G15 calls for return to rent convergence along with 10-year index-linked settlement

Rent convergence is a former policy introduced by the Labour government in 2002, which sought, over an initial 10-year period, to bring rents within equivalent social housing properties into alignment with each other.

Through this mechanism, rents paid by existing tenants moved towards formula rents (based on local property values and local earnings relative to national earnings) so that people in similar properties and areas should pay a similar rent. The policy continued under the coalition government, with a revised target ‘convergence date’ of 2015-16, however this was later superseded by the 10-year CPI-linked rent rise, which itself was cut short when the government announced four years of rent cuts (at one per cent annually) from 2016-17.

Alongside its asks on rents, the G15 called for an updated Decent Homes Standard “with funding to deliver” it, as well as for the remainder of the Social Housing Decarbonisation Fund (SHDF) to be awarded.

On new development, the group said that the duration of the Affordable Homes Programme should be doubled, to provide greater funding predictability. The current programme covers a five-year period, with starts on site expected from 2021 to 2026 and completions by 2028 for most projects.

The G15 also asked for funding through this programme, and the SHDF to be index linked, “to account for current and future cost inflation”.

There should also be an extension of the Building Safety Fund (which is currently available to leaseholders) to apply to affordable rented homes, it added, and VAT relief should be made applicable to repairs.

Ms Fletcher-Smith said: “Last year, members invested £1.5bn into repairs and maintenance, equivalent to over £2,000 per home, and it’s likely that this figure will be even higher this year. In addition, we will be investing at least £4bn to deal with the building safety crisis and estimate it will cost at least £11bn to meet net zero by 2050.

“This is putting enormous pressure on our capacity and so we are calling for VAT to be removed from housing association activity. The irrecoverable VAT for just one G15 member is £30m per year – money that we could be investing in homes.”

Finally, the group asked for welfare reform to support its customers during the ongoing cost of living crisis.

Ms Fletcher Smith said: “The Spring Budget is an opportunity to grasp the potential of investing in our homes. This will mean we can finally start to imagine a future where everyone has a place to call home, in a community that supports them to live well.”