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.
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.
Budget at a glance
- Freeze on national insurance thresholds extended for three years from 2028
- Legal minimum wage to rise in April by 4.1% for over 21s and by 8.5% for 18 to 20-year-olds
- Plans to converge two rates of landfill tax halted
- £13bn funding for seven regional mayoralties
- “Mansion tax” of between £2,500 and £7,500 for properties valued over £2m.
- OBR upgrades growth forecast from 1% to 1.5% but downgrades productivity
- Fiscal headroom doubled to £22bn
- Social housing rent convergence details to be announced in January
- The two-child limit in the Universal Credit child element will be removed from April 2026
- Extra £48m of funding to boost capacity in planning system by recuriting 350 extra planners by expanding the Pathways to Planning Graduate Scheme and creating a new Planning Careers Hub
- £783 million for a new local growth programme over three years to support regeneration across Scotland, Wales and Northern Ireland.
- Additional £1.5 billion in capital investment to tackle fuel poverty through the Warm Homes Plan
- Funding for the Energy Company Obligation will end after March 2026
- £1.5 billion of new funding to support households facing fuel poverty
- Consultation on the “reform of VAT rules to incentivise the development of land intended for social housing.”
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”.
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The government also said it consult on the “reform of VAT rules to incentivise the development of land intended for social housing.”
The Budget also confirmed an additional £1.5 billion in capital investment to tackle fuel poverty through the Warm Homes Plan, in addition to the £13.2 billion of funding allocated in the summer spending review.
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