Government says it wants to ”take time to get the precise details right”
The government will announce its decision about how social housing rent convergence is implemented in January, it has confirmed.
In the Autumn Budget documents today, the Treasury confirmed it remains committed to re-introducing the policy, which would allow cheaper social housing rents to rise more quickly to ensure alignment between similar properties.
But it said it wants to take time to get the policy right.
“While the government remains committed to implementing social rent convergence, it is important to take the time to get the precise details right, taking account of the benefits to the supply and quality of social and affordable housing, the impact on rent payers and affordability”, the Treasury said.
The government said it will respond to the consultation “in full” and announce a decision before the launch of the £39bn Social and Affordable Homes Programme.
The government consulted in the summer on its plans to re-introduce the policy, which was announced in the June spending review as part of a package to boost affordable housing.
The scrapping of the policy in 2015 has been estimated by the G15 group of housing associations in London to have cost its members £2bn.
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Opinions have differed across the social housing sector on the amount over and above CPI-plus-1% social landlords should be permitted to increase rents on properties that are below formula rent. The government’s consultation paper asked for views on whether weekly rents should be able to increase by a cash limit of £1 or £2 a year.
The National Housing Federation, London Councils and the G15 group of housing associations have all called for convergence with a £3 uplift, but the Northern Housing Consortium has called for a £2 uplift. The Chartered Institute of Housing has called for £2, but only if it is alongside government support to help the sector meet new regulatory requirements.
Elsewhere in the Budget today, the government confirmed it is scrapping the two-child limit in Universal Credit from April. The government said this would “lift 450,000 children out of poverty”.
The government also said it consult on the “reform of VAT rules to incentivise the development of land intended for social housing.”
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