Consultation outcome

Outcome to consultations on future social housing rent policy and Social Rent convergence

Updated 28 January 2026

Chapter 1: Introduction

On 30 October 2024, the Ministry of Housing, Communities and Local Government launched a consultation on a proposed direction from the Secretary of State to the Regulator of Social Housing (‘the Regulator’) in relation to future social housing rent policy. It focused on the introduction of a new policy from 1 April 2026.

We consulted on whether a 5-year settlement would provide the sector with the confidence to commit the level of investment that is now needed in both new and existing social homes. We also asked questions about alternative lengths of settlement and other rent policy measures that might provide confidence in the government’s social housing rent policy. We then sought views on whether social housing rents should be permitted to increase by up to CPI+1% each year and what impact that would have on affordability for rent payers and the willingness and ability of registered providers (which includes private registered providers and local authorities) to invest in new and existing homes.

This consultation closed on 23 December 2024. See the consultation paper.

At the Spending Review on the 11 June 2025, government confirmed that social housing rents would be permitted to increase by CPI+1% each year from April 2026. We also announced that we would consult on how a Social Rent convergence mechanism should be implemented.

The consultation on how to implement Social Rent convergence was published on 2 July 2025. This sought views on an updated proposed direction to the Regulator.

We consulted on how Social Rent convergence should be implemented, including whether weekly rents should be permitted to increase by either £1 or £2 over and above CPI+1% until they converge with formula rent, and what these options would mean for investment in new and existing stock, and affordability for social housing tenants. We then sought views on when Social Rent convergence should be available during the period of the 10-year rent settlement.

This consultation closed on 27 August 2025. See the consultation paper.

We have considered all of the responses received to both consultations. This document summarises the responses received and sets out the government’s response to these consultations.

We are grateful to the organisations and individuals who took the time to respond.

Copies of this document are available via the html print button.

Enquiries about the document should be addressed to: socialhousingrents@communities.gov.uk

Part 1: Summary of responses

Consultation on future social housing rent policy (published 30 October 2024, closed 23 December 2024)

We received a total of 368 responses to the consultation.

32% of responses were from individuals and tenant organisations; 60% were from registered providers of social housing (33% from private registered providers and their representative bodies and 27% from local authorities and their representative bodies); 2% were from other bodies involved in the provision of management of social housing; and 7% were from other organisations.

The table below sets out a breakdown of the respondents.

Type	Number of responses
Individuals	95
Bodies representing the interests of tenants of social housing	21
Private registered providers of social housing (including housing associations, almshouses and others) and representative bodies	120
Local authorities (or bodies representing the interests of local authorities)	101
Other bodies involved in the provision or management of social housing	6
Other organisations (including charity, legal and finance organisations)	25
Total	368

For the purpose of this response, we have grouped the respondents into 3 categories:

• registered providers of social housing (‘RPs’), which includes local authorities (‘LAs’), private registered providers (‘PRPs’) and their representative bodies (221 responses)
• individuals and tenant organisations (116 responses)
• other organisations, which includes “other bodies involved in the provision or management of social housing” and “other organisations” (31 responses)

Some respondents did not answer every question. As such, the number (and percentage) of answers to the questions often differ from the total number of responses received.

Responses to the questions 

Question 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 five years, from 1 April 2026 to 31 March 2031?

This question received a total of 352 responses, which included 216 RPs and their representative bodies, 111 individuals and tenant organisations, and 25 other organisations.

252 out of 352 (72%) respondents to this question agreed to a rent policy remaining in place for at least the next 5 years. 189 of 216 (88%) RPs and their representative bodies agreed, 48 of 111 (43%) individuals and tenant organisations and 15 of 25 (60%) other organisations. Where RPs and other organisations have agreed, the most common reason given was that it would provide financial stability; supporting business plans and investment decisions and giving confidence to lenders and investors. Where individuals and tenant organisations agreed, one similar argument given was that it would provide predictability for tenants and help with budgeting.

25 out of 352 (7%) respondents to this question believed that rent policy should last for a fixed term of five years. 14 of 216 (6%) RPs and their representative bodies agreed to a fixed five-year settlement, 9 of 111 (9%) individuals and tenant organisations and 2 of 25 (8%) other organisations. The most common reasons given were that anything longer than five years was too inflexible to changing economic conditions and that a settlement longer than five years would not last in light of political uncertainty and historic interventions.

61 out of 352 (17%) respondents to this question disagreed with a rent policy remaining in place for at least the next five years. 13 of 216 (6%) RPs and their representative bodies disagreed, 43 of 111 (39%) individuals and tenant organisations and 5 of 25 (20%) other organisations. Where RPs and other organisations disagreed, this tended to be because they advocated for a minimum rent settlement of at least 10 years. As a result, some proponents of a longer 10-year settlement have been counted as agreeing with the proposal, and others as disagreeing with the proposal. A summary of responses to Question 2 provides further insight as to the balance of opinion on this issue. Where individuals or tenant organisations disagreed, one reason given was that five years was too inflexible, with rent policy needing to be responsive to changing economic conditions and tenant circumstances.

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

This question received a total of 327 responses, which included 210 RPs and their representative bodies, 95 individuals and tenant organisations, and 22 other organisations.

206 out of 327 (63%) respondents to this question supported a settlement of longer than five years. This included 167 of 210 (80%) RPs and their representative bodies, 22 of 95 (23%) individuals and tenant organisations and 17 of 22 (77%) other organisations. 156 respondents proposed a settlement of 10 years, whether it be fixed or rolling. Similar to Q1, the most common reason was that it would provide financial stability; supporting business plans and investment decisions and giving confidence to lenders and investors. Some respondents argued that a 10-year settlement would result in higher valuations, meaning less upfront subsidy is required per affordable home, supporting the supply of new homes. Lastly, one explanation stated that it would reinforce investors’ confidence in the government’s policy on affordable housing and specifically funding of the sector, in the sense that it would be more similar to infrastructure projects.

