The Office for National Statistics recently published inflation figures for September 2023. Tenants and residents living in housing association and council homes across the country will pay careful attention to this announcement. It is likely to be used as a basis for their April 2024 rent levels – and it is high.
With inflation stubbornly stuck at 6.7%, the standard government formula will translate into rent rises of 7.7% for the majority of tenants and residents in housing association and council homes.
The Social Rent Cap
The amount that housing associations can raise social rents (which are nominally up to 50% of market rent levels) is decided by government every November based on the September inflation figure which is published in October. This is the Social Rent Cap.
The laughing Chancellor: Jeremy Hunt decides the social rent cap level
In 2022, the formula for the cap was based on the Consumer Price Index figure (CPI) plus 1%, which is why the latest inflation announcement is significant.
The cap applies to certain types of sub-market rents, but not all. However, many housing associations apply the cap across the majority of rent types for ease of processing.
An Exceptional Year
In 2023, inflation was running at record levels. The standard formula would have meant increases of around 15% or more to be applied from April 2023. It would have been catastrophic for many tenants and residents.
Image: Housing Today, November 2022
Government gathered views on rises of 3%, 5%, and 7%, eventually settling on 7%. The decision was announced as part of the Autumn budget statement in November 2022. There is no cap on the amount housing associations can charge for services, and we know that some were hiked by hundreds of percent.
Unfair and Uncapped
We believe that SHAC and other campaign groups played a leading role in constraining the rent rise level for social renters and shared owners, including through our use of the bold threat of rent strikes.
This year, we launched Unfair and Uncapped, a campaign which demands that government freezes rents and caps service charges.
Central to the campaign is a request for everyone to sign our pledge. The pledge is a commitment to either withhold payment of the annual rent and/or service charge increase, or to support those who do. So far, more than 700 have signed up.
But this alone is not all. SHAC and several other housing campaign groups are gathering to protest at the Affordable Housing Awards on the 17th November in Manchester.
Housing associations collectively hold an operating surplus of £4.4 billion, and do not need to raise rents or service charges. We will turn the spotlight on unaffordable rents as they enjoy a free meal and drinks on their rent-payers’ (and taxpayers’) money.
23 October 2023
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