Social Rent –7% restriction on rent increases for social housing tenancies in 2023 Here at Support Solutions UK, we like to keep our followers and clients up to date with latest industry news. Our December briefing takes a look at Social Rent and the Regulator's recent decision to apply a 7% restriction on rent increases for social housing tenancies in 2023. Importantly supported housing is exempt from the 7% rent increase and can still apply CPI + 1%, which is 11.1% in total. What is Social Rent and how does it work? Around four million families live in the social rented sector. This is almost one-fifth of households in England. Social housing is provided by either housing associations (not-for-profit organisations that own, let, and manage rented housing) or the local council. As a social tenant, you rent your home from the housing association or council, who act as the landlord. Social housing aims to be more affordable than private renting and provide a more secure, long-term tenancy. Social homes are the only type of housing where rents are linked to local incomes, making these the most affordable homes in most areas across the country. Rents for social homes are significantly lower than private rents. Rent increases are also limited by the government, which means homes should stay affordable long-term so people aren’t priced out of their communities by rising rents. Social housing should be there for anyone who needs it. At present, the law states who is entitled to social housing and should get preference on the waiting list. But councils have lots of flexibility on who qualifies locally and social landlords can refuse to let to people if they so choose. People in social housing usually have secure tenancies, giving them greater protection from eviction and enhanced rights compared to those renting privately. They provide the foundation people need to get on in life, meaning families can put down roots, plan for the future and make their house a home. How is Social Rent set? In 2019, the government set a rent policy for social housing that would permit rents to increase by up to CPI plus 1 percentage point (‘CPI+1%’) per annum, and made clear its intention to leave this policy in place until 2025. We are however living through exceptional times and when the current rent policy was set in 2019, inflation was forecast to be around 2% in 2022 and 2023. In July 2022, CPI was 10.1%. If CPI remained at or above this level in September, this would permit social housing rent increases from 1 April 2023 to 31 March 2024 of 11.1% or more. This is much higher than expected rate of inflation and is already placing considerable pressure on many households, including those living in social housing. Registered Providers of social housing (‘Registered Providers’) were obviously concerned about these pressures on their residents and came together on how the sector should respond. In the face of these exceptional challenges, the government thought that there was a strong case for making a temporary amendment to the CPI+1% policy for 2023/24 in order to provide a backstop of protection for social housing tenants from significant nominal-terms rent increases. The government decided to consult on a new Direction from the Secretary of State to the Regulator of Social Housing (‘the Regulator’) on social housing rents. This Direction would operate alongside the Direction on the Rent Standard 2019 issued on 26 February 2019 (‘the 2019 Direction’). The intention of this new Direction would require the Regulator to amend its Rent Standard so that the current CPI+1% limit on annual rent increases would be subject to a ceiling from 1 April 2023 to 31 March 2024. Registered Provider is allowed to implement. Registered Providers would be permitted to increase rents by 5% or CPI+1%, whichever is the lower. However, within this consultation, we are seeking views on 3%, 5% and 7% as ceiling options, and we are also 7% Social Rent Cap 2023/24 The Department for Levelling Up, Housing and Communities (DLUHC) had floated that social rent increases could be capped as low as 3%, however, setting the rent cap at 7% will come as a huge relief to registered providers and prevents a potentially apocalyptic scenario for some.
Meet our highly skilled and experienced team of experts.
Danny Key BA MCIH – Director
Danny has successfully assisted numerous organisations in significantly increasing their proper housing and support revenue entitlements. This includes constructing claims, undertaking appeals, rent setting, review and reallocation. He has been extraordinarily successful in optimising organisations’ finances and improving the quality, cost-effectiveness and efficiency of their Housing Benefits revenue management.
He is increasingly recognised as a national authority on Housing Benefits Regulations and has appeared for clients at numerous Tribunals and Social Security Commissioner’s hearings.
Danny is increasingly involved in work with private capital providers investing in supported and sheltered housing.
Kris Key BSc – Revenue Consultant
Kris has particular expertise in Housing Benefits Regulations and the optimisation of revenue streams in general. He provides a significant element of the “back office” work associated with Housing Benefits optimisation. Kris has strong IT and technical skills which are geared to the needs of our sector.
Steven Walton MBA
Steven is a focused and innovative Housing Consultant with a demonstrated history of working in the Social Housing sector for approximately 18 years. Specialising in Housing Management, ASB and Neighbourhood Safety Management and Older Persons Housing and Care Services.
Steven also advises on the structural compliance of Supported Housing arrangements, rent setting and liaising with the local Housing Benefit Administration Authority.
Liam Bradley LL.B PG Dip – Legal Representative
Liam has previously worked for a housing and welfare benefits charity providing free legal advice on debt, housing and welfare benefit issues. He has successfully defended many clients in possession proceedings concerning tenants in local authority accommodation and applications involving mortgage providers. He also has significant experience in negotiation and a strong belief that it is better to achieve the right outcome through consent as a first resort.
Liam has worked as a consultant to a number of housing associations and their providers of supported accommodation. He has also successfully represented landlords at Residential Property Tribunals in relation to Licensing of Houses in Multiple Occupation, Prohibition Orders and Improvement Notices in proceedings against local authorities.
Liam also has significant experience in representing individuals and landlords for housing benefit appeals in the Social Entitlement Chamber with a strong focus on appeals concerning “exempt accommodation”.