However, of the 206 respondents to this question that supported a settlement of longer than five years, 56 raised concerns around the durability of a longer settlement, in particular due to political uncertainty with a longer settlement spanning two parliaments and historic interventions in rent policy. Some of them called for assurances that government would not intervene, suggesting cross-party agreement that would extend across two governments and legislation that would underpin any long-term rent settlement (and make it more difficult for a government to overturn).

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

This question received a total of 337 responses, which included 208 RPs and their representative bodies, 108 individuals and tenant organisations, and 21 other organisations.

186 out of 337 (55%) respondents to this question agreed that a rolling settlement of five years would provide additional stability or certainty compared to a fixed settlement of at least five years. 138 of 208 (66%) RPs and their representative bodies agreed, 33 of 108 (31%) individuals and tenant organisations, and 15 of 21 (71%) other organisations. Similar to Q1 and Q2, the most common reason given was that it would provide financial stability; supporting business plans and investment decisions and giving confidence to lenders and investors. Some respondents went further by arguing that it would provide more flexibility than a fixed settlement, allowing government to be more responsive to changing economic conditions and avoiding the uncertainty of a cliffedge at the end of a fixed settlement.

Of the 184 respondents that agreed that a rolling settlement of five years would provide additional stability or certainty compared to a fixed settlement of at least five years, only 19 respondents stated it was their preferred policy option. The majority still favoured a longer fixed settlement of 7 or 10 years.

71 out of 337 (21%) respondents to this question disagreed that a rolling settlement of five years would provide additional stability or certainty compared to a fixed settlement of at least five years. 29 of 208 (14%) RPs and their representative bodies disagreed, as well as 40 of 108 (37%) individuals and tenant organisations and 2 of 21 (10%) other organisations. Many of the reasons given focused on the benefits of a settlement longer than five years and the certainty that provides. However, some respondents argued that a rolling five-year settlement would create more uncertainty with the rent settlement being reviewed annually.

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

This question received a total of 306 responses, which included 203 RPs and their representative bodies, 86 individuals and tenant organisations, and 17 other organisations.

182 out of 306 (59%) respondents to this question stated that these alternative lengths of settlement would support investment in both new and existing homes. This included 159 of 203 (78%) RPs and their representative bodies, 12 of 86 (14%) individuals and tenant organisations, and 16 of 17 (94%) other organisations. Where RPs and other organisations supported this argument, the most common reasons given were: (1) it would support business plans by providing certainty over future streams of rental income, which in turn would give providers more confidence to invest in larger schemes and over a longer period of time, as well as invest in supply chains and internal capacity, and (2) give confidence to lenders and investors by reducing their risk, which in turn could result in cheaper debt and reduced return requirements. Where individuals and tenant organisations supported this argument, they tended to focus on the benefits these alternative lengths of settlement would provide for business planning.

Of the respondents that stated that these alternative lengths of settlement would support both investment in new and existing homes, a large proportion argued that this would not be enough to actually commit to and deliver investment and/or there were other important factors that were ultimately needed. These other important factors included certainty around the durability of the rent settlement, convergence for Social Rent properties with rents below formula, capital funding and revisiting the Housing Revenue Account (HRA) settlement for local authorities.

25 out of 306 (8%) respondents to this question stated that these alternative lengths of settlement would not support/have little impact on investment in new and/or existing homes. The two main reasons given were the financial constraints that providers would continue to face, which in some cases would mean prioritisation of investment on existing homes over new homes, and a lack of trust in a longer settlement lasting, which providers would take into account in their business plans.

Respondents tended not to make a clear distinction between impacts on willingness and ability to invest in new and/or existing homes. Where they did, one argument that was made was that providers are willing to invest but lack the financial capacity and certainty to do so.

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

This question received a total of 307 responses, which included 198 RPs and their representative bodies, 91 individuals and tenant organisations, and 18 other organisations.

84 out of 307 (27%) respondents discussed the idea of a rent ceiling and/or floor as something that could provide confidence in the stability of the government’s rent policy in the event of an inflationary spike. This included 60 of 198 (30%) RPs and their representative bodies, 17 of 91 (19%) individuals and tenant organisations, and 7 of 18 (39%) other organisations. The main reasons provided were that it would protect tenants from high rent increases while giving providers some transparency and predictability.

72 out of 307 (23%) respondents suggested a convergence mechanism or a catch-up mechanism could provide confidence, in particular in circumstances where a rent ceiling has been implemented. This included 67 of 198 (34%) RPs and their representative bodies, 2 of 91 (2%) individuals and tenant organisations, and 3 of 18 (17%) other organisations. The main reason provided was that it would offer more financial stability to RPs, in light of historic rent interventions and ongoing cost pressures.

32 out of 307 (10%) respondents suggested that providers could be compensated through some form of cash injection if a rent ceiling is implemented or if providers decide not to implement the maximum permitted rent increase in the event of an inflationary spike. This was only proposed by RPs or their representative organisations, and other organisations. They argued that this would ensure tenants are protected and the financial capacity of providers is not significantly impacted.

54 out of 307 (18%) respondents argued that in order to provide confidence in the stability of the government’s rent policy, government needed to make assurances that it would not intervene. This included 48 of 198 (24%) RPs and their representative bodies, 2 of 91 (2%) individuals and tenant organisations, and 3 of 18 (17%) other organisations. One way this could be done would be through enshrining the rent settlement in legislation. This would support business planning by providers and reduce financial risks for lenders and investors.

28 out of 307 (9%) respondents suggested that an alternative inflation metric upon which to base maximum permitted rent increases could help. This included 24 of 198 (12%) RPs and their representative bodies, and 4 of 18 (22%) other organisations. Options referenced were an alternative CPI metric that covered a longer period of time and not just the year up to September, which might flatten out any inflationary spikes, and a CPI metric like CPIH (a variant of CPI that includes owner occupier housing costs) that (it was argued) is more reflective of the costs providers face.

