Social Housing Rent Increases to be Capped at 7%

Daniel Milnes
Daniel Milnes

Published: November 17th, 2022

7 min read

The Government has today (17 November 2022) announced that a seven percent cap shall be applied to increases to social housing rents next year.

The Regulator of Social Housing's Rent Standard, published in April 2020, provides for social housing rent to be subject to an annual increase of CPI plus 1% However, with inflation soaring the application of this formula could have resulted in rents across the sector increasing by approximately 11%. To mitigate the financial impact on tenants the Government has stepped in and has placed a cap on any such increases.

While the cap is not as dramatic as the 5% which had been touted in the later summer, it has the potential to have a considerable impact on social landlords' budgets. Questions have been raised as to the effect that the cap may have on the financial viability of small / medium sized associations and how it might influence investment in existing stock or funding for new homes. . It is of interest that supported housing has been exempted from the cap. It is expected that such a move will ensure the viability of care and support for those access such services.

From a practical perspective, those setting rent for the 2023-2024 period should ensure that the correct formula is applied when calculating any increases. Failure to adhere to the cap or errors applying the formula rent methodology could have a detrimental effect on the RPs financial and governance rating. Providers of Social Housing may wish to consider how they might set service charges or rely on the rent flexibility levels (as outlined in the Rent Standard) to lessen the impact on finances.

Forbes are continuing to monitor the ever-changing landscape and will provide further updates to our client's as the impact of the cap becomes apparent.

If your organisations would like assistance or advice on the setting of social housing rent, including review of your standard rent review template letters and notices, please do not hesitate to get in touch.


For further information please contact Daniel Milnes

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