Housing related government consultations Future Social Housing Rent Policy consultation

This consultation sought views on a new Direction from the Secretary of State to the Regulator of Social Housing in relation to social housing rent policy, focusing on the introduction of a new rent policy from 1 April 2026.

East Suffolk Council's response to the Future Social Housing Rent Policy consultation

1. Do you agree with our proposal that the government should set a rent policy that will remain in place for at least the next 5 years, from 1 April 2026 to 31 March 2031?

ESC response

Yes, 5 years is the bare minimum required to provide financial forecasting and provide stability to income budgets.

5 years will provide ESC with the ability to balance the needs of our existing tenants (affordability) with the demand for new homes. This will also further assist with the mid-term financial planning and 30-year HRA budget.

2. What impact would a longer settlement have, and what alternative length should a settlement be? (e.g. 7 years / 10 years?)

ESC response

A longer settlement, such as 10 years, would provide greater financial reassurance, and the ability to plan longer term for things such as stock investment and housing development. The HRA must forecast spend for 30 years, therefore, it would be much more favorable to give predictions further into the future.

A longer settlement would give providers greater financial stability and certainty to invest in their existing housing stock to ensure homes meet requirements of the Decent Homes Standard and to build more affordable housing which in turn will see a reduction in the Housing Register.

3. Would a rolling settlement of 5 years (where the 6th year is set 5 years in advance) provide additional stability or certainty?

ESC response

It would be better than a 5-year settlement only, but not as beneficial as a 10-year rent settlement but if a 10-year settlement was not an option then this would be a good 2nd option as it would provide stability and certainty for providers and would impact favourably on our ability to build.

4. What impact would these alternative lengths of rent settlement have on providers’ willingness and ability to invest in new and existing homes?

ESC response

Understanding and predicting rental income further into the future will help to understand what available funds (if any) can be invested in new and existing homes and would allow LAs to make longer term commitments regarding investing in building new homes.

5. Are there rent policy measures that would provide confidence in the stability of our policy in the event of an inflationary spike?

ESC response

Having the cap on the percentage above CPI for rent increases helps to provide some level of stability in the event of an inflationary spike. This will protect our most vulnerable tenants and help us to continue to provide affordable homes for those that need them most.

6. Are there other steps that the government should take to build confidence in the stability of its rent policy?

ESC response

The HRA is under increasing financial strain with new regulations associated with fire risk, compliance, ensuring all properties are EPC C by 2030, along with improving services to tenants. This combined with increasing running costs, is not sustainable in the long run with no funding from government, and only being able to increase rents by CPI + 1% each year.

Many if not most of our tenants on a social rent are below the Formula rent value. For the HRA to invest in its properties as required, rent convergency needs to be reinstated. This ideally would be at the same level as previously, where rents can be increased by CPI + 1% + £2 per annum for rent convergence, until they hit, not just formula rent, but formula rent + flexibility. The HRA misses out on approximately £2 million a year through rents being charged less than the formula rent + flexibility value. This additional rental income would make a huge difference in reinvesting in our existing stock and potentially delivering more social housing.

7. Do you agree with our proposal that rents should be permitted to increase by up to CPI+1% per annum?

ESC response

Yes, if this was combined with Rent convergence.

8. What do you consider would be the impact of our proposed rent policy on affordability for rent payers and the willingness and ability of registered providers to invest in new and existing homes over the next 5 years?

ESC response

The rent policy alone is not enough to encourage registered providers to invest more in existing and new properties, it only covers the increasing running costs of the day-to-day services. Rent convergence would be the only additional measure that could encourage this.

Affordability for tenants is linked to other areas such as welfare policy in respect of benefits, minimum wage, local housing allowance rates and much more.

The rent policy requires balance, and CPI+1% provides this relatively.

9. Do you have views on other measures, outside rent policy, that could help to rebuild registered providers’ capacity to invest in new and existing homes?

ESC response

  • Rent convergence (most important to increase investment)
  • 10-year settlement plan
  • Greater access to funding and schemes via Homes England
  • Greater support to change the purpose of existing homes – MOD to social housing
  • More incentive for providers to repurpose former retail / office space into much needed social homes.
  • Increased AHP grants
  • Provide subsidies/grants for decarbonisation based on stock levels rather than having to bid for it
  • Government backed low interest loans for development/regeneration.
  • Simplified planning approval process for affordable housing
  • Tax incentives - lower VAT rates for repair/retrofit work for existing stock.
  • Training and development to address skills shortages in the housing sector
  • Stop RTB - or reduce discounts, prevent new builds being eligible for RTB

10. Do you have any comments on the detail of the draft direction and policy statement that are not covered by your responses to the previous questions?

ESC response

No further comments.