Other policy options were also suggested, including proposing changes to how social housing rents are initially set and linking formula rent more closing with earnings. It was also argued that, rather than rent policy, government and local authorities should focus on the welfare system and local support in order to address affordability concerns that might arise from an inflationary spike.

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

This question received a total of 357 responses, which included 205 RPs and their representative bodies, 93 individuals and tenant organisations, and 19 other organisations.

56 out of 357 (16%) respondents took the view that the main action needed was for government to avoid deviating from the future rent settlement, as its predecessors had done. This included 52 of 205 (25%) RPs or their representative organisations and 4 of 19 (21%) other organisations. Many emphasised that this was the single most important change that could be made to build confidence. 33 out of 357 (9%) respondents contended that rent policy should be underpinned by legislation. This included 28 of 205 (14%) RPs or their representative organisations and 5 of 19 (26%) other organisations, who indicated that the value of this change would lie in making changes to rent policy subject to parliamentary approval. Many also took the view that legislation would make it harder for government to make short-term changes to the next settlement.

49 out of 357 (14%) respondents said that convergence would build confidence in the stability of the policy. This included 43 of 205 (21%) RPs and their representative bodies and 6 of 19 (32%) other organisations. These responses indicated that convergence would give providers’ certainty about their future income, and some responses indicated that it would be seen as a positive signal of intent. Further views about convergence were submitted in response to question 7 – see below.

21 out of 357 (6%) respondents asked for the ‘New Burdens’ doctrine to be applied to council HRAs. This included 21 of 205 (10%) RPs and their representative bodies. Respondents saw this as a necessary change to protect their viability in the face of new regulatory demands and rising costs.

20 out of 357 (6%) respondents stated that a longer duration of rent settlement would improve confidence. This included 21 of 205 (10%) RPs and their representative bodies. Respondents indicated that, in addition to increasing the funds that RPs could negotiate from investors, it would also be seen as a reassuring signal of commitment to the policy. This is in addition to the views expressed about the appropriate length of the rent settlement in response to earlier consultation questions – see above.

Some additional suggestions included expediting clarification of future plans surrounding the Decent Homes Standard (DHS), Minimum Energy Efficiency Standards (MEES) and the future Affordable Homes Programme (AHP); outsourcing rent setting to the Regulator of Social Housing, or regional devolution; avoiding further changes to rules around local authority borrowing and the HRA; introducing contingencies into the next rent policy which would define when and how the policy would change in the event of a crisis; obtaining a cross-party pledge on the future of rent policy; and capping service charges.

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

This question received a total of 355 responses, which included 221 RPs and their representative bodies, 103 individuals and tenant organisations, and 18 other organisations.

172 out of 355 (48%) respondents agreed that rents should be permitted to increase by CPI+1% per year. This included 25 of 103 (24%) individuals or tenants organisations, 133 of 221 (60%) RPs or their representative organisations, and 14 of 18 (78%) other organisations. 139 out of 355 (39%) respondents disagreed. This included 73 of 103 (71%) individuals and tenant organisations, 54 of 221 (24%) RPs or their representative organisations, and 9 of 18 (50%) other organisations.

Across all responses, 146 out of 355 (41%) believed that further financial support for providers would be necessary. It is important to add that this number also counts some respondents that agreed that rents should be permitted to increase by CPI+1% each year. This included 130 of 221 (59%) RPs or their representative organisations, 7 of 103 (7%) individuals and tenant organisations and 9 of 18 (50%) other organisations. 55 respondents cited rising costs, and a further 55 mentioned increased demands around supply and quality in their explanation. 41 respondents indicated that CPI+1% on its own would not suffice to compensate for rental revenue lost as a result of cuts by the previous government. As a result, some proponents of a longer 10 year settlement have been counted as agreeing with the proposal, and others as disagreeing with the proposal.

Although our consultation did not seek views on reintroducing a ‘convergence mechanism’ (to permit rents for Social Rent homes that are below the formula level to increase faster than CPI+1%), 98 out of 355 (27%) respondents called for this explicitly. This included 85 of 221 (38%) RPs and their representative bodies, 3 of 103 (3%) individuals and tenant organisations, and 10 of 18 (56%) other organisations. Respondents viewed convergence as a fairer means of increasing rent, compared to a higher inflation-linked rent increase. The latter option was raised by 12 respondents.

A further 28 out of 355 (8%) respondents called for additional support through grant, which included 9 of 103 (9%) individuals and tenant organisations who contended that there is too much reliance on rents to fund government objectives. 24 out of 355 (7%) respondents argued that flexibility (distinct from convergence) would be helpful. This included options such as increasing the flexibility allowed for providers when setting initial rents for supported housing Social Rent properties from 10% to 20%, but also ideas such as linking the level of investment in a property to the amount of rent charged.

Commenting on tenant impacts, 57 out of 355 (16%) respondents felt that above inflation rent increases are unaffordable or unfair to tenants, including 19 of 221 (9%) RPs and their representative bodies, 33 of 103 (32%) individuals and tenant organisations, and 5 of 18 (28%) other organisations. 9 out of 355 (3%) respondents said that service charge levels are too high.

38 out of 355 (14%) respondents viewed September CPI as an unsuitable metric on which to base annual rent increases. Some suggested that basing annual rent increases on September CPI leads to volatility of rental income. Some argued that there are other metrics that would more effectively track housing-related costs. Others noted that a 12-month average of CPI would be preferable to relying on the September figure.

Question 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?

This question received a total of 327 responses, which included 204 RPs and their representative bodies, 100 individuals and tenant organisations, and 22 other organisations.

When considering the impact of the policy on affordability for tenants, 147 out of 327 (45%) respondents took the view that CPI+1% struck the most fair and appropriate balance between the impact on tenants and the costs to RPs. This included 135 of 204 (66%) RPs and their representative bodies, 1 of 100 (1%) individuals and tenant organisations, and 11 of 22 (50%) other organisations.

