The Regulator of Social Housing (RSH) has launched a consultation into a revised Rent Standard, to come into effect from April 2020, regulating for the first rent rises in four years.
The 12-week consultation follows the government’s Direction to the RSH in February, which confirmed that it will permit annual rent increases of up to one per cent above the Consumer Price Index (CPI) from 2020.
The February directive also stated that the new Rent Standard will apply to stock-owning local authorities for the first time, where previously it covered only housing associations or for-profit registered providers.
The new regulation will replace the current Rent Standard, issued in 2015.
The Ministry of Housing, Communities and Local Government first announced plans in October 2017 to permit registered providers to increase rents on social rent and affordable rent properties by up to CPI+1% each year from 2020, for a period of at least five years.
In August 2018, the government launched a consultation on its proposed direction to the RSH concerning social rents from 1 April 2020 onwards, which closed on 8 November. On 26 February it published the results of that consultation and its response.
The government’s Direction to the RSH also instructs for “rent flexibility” on formula rents (a government-set calculation for a property’s rent based on relative property values and local earnings) for social housing properties.
This “flex” means that the rent set on a property may include an upwards tolerance of five per cent of formula rent for general needs stock and 10 per cent for supported housing providers – allowing registered providers “discretion over the rent set for individual properties, taking into account local circumstances and affordability in consultation with tenants”.
The RSH’s consultation on the new Rent Standard will remain open until 30 July 2019.
Commenting on today’s launch, Fiona MacGregor, chief executive of the RSH, said: “This consultation focuses on whether we have appropriately reflected the government’s Direction to us. The Direction itself has previously been consulted on by government. Our aim is to ensure that the setting and management of rents is clear and easy to understand for all registered providers of social housing.
“The long-term rent settlement should help provide a stable financial environment for the social housing sector to make the best possible use of its resources in supporting the delivery of new homes and effectively managing and maintaining properties, while protecting the interests of social housing tenants.”
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