NHF continues to call on the government to introduce a 10-year rent settlement

The government has announced the current rent settlement for social landlords in England will be extended for a further year.

The Department for Levelling Up, Housing and Communities (DLUHC) this week confirmed councils and housing associations will be able to increase their social housing rents by September’s Consumer Price Index figure plus 1% in 2025/26.

Rhys Moore

Source: NHF

Rhys Moore, executive director of public impact at the National Housing Federation says the social housing sector needs a 10-year rent settlement to create stability and support investment in homes and communities. 

This follows on from the maximum increase of 7.6% permitted in 2024/25.

The National Housing Federation welcomed the confirmation of the 2025/26 settlement, saying it provides “much needed certainty to April 2026” and enables “housing associations to deliver for current and future residents.”

However, the NHF re-iterated its call for a 10-year rent settlement to give greater financial certainty for tenants and landords.

An NHF spokesperson said that for RPs this is particularly important considering the added expenses associated with the new consumer standards which came into effect this week.

Before the spring budget, London’s largest housing associations, collectively known as the G15, called on the government to introduce a 10-year index-linked rent settlement and to reinstate rent convergence.

Housing Today’s A Fair Deal for Housing campaign has also called on the government to consider a longer-term rent settlement - predicated on a greater level of capital investment - as part of a review to boost affordable housing development to 100,000 homes a year.

>> See also: NHF calls for social housing development funding overhaul

>> See also: G15 urges government to commit to a 10-year rent settlement in the spring budget

Rhys Moore, executive director of public impact at the National Housing Federation, said: ““We’ve been working closely with government to ensure they understand the importance of stability in supporting investment into homes and communities. Ahead of the election, we will continue to make the case to all political parties for a long-term plan for housing, including a new 10-year rent settlement.”

In 2020, a five-year rent settlement was introduced. However, this was altered in 2022, due to the cost of living crisis and inflation increases.

As a result, the chancellor Jeremy Hunt capped rent increases for general needs properties at 7% in November 2022, well below CPI + 1%.

While the move was supported by the sector, analysis presented by the Chartered Institute of Housing found that a 7% cap on rent rises would have a potential impact on operating expenditure of between 5-7% for local authorities and 3-5% for housing associations.

There was also break from the rent settlement between 2016/17 and 2019/20, when a 1% rent reduction was introduced.

Jim Lashmar, director at housing consultancy Altair,  has previously written about this issue, arguing that breaking away from the settlement not only affects RPs but also has an impact on how important stakeholders in the sector, such as lenders, investors, and rating agencies, view the sector.

DLUHC is set to consult on future social housing rent policy, however, no date has yet been set for this.

With the general election set to take place in early 2025 and the current rent settlement in place until April 2026, it will be down to the next government to determine future rent settlements.