70 out of 327 (21%) respondents contended that the settlement would result in tenants struggling to make ends meet, including 13 of 204 (6%) RPs and their representative bodies, 46 of 100 (46%) individuals and tenants organisations, and 11 of 22 (50%) other organisations. Some of the responses from RPs acknowledged that some tenants would struggle with the cost of living but saw the level of rent as necessary. 47 out of 327 (14%) respondents viewed that affordability challenges faced by tenants extended beyond rents and were reflective of wider factors impacting the cost of living. In this context, several responses mentioned the impact of the benefit cap on affordability. 45 out of 327 (14%) respondents viewed the impact on affordability for tenants as variable or uncertain. This included 38 of 204 (19%) RPs and their representative bodies, 5 of 100 (5%) individuals and tenant organisations, and 2 of 22 (9%) other organisations. Some respondents made the point that affordability impacts vary because a proportion of tenants in social housing are not in receipt of benefits.

Several respondents predicted that the proposed policy would cause rent arrears and evictions to rise. Others viewed the proposed policy as unfair to tenants. However, some respondents remarked that the policy would impact positively on affordability by providing security for tenants regarding the future of their rent. Respondents also mentioned that DWP should pay housing-related benefits on a weekly basis to line up with the way in which rent is charged by RPs, as this would  improve affordability for tenants during years in which there are 53 billing weeks rather than the standard 52.

Considering impacts on the willingness and ability of RPs to invest in new homes, 91 out of 327 (27%) respondents felt the proposed policy would result in negligible or no additional increase to the development of new homes by providers. This included 66 of 204 (32%) RPs and their representative bodies, 17 of 100 (17%) individuals and tenant organisations, and 8 of 22 (36%) other organisations. The main reason provided was that a CPI+1% limit for five years is insufficient to cover more than the cost of maintaining existing homes. Many also mentioned that existing development plans were facing delays or being revised to respond to heightened risk. A minority, comprising 19 of 100 (19%) individuals and tenant organisations and 4 of 22 (18%) other organisations, argued that RPs were not sufficiently reliable or competent to use rental revenue for increased supply.

44 out of 327 (13%) respondents were uncertain what the impact of the proposed policy would be on supply, with many claiming that this was due to a lack of clarity about the government’s plans for reforms to DHS and MEES. This included 37 of 204 (18%) RPs and their representative bodies, 3 of 100 (3%) individuals and tenant organisations, and 4 of 22 (18%) other organisations. 41 of 327 (13%) respondents took the view that the proposed policy would stimulate more supply. This included 31 of 204 (15%) RPs and their representative bodies, 4 of 100 (4%) individuals and tenant organisations, and 6 of 22 (27%) other organisations.

Regarding the impacts of the policy on investment in existing homes, 75 out of 327 (23%) respondents suggested that there would be minimal or no increase to investment in existing homes. This included 50 of 204 (25%) RPs and their representative bodies, 18 of 100 (18%) individuals and tenant organisations, and 7 of 22 (32%) other organisations. Meanwhile, 59 out of 327 (18%) respondents thought that the policy would increase the ability and willingness of RPs to invest in existing homes, including 54 of 204 (26%) RPs and their representative bodies, 2 of 100 (2%) individuals and tenant organisations, and 3 of 22 (14%) other organisations. Many RPs signalled that they preferred to prioritise investment in existing stock when faced with limited resources, which likely accounts for this difference. 47 out of 327 (14%) respondents were uncertain of how the policy would affect investment in existing homes. This included 38 of 204 (19%) RPs and their representative bodies, 3 of 100 (3%) individuals and tenant organisations, and 6 of 22 (27%) other organisations.

Question 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?

This question received a total of 322 responses, which included 206 RPs and their representative bodies, 93 individuals and tenant organisations, and 23 other organisations.

143 out of 322 (44%) respondents viewed that more grant for affordable housing was needed to support investment by RPs. This included 102 of 206 (50%) RPs and their representative bodies, 31 of 93 (33%) individuals and tenant organisations, and 10 of 23 (43%) other organisations. Many RPs mentioned that inflexibilities in the existing AHP had affected their ability to build. This included respondents who felt that grant needed to be available for the full development cycle, including planning stages. Others mentioned that a five-year grant programme failed to reflect how long it takes to develop new homes. This was reflected in the view of 31 out of 322 (10%) respondents, who argued that all grants – including the AHP – should be made available over longer periods.

125 out of 322 (38%) respondents wanted to see the provision of additional grants focused on improvements to existing stock. This included 103 of 206 (50%) RPs and their representative bodies, 11 of 93 (12%) individuals and tenant organisations, and 11 of 23 (48%) other organisations. These responses called for grant to support retrofit for energy efficiency, building safety and decency. Tenants in support of increased grant cited their concerns with rent increases, and how rental income is spent. 22 out of 322 (7%) respondents wanted to see additional grant specifically for refurbishment of stock nearing the end of its life. A few respondents wanted to see a bespoke grant created to cover costs associated with the most vulnerable tenants.

50 out of 322 (16%) respondents called for measures outlined in a recent report on local authority provider viability by Southwark Council, which argues that the council housing self-financing settlement must be revised, the ‘New Burdens’ doctrine should be extended to HRAs, loans from the Public Works Loan Board should be made interest free and subject to higher limits, and that council debt should be restructured. This included 42 of 206 (12%) RPs and their representative bodies, 2 of 93 (2%) individuals and tenant organisations, and 6 of 23 (26%) other organisations. Respondents also called for a one-off cash injection to allow HRAs to recoup £64 million, which they argue has been lost in rental revenue after cuts to rent by the last government.

