Social housing rent increases in 2023 – NHF submission

The NHF has responded to the government’s consultation on housing association rents. This response represents the views of our 570 member housing associations. It is based on direct engagement with over 500 people in roundtable discussions, and responses to our member survey from 140 organisations, who collectively own 1.28m homes.

This response sets out our view on the government’s proposal to apply a ceiling to social housing rent increases for existing tenants in 2023. It explains the background to this decision and housing associations’ overall approach to rent setting. It then answers the questions set out in the consultation.

NHF members can read the full submission by logging in below. The key points set out in our submission are:

• Housing associations are committed to supporting residents struggling with the cost of living and have put extensive help in place for this winter.
• Housing association boards are best placed to decide on rent increases in 2023, within the existing CPI+1% regulatory limit. They will balance affordability for tenants with capacity for investment in homes and services.
• The costs of providing services and investment in homes are rising rapidly, and the economic climate is extremely uncertain. Cost and affordability pressures, and business plans, vary significantly across our diverse sector.
• If the government does apply a cap on rent increases, it could seriously reduce investment in homes and services for residents, both next year and compounded in future. In some cases, it may affect organisational viability.
• If the government does apply a rent ceiling, it should be set as high as possibleto give boards discretion to target support below the ceiling. We state that 7% is the minimum level which would give boards discretion to target support and adapt to their organisation’s particular context.
• If the government does go ahead with a cap on rent increases it should be for one year only, given the level of economic uncertainty.
• Supported and sheltered housing should be exempt from any cap, reflecting the tight financial position in which they already operate and viability risks.
• If the government does impose a ceiling on increases it should also provide grants to support investment in homes and services for residents, to at least the level of the benefit savings resulting from any cap.

We are also asking for a commitment to reintroducing a ‘catch up’ mechanism, so that rents can gradually return to their real terms level once inflation has fallen back, preserving long term investment for residents.