The Department of Levelling Up, Housing and Communities (LUHC) has launched a consultation on capping social rent increases for 2023/24.
The current Rent Standard allows providers to increase social rents by a maximum of the Consumer Prices Index (CPI) plus 1% each year. The CPI used in the formula is CPI for the September in the previous financial year, so the maximum increase in 2023/24 would normally be CPI for September 2022 plus 1%.
The most recently published CPI for July 2022 was 10.1%, raising the spectre of social rent increases in the region of over 11% next year, at a time when many residents in social housing are struggling financially to cope with rising prices, particularly in relation to energy costs.
The consultation proposes capping rent increases at 5%, but LUHC is also interested in views on caps of 3% and 7%. Some providers have said that capping rent increases at 5% would threaten their financial viability.