43 out of 322 (13%) respondents argued that rent convergence would be necessary to increase capacity to invest in either new or existing homes. This included 40 of 206 (19%) RPs and their representative bodies, and 3 of 23 (13%) other organisations.

42 out of 322 (13%) respondents stated that bringing forward decisions regarding the specifics of upcoming reforms would materially improve the capacity of RPs to invest. This included the revised DHS, MEES, Awaab’s Law and future AHP funding. These responses emphasised that development and major improvements can take a very long time to plan and deliver, and that uncertainty about future income and costs is leading to missed opportunities and more cautious planning.

30 out of 322 (9%) respondents argued that government should end or more greatly restrict the Right to Buy scheme. Some also wanted to see more flexibility in combining Right to Buy receipts with grant.

Some additional measures suggested included the provision of subsidised or interest free government loans, the waiving of VAT or other taxes on development and renovation projects, changes to streamline the planning process, government assistance in training and recruitment, and excepting RPs from national insurance contributions.

Question 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?

This question received a total of 258 responses, including 168 RPs and their representative bodies, 91 individuals and tenant organisations, and 20 other organisations.

38 out of 258 (14%) respondents took this opportunity to argue that the policy statement and direction should be revised to permit Social Rent convergence. This included 36 of 168 (21%) RPs and their representative bodies, and 2 of 20 (10%) other organisations.

11 out of 258 (6%) respondents (comprising RPs and one body representing tenants) argued that the entire rent setting regime should be redesigned. Many of these responses expressed concern with the use of 1991 values in the Social Rent formula. Some took the view that CPI is an ineffective measure of inflation in the housing sector. Others argued that change is needed to existing rental products. This included some who felt there should only be one Social Rent product, and others who wanted modifications to Affordable Rent.

13 out of 258 (5%) respondents argued for more flexibility (other than the reintroduction of Social Rent convergence). This included responses which requested an increase to the 10% flexibility allowed for supported housing rents. It also included those who wished for more flexibility to charge higher rents for properties which have received greater investment in quality, such as under the ‘Warm Rents’ approach. A few respondents also asked for flexibility to better adapt rents in relation to local needs.

8 out of 168 (5%) RPs and their representative bodies raised concerns about the pre-existing option to charge higher rent for tenants earning more than £60,000 per annum. The main issue raised was the difficulty that landlords experience in accessing household financial information. Some respondents requested government support to acquire this information. An additional concern mentioned was the fact that £60,000 is much less in real terms than it was when the measure was introduced. Some respondents proposed that it should be raised to £83,000.

Respondents also raised a few technical issues regarding the draft policy statement, which included:

• concerns regarding redrafting which clarifies that formula rent is a floor to Affordable Rent. Respondents contended that the unintentional result would be a loss of revenue in some areas of the country where market rents are low.
• objection to the requirement to consult tenants in order to make use of rent flexibility.
• concerns that the policy statement mischaracterises the statutory protection for tenants in receipt of service charges.
• the definition of specialised supported housing (SSH), which is one of the categories of low-cost housing exempt from the Rent Standard. Concerns here observe that defining SSH as housing with little or no public assistance prohibits them from accessing grant. Some also feel that the term ‘public assistance’ is insufficiently clear.

Consultation on how to implement Social Rent convergence (published 2 July 2025, closed 27 August 2025)

We received a total of 314 responses to the consultation.

30% of responses were from individuals and tenant organisations; 62% were from registered providers of social housing (31% from private registered providers and their representative bodies and 32% from local authorities and their representative bodies); and 3% were from other bodies involved in the provision of management of social housing; and 5% were from other organisations.

The table below sets out a breakdown of the respondents.

Type	Number of responses
Individuals	79
Bodies representing the interests of tenants of social housing	14
Private registered providers of social housing (including housing associations, almshouses and others) and representative bodies	96
Local authorities (or bodies representing the interests of local authorities)	99
Other bodies involved in the provision or management of social housing	10
Other organisations (including charity, legal and finance organisations)	16
Total	314

For the purpose of this response, we have grouped the respondents into three categories:

• registered providers of social housing (‘RPs’), which includes local authorities (‘LAs’), private registered providers (‘PRPs’) and their representative bodies (195 responses)
• individuals and tenant organisations (93 responses)
• other organisations, which includes “other bodies involved in the provision or management of social housing” and “other organisations” (26 responses)

Some respondents did not answer every question. As such, the number (and percentage) of answers to the questions often differ from the total number of responses received.

Responses to the questions 

Question 1: At what level should Social Rent convergence be permitted?

£1 per week
£2 per week

This question received a total of 313 responses, which included 195 RPs and their representative bodies, 92 individuals and tenant organisations, and 26 other organisations.

40 out of 313 (13%) respondents supported a £1 per week convergence policy. This included 6 of 195 (3%) RPs and their representative bodies, 33 of 92 (36%) individuals and tenant organisations and 1 of 26 (4%) other organisations. The most common reasons given were that this was the most affordable option for tenants or that this option most effectively balanced affordability for tenants with supporting investment in new and/or existing homes.

146 out of 313 (47%) respondents supported a £2 per week convergence policy. This included 114 of 195 (58%) RPs and their representative bodies, 19 of 92 (21%) individuals and tenant organisations and 13 of 26 (50%) other organisations. The most common reason given was that this option best supported investment in new and/or existing homes. Other reasons given argued that this option struck a balance between a range of different outcomes, including affordability for tenants, fairness for tenants in terms of equalising rent levels, public spending, flexibility for RPs and investment in new and/or existing homes.

74 out of 313 (24%) respondents supported a convergence policy of at least £2 per week or higher. This included 69 of 195 (35%) RPs and their representative bodies, and 5 of 26 (19%) other organisations. The most popular option proposed was £3 per week, which was supported by the National Housing Federation, London Councils and the Mayor of London. The most common reason given again was that convergence higher than £2 per week best supported investment in new and/or existing homes, with other reasons arguing that it struck a balance between a range of different outcomes, including affordability for tenants, fairness for tenants in terms of equalising rent levels, public spending, flexibility for RPs and investment in new and/or existing homes.

