Ministers propose ‘at least’ five-year rent settlement as consultation unveiled

Elsewhere in the consultation, MHCLG said it will consult on a proposed new Decent Homes Standard in early 2025 and “consult shortly” on energy efficiency targets for the sector.

The government also said it will direct the Regulator of Social Housing (RSH) to introduce a new competence and conduct standard, and requirements for providers to meet new access to information requirements, in early 2025.

It added that it will also bring forward legislation for Awaab’s Law in social housing, so that hazards such as damp and mould must be investigated and remedied to set timescales.

The consultation is open until 11.45pm on Monday 23 December.

“The government has committed to the biggest increase in social and affordable housebuilding in a generation,” MHCLG said in its consultation.

“We are also committed to ensuring that people renting homes in both the social and private rented sectors can live in safe and decent housing.

“It is therefore vital that our rent policy for social housing gives registered providers the stability they need to borrow and invest in new and existing homes, while also ensuring that there are appropriate protections for existing and future social housing tenants. These aims underpin the rent policy we are proposing in this consultation.”

Permitted rent increases of CPI plus one per cent have been in place since the current five-year rent standard was introduced in 2020-21, with the exception of 2023-24 when the government intervened with a rent cap of seven per cent.

Rents are currently permitted to increase by CPI plus one per cent in 2025-26 based on the September 2024 CPI figure, after the previous government extended the current settlement by one year in April. Rent increases will be permitted at up to 2.7 per cent after CPI rose by 1.7 per cent in the 12 months to September.

‘Difficult choices’

MHCLG said that setting a rent policy “inevitably involves difficult choices”.

It said there is a need to balance the interests of tenants who would benefit from improvements to the supply and quality of social housing supported by higher rents, and tenants whose disposable income would be adversely affected by this.

These choices have become “even more difficult” because of the cost of living pressures that households have been facing and the fact that the overall financial position of registered providers has weakened over recent years, the consultation said.

Consultations on Decent Homes Standard and energy efficiency targets

The government also said in the consultation that it will consult on a proposed new Decent Homes Standard (DHS) in early 2025.

“This will aim to ensure that safe, secure housing is the standard tenants can expect in both social and private rented properties,” the government said.

MHCLG said it envisages that its proposed new DHS would introduce additional requirements relating to the state of repair of homes, new requirements on damp and mould, and new requirements regarding the safety and security of homes.

“We are committed to ensuring implementation timescales for any additional requirements are reasonable and will seek views on this as part of the consultation,” the government said.

This comes after the government said in September that it would consult “as soon as possible” on a new DHS for the rented sectors.

The government added that it will also “consult shortly” on its plans to introduce minimum energy efficiency standards for social rented sector homes that could require social housing to meet Energy Performance Certificate Band C or equivalent by 2030.

“Subject to their final design, these requirements could oblige registered providers to invest more in their existing homes,” the government said.

The government said it will set out further details in the consultations to follow, and over the coming months will work with the sector before consulting.

Competence and conduct standard and access to information requirements  

Elsewhere in the consultation, the government confirmed that it will direct the RSH to introduce a Competence and Conduct Standard, and requirements for providers to meet new access-to-information requirements, in early 2025.

This follows a consultation in February on this Competence and Conduct Standard. This proposed that social housing providers with more than 50 homes will have up to two years to ensure staff in scope of the rules are trained or working towards a qualification.

The government also consulted on new requirements for access-to-information requests in May. Within this, it estimated that the new transparency powers for tenants will cost the sector an estimated £1.8m in requests for information to private registered providers in the first year alone.