Rent cap at five per cent would cost landlords £7.4bn, official figures show

Of this, £4.9bn would come from housing associations and £2.5bn from local authorities. 

Meanwhile, a three per cent rent cap would result in £9.9bn in lost rental income for registered providers, £6.5bn from housing associations and £3.4bn from councils, the modelling shows. Registered providers would lose £1.8bn next financial year in this scenario.

And a seven per cent rent cap would cost RPs £4.9bn over the next five years, comprising £3.2bn from housing associations and £1.7bn from local authorities. Next year alone, £900m would be lost in rent, the figures have shown.

The government has said that a five per cent cap is its preferred option. 

DLUHC said a five per cent cap would strike an “appropriate balance” between protecting social housing tenants and ensuring social landlords can increase rents to mitigate some of the impact of rising costs. 

Housing associations and councils have been reacting to news of plans to set a temporary cap, with one chief executive warning that “government has to be careful of the consequences”.

Housing associations have already been contemplating how much they should raise rents next year and modelling a number of scenarios.