Other responses to this question argued that convergence should be permitted up to the 5%/10% flexibility level for general needs/supported housing properties and not just formula rent, that government should consider a flexible convergence proposal that adjusted the uplift based on inflation levels in each year, or that convergence should not be permitted at all.

Question 2: How would the benefits for the supply and quality of social and affordable housing differ depending on whether convergence was permitted at £1 or £2?

This question received a total of 298 responses, which included 194 RPs and their representative bodies, 80 individuals and tenant organisations, and 24 other organisations.

141 out of 298 (47%) respondents stated that £2 per week would provide additional financial capacity for RPs to invest in new homes. This included 118 of 194 (61%) RPs and their representative bodies, 9 of 92 (10%) individuals and tenant organisations and 14 of 26 (54%) other organisations. 50 out of 298 (17%) respondents argued that £2 per week would accelerate investment in new homes. This included 39 of 194 (20%) RPs and their representative bodies agreed, 5 of 92 (5%) individuals and tenant organisations and 6 of 26 (23%) other organisations. Research carried out by Savills showed that £2 supports a much faster rate of increase in the delivery of new homes in the earlier years of implementation, meaning more homes are likely to be built in this Parliament. Many of those that supported a convergence policy of at least £2 per week or higher (e.g. £3 per week) argued that the benefits to supply would be even greater with a faster convergence policy.

41 out of 298 (14%) respondents were not convinced that £1 or £2 per week would have an impact on investment in new homes or thought the impact would be limited. This included 26 of 194 (13%) RPs and their representative bodies, 14 of 92 (15%) individuals and tenant organisations and 1 of 26 (4%) other organisations. Some of the most common reasons given, in particular from RPs and their representative bodies, included the fact that any additional rental income would have to be spent on investment in existing homes and the range of new quality and energy efficiency requirements soon to be placed on the sector. The G15, a group of 11 of London’s leading housing associations, argued that any investment in supply would be limited in this Parliament unless convergence of £3 per week was permitted. Other reasons given included the fact that the gap between formula rent and actual rent for Social Rent properties was too small for some RPs for it to have a meaningful impact on supply – where this was the case, some respondents argued that convergence should be permitted up to the 5%/10% flexibility level.

158 out of 298 (53%) respondents stated that £2 per week would provide additional financial capacity for RPs to invest in existing homes. This included 134 of 194 (69%) RPs and their representative bodies, 9 of 92 (10%) individuals and tenant organisations and 15 of 26 (58%) other organisations. 75 out of 298 (25%) respondents argued that £2 per week would accelerate investment in new homes. This included 60 of 194 (30%) RPs and their representative bodies , 6 of 92 (7%) individuals and tenant organisations and 9 of 26 (35%) other organisations. Some respondents were not convinced that £1 or £2 would have an impact on investment in existing homes or thought the impact would be limited – many of these were individuals who thought that RPs already had sufficient income to deliver these improvements or thought that the additional rental income would be wasted.

Question 3: How would the impacts on households differ depending on whether convergence was permitted at £1 or £2?

This question received a total of 302 responses, which included 192 RPs and their representative bodies, 85 individuals and tenant organisations, and 25 other organisations.

187 of 302 (62%) respondents observed that any adverse impacts from the policy would be felt by the minority of tenants who pay for some or all of their housing cost. 66 of 302 (22%) respondents predicted that these impacts would take the form of increased poverty and issues with rent arrears or tenancy sustainability (32 of 302, or 11%). Among responses from individuals and tenant organisations, 12% predicted an impact on arrears and tenancy sustainability, while 10% of responses from RPs and their representative bodies suggested this outcome. 12% of responses from individuals and tenant organisations predicted an adverse impact on poverty, while 26% of responses from RPs and their representative bodies predicted the same. As noted before, there was consensus that this impact would affect a minority of tenants. 44 of 192 RPs and their representative bodies (23%) noted that existing measures were in place to assist tenants dealing with hardship. Examples mentioned included financial management advice, assistance with furniture poverty, hardship funds, and affordability reviews by landlords.

124 of 302 responses (41%) viewed that rents would remain affordable in every convergence scenario. This view was shared by 45 out of 85 individual and tenant organisation responses (53%), 70 out of 192 responses from RPs and their representative bodies (36%) and 9 out of 25 other organisations (36%). A further 29 out of 302 respondents (10%) stated that rents would continue to be affordable if convergence were permitted at £3 per week. These were made up of 20 individuals and their representative bodies, 8 RPs and their representative organisations and 1 other organisation.

48 of 302 responses (16%) indicated that rent convergence would deliver greater fairness for tenants. Where this view was explained in more detail, respondents articulated the view that tenants with rents below formula presently benefit from improvements to the quality of their homes which are disproportionately funded through the higher rents of tenants who are paying rent at formula. Increased fairness was mentioned by 23 of 85 individuals and tenant organisations (27%), 23 out of 192 RPs and their representative bodies (12%) and 2 out of 25 other organisations (8%).

82 of 302 respondents (27%) expressed an expectation that the quality of tenants’ housing experience would improve as a result of the increased rental revenue from convergence. Respondents mentioned that improvements to energy efficiency would increase comfort and improve affordability for tenants. 36 of 302 responses (12%) framed this in terms of faster convergence in the short-term securing improved affordability in the future. Some respondents viewed that increased supply of social housing would reduce overcrowding for some households and help tenants who were waiting to be able to move for various reasons.

Question 4: Should convergence be implemented from 1 April 2026 or from a later date, and what would be the implications of implementing it from a later date?

This question received a total of 301 responses, which included 193 RPs and their representative bodies, 84 individuals and tenant organisations, and 24 other organisations.

