Efforts to make social housing safer, greener and more livable will be significantly delayed if ministers cap rent rises at 5% next year, according to landlords who fear the move would cost them £3.5bn over the next decade.
Projects to make housing blocks safe after the Grenfell Tower disaster are among those that will be slowed down, according to a coalition of housing associations based in London, if the proposed plan to protect millions of England’s poorest households from soaring rents is confirmed.
The G15 group, which includes big social housing providers Clarion, L&Q and Peabody, are instead arguing that Liz Truss’s government must increase benefits in line with inflation so neither tenants nor landlords are hit.
They also warn that if their rental income is capped the number of badly needed low-cost homes they can build will be significantly reduced and that projects to replace decrepit kitchens, bathrooms and windows will be put on ice.
A government consultation on the rent cap plan concludes on 12 October. Three options of capping rents at 3%, 5% and 7% have been floated, with ministers’ preferred option being a 5% cap. Normally social rents rise in line with the consumer price index (CPI) measure of inflation, which was running at 8.6% in the year to August.
“The issues we are looking to balance are some of the most challenging I have seen, or had to grapple with, in the 30 years I have worked in housing,” said Geeta Nanda, the G15 chair, and chief executive of Metropolitan Thames Valley Housing. “We are approaching this with a commitment to continuing to provide good, safe and affordable homes that help people to live well. However, as anyone can see, there are real risks that need to be carefully considered, alongside ensuring residents are supported in the face of the cost of living challenges many face.”
About 4.4 million households live in social housing in England, including many who have shared ownership arrangements that will not be covered by the rent cap. The G15 landlords say they do not want to apply the maximum possible rent increases to shared ownership tenants, but that position will be tested if their rental income from other forms of social housing is not protected or reimbursed. As well as backing an inflation-level uplift in universal credit, the group is proposing the government provides increased grants and removes VAT on works on social housing estates.
A spokesperson for the Department for Levelling Up, Housing and Communities said: “We know that families are worried about the months ahead and we are consulting on whether social housing rents should be capped next year to protect tenants from significant rent increases.
“We are working with the sector and inviting views from landlords on how best to help social housing tenants through these challenging times.”
