Amidst the cost-of-living crisis, the UK government are proposing a rent cap on the rising cost of rent for social housing. Now you may be asking, “but what does this mean for me?”, and we’re here to explain. It means that the Department for Levelling Up, Housing and Communities (DLUHC) have launched a consultation to discuss the options for the cap.
Social housing tenants and landlords have been brought together to discuss the cap and to make sure that both parties are fairly affected by the outcome. At the minute, suggestions for the cap are 3%, 5%, and 7%.
Once the cap is decided upon, it will be put in place for the coming financial year and will aim to support tenants with the cost of living.
Why Are The Government Proposing This Rent Cap?
Currently, social landlords can increase the cost of rent in line with the Consumer Price Index (CPI), plus 1%. The Consumer Price Index refers to the metric used to measure the inflation of consumer prices, and in July 2022, this was 10.1%. This means that next year, the rent increase for social housing could be as much as 11.1%, which is why the government are proposing the cap to support the most vulnerable households with the cost-of-living pressures.
What Differences Would New Rent Cap This Make?
By putting a rent cap in place, the government would prevent rents for council and housing association houses from rising significantly. The rent cap could help households save a lot of money, for example, if the rent cap is 5%, this could save tenants an average of £300 per year and could provide them with some stability as inflation continues to rise.
How Do Scotland’s Government’s Plans Differ?
Scotland’s First Minister Nicola Sturgeon has slightly different plans in light of the rising cost of rent. These plans include an immediate freeze on rent, and the temporary prohibition of evictions, aiming to give people some security about the roof over their heads. These plans also differ to the UK’s as they include social housing as well as private tenants.
Nicola Sturgeon says that these measures will stay in place until at least the end of March next year.
When Will The Rent Cap Be Announced?
The consultation on the cap began on August 31st this year and will continue for a 6-week period, ending on October 12th. Following this, the Secretary of State will direct the Regulator of Social Housing on the decision and will confirm the amount that social housing landlords can increase rents by for the period between 1 April 2023 to 31 March 2024.
If you are looking for social housing, see what housing association properties are available now.