237 of 301 respondents (79%) said that convergence needed to begin in 2026, in line with the new 10-year rent settlement. This was made up of 183 of 193 RPs and their representative bodies (95%), 32 of 84 individuals and tenant organisations (38%) and 22 of 24 other organisations (92%).

29 of 301 respondents (10%) viewed that convergence should begin later than 2026. This was made up of 25 of 84 individuals and tenant organisations (30%), 2 of 24 other organisations (8%) and 2 of 193 RPs and their representative bodies (1%).

3 of 301 respondents (1%) were unsure when convergence should start. These were all individual respondents.

In advocating for a 2026 start, 135 of 301 respondents (45%) expressed concern that any delay to conversion would adversely affect the delivery of government objectives surrounding investment in new and existing homes. This was made up of 119 of 193 (62%) RPs and their representative bodies, 5 of 84 (6%) individuals and tenant organisations, and 11 of 24 other organisations (46%).

In explaining this concern, 62 of 301 responses (21%) viewed that postponing convergence would increase uncertainty among investors and providers, and that it would negatively impact the ability of RPs to plan. 57 of 301 respondents (19%) additionally feared that a delay to convergence would reduce the capacity of RPs in the near term.

This concern was particularly emphasised by local authority providers, who accounted for 32 of the responses which predicted harm to capacity. 19 PRPs shared the same view. 48 of 301 respondents (16%) explicitly observed that a delay to convergence would reduce rental revenue across the settlement, compared to a 2026 start.

36 of 301 respondents (12%) believed that there is an urgent need for the additional income that convergence will bring. 43 of 301 respondents (14%) viewed that a delay to convergence would reduce fairness to tenants by postponing the point at which rents below formula would be brought into alignment.

Additional explanations included the view that convergence will act as an important signal to investors and developers (16 responses), which is needed to ensure that funds are secured and that plans are not delayed or scaled down. 20 respondents also viewed that a delay in convergence would impact the cost of borrowing.

Among respondents who viewed that convergence should be delayed, some reasons mentioned included the view that a delay would protect tenants (8 of 301 responses, or 3%) and that it would give RPs more time to ultimately consult their tenants (21 of 301 or 7%). Some viewed that convergence would not be perceived as negatively by tenants if RPs had additional time to communicate about proposals (3 of 301, or 1%).

Question 5: How long should convergence be in place for, and what would be the implications of different durations of convergence?

This question received a total of 296 responses, which included 191 RPs and their representative bodies, 81 individuals and tenant organisations, and 24 other organisations.

The majority of respondents (98 of 296, or 33%) viewed that convergence should remain in place until all properties had been brought in line with formula rent. This was made up of 81 of 191 RPs and their representative bodies (42%), 10 of 81 individuals and tenant organisations (12%), and 7 of 24 other organisations (30%).

An overlapping but distinct group of respondents (97 of 296, also rounded to 33%) viewed that convergence should remain in place for 10 years, or more. Most respondents viewed that convergence would take a minimum of 10 years. Support for a minimum length of 10 years was made up of 71 of 191 RPs and their representative bodies (37%), 16 of 81 individuals and tenant organisations (20%), and 10 of 24 other organisations (42%). A further 16 of 296 respondents believed that convergence would take longer than 10 years to complete (5%). In supporting a duration of 10 years, many responses emphasised the presentational logic of aligning convergence with the length of the rent settlement.

40 of 296 responses (14%) called for convergence to remain in place indefinitely. These were made up of 34 of 191 RPs and their representative bodies (18%), 3 of 81 individuals and tenant organisations (4%), and 3 of 24 other organisations (13%). Distinct from views that convergence should remain in place until rents aligned with formula, these responses asserted that convergence should become a permanent component of rent policy. Many argued that this would introduce flexibility which would improve the ability of landlords to house tenants during periods of economic pressure, with confidence that the shortfall could be made up in later years.

34 of 296 respondents (12%) viewed that a longer duration for convergence would improve the viability and capacity of RPs. A further 31 respondents (11%) viewed that this would favourably improve motivation to invest in new supply.

For a modest number of respondents (30 of 296, or 10%), a longer duration for convergence was favoured because they thought bringing rents back to formula more gradually would be more protective of tenants. These respondents were made up of 19 RPs and their representative bodies, 8 individuals and tenant organisations and 3 other organisations.

24 of 296 respondents (5%), viewed that convergence should remain in place for five years or less. This included 12 individuals and tenant organisations, 10 RPs and their representative bodies and 2 other organisations. 16 of 296 respondents (5%), specifically wanted rents to align with formula as soon as possible.

Part 2: Summary of responses

We are grateful for the 368 responses we received to our consultation on future social housing rent policy and the 314 responses we received to our consultation on how to implement Social Rent convergence. We have considered the comments and additional evidence provided. Our response to both consultations is set out below.

A stable rent policy

The government believes it is important to provide a stable social housing rent policy that gives RPs, lenders and investors sufficient confidence to commit the level of investment that is now needed in both new and existing social homes, and gives social housing tenants clarity about their rent levels.

In order to provide that stability, the government recognises that the length of rent settlement is important. In theory, the longer the rent settlement the longer the time period over which particular rental income streams can be guaranteed, providing the sector with greater confidence to deploy its financial capacity at scale and invest in bigger schemes, buy land more strategically and invest in their supply chains and internal capacity.

However, any commitment will only build confidence if it is perceived as credible from the outset. That means implementing a social housing rent policy that the sector perceives will last for its stated time period and will not be subject to sudden and unanticipated changes from government.

In the consultation paper on future social housing rent policy, the government proposed a social housing rent policy that would remain in place for at least five years, from 1 April 2026 to 31 March 2031. As announced at the Spending Review on 11 June 2025, following careful consideration of the responses to that consultation, we have decided that the social housing rent policy should remain in place for at least 10 years, from 1 April 2026 to 31 March 2036.

We believe a 10-year settlement would provide greater confidence and certainty for RPs to support long-term business planning in new and existing social homes, and provide longer-term certainty for tenants to enable them to more effectively plan their personal finances. We heard from some respondents that a 10-year settlement would also make social housing a more attractive investment for new investors by reducing downside risk and boosting the valuation of the assets, which in turn could further increase the financial capacity of RPs to invest in new and existing homes.

Some respondents to the consultation proposed more structural changes to improve the stability of the social housing rent policy, such as changing how rent policy is decided so that decisions are taken independently from  government. Given the significant policy and fiscal impacts of these decisions, we do not believe it would be tenable for this role to be performed by an unelected body.

Some respondents called for more fundamental changes to the social housing rent policy, including changing how initial rents for Social Rent are set and increasing the flexibility for supported housing. As stated in our consultation paper, we decided that opening the possibility of wholesale reform – with the potential for large and unpredictable changes to existing rents – would create more uncertainty and instability and delay the point at which we can confirm future policy. We continue to take the view that, whilst more fundamental reforms could potentially have merit, in the present circumstances, it is right to prioritise providing clarity as quickly as possible.

A rent policy that supports investment in new and existing homes, with the right protections for existing and future tenants

In addition to providing a stable social housing rent policy, it is important that the level of rents permitted by that policy strikes a balance between the need for increased investment in new and existing homes, the interests of those whose disposable income would be affected by rent increases and the consequences for public spending.

This decision therefore requires taking account of the cost of living pressures that households have been facing and the fact that the overall financial position of RPs has weakened over recent years, which has resulted in a scaling back of their development plans.

In our 2024 consultation paper on future social housing rent policy, we focused on the limits that should apply to annual rent changes and not initial rent setting policy, for the reasons set out in paragraph 113. We proposed that social housing rents should be permitted to increase by up to CPI+1% each year from 1 April to 31 March 2031.As also announced at the Spending Review on 11 June 2025, following careful consideration of the responses to that consultation, we decided that rents on Social Rent and Affordable Rent homes should be permitted to increase by up to CPI+1% each year from 1 April 2026 to 31 March 2036, based on the CPI from the previous September.

We think it is important that the limit on annual rent changes should be index-linked (i.e. tied to an inflation metric) and the most appropriate inflation metric is CPI. This is necessary to give RPs and investors sufficient confidence that rental income will, over the lifetime of the social housing rent policy, keep pace with the costs that RPs must incur. Without this relationship to CPI, RPs’ available financial capacity could weaken more rapidly, harming their ability to invest in new and existing homes.

Some respondents argued that we should consider an alternative inflation metric, such as one that more closely reflects construction costs or a CPI metric that is based on an average over a longer time period (and not just the 12 months up to September). We recognise that actual year-on-year changes in RPs’ costs might vary from CPI in some cases, but we believe that CPI continues to be the most useful (and widely understood) index for these purposes. We also think it is important to use a September CPI metric to align with annual upratings across large parts of welfare system.

This 10-year rent settlement at CPI+1%, alongside a 10-year £39 billion Social and Affordable Homes Programme, gives the sector the long-term certainty it needs. It sets the foundations for RPs to play their full role in delivering the biggest increase in social and affordable housebuilding in a generation, as well as lasting change in the safety and quality of social housing.

However, the majority of Social Rent homes have rents that remain below formula, and the government recognises that this is an important limiting factor on the sector’s overall financial capacity. In 2025, PRPs held 2.1 million Social Rent homes, of which 1.2 million (57.2%) were below formula rent. LAs held 1.5 million Social Rent homes, of which 1.5 million (99.9%) were below formula rent.^{[footnote 1]} We have therefore decided that it is right to address the disparity between actual rents and formula rents by also implementing Social Rent convergence.

We considered alternative options that would provide additional rental income for RPs, such as CPI+2%, which would permit higher rent increases across the board. We did not believe it would be fair to ask those who are already paying higher rents – for example, those in Affordable Rent homes or Social Rent homes with rents that are at or above formula rent – to meet the cost of rent increases in excess of CPI+1%. Implementing Social Rent convergence was considered preferable because it would involve those who currently pay lower rents being asked to pay an additional amount.

On 2 July 2025, government therefore published a consultation on how Social Rent convergence should be implemented. We sought views on by how much weekly rents should be permitted to increase each year (over and above CPI+1%) for Social Rent homes until they converge with formula rent and when Social Rent convergence should be available during the period of the 10-year rent settlement. Following careful consideration of the responses to that consultation, we have decided that RPs may increase the weekly rent by up to an additional £1 from 1 April 2027 over and above the CPI+1% limit, before rising to an additional £2 each year from 1 April 2028, until formula rent is reached on their Social Rent homes. We think this convergence policy strikes the right balance between the objectives set out in paragraph 114.

We appreciate that RPs have been calling for government rent policy to address the disparity between actual rents and formula rents for many years, since the previous government scrapped the original Social Rent convergence mechanism in 2015. Many RPs responded to the consultation by calling for convergence of at least £2 to start from 2026-27, and we recognise that a swifter path to convergence than the one we have decided to implement would improve their financial capacity more quickly.

However, as convergence will have implications for public spending, the government has had to balance these considerations with our commitment to put the public finances on a sustainable footing. Meeting that commitment is essential to give households and businesses the certainty they need. The more moderate speed of convergence that we have decided to implement will manage the impact on the public finances. It will also ease the additional costs for those tenants whose disposable income would be affected (explained in more detail below). In light of this, we think our decision represents a fair and reasonable settlement that will – for the first time in over a decade – provide a path for Social Rents to converge over time on a sustainable basis. This is in addition to an underlying 10-year rent settlement that will permit rents to rise one percentage point above CPI each year.

We estimate that this convergence policy will generate an additional £2.7 billion in rental income (in nominal terms) for PRPs and £3.1 billion in rental income (in nominal terms) for LARPs over the 10-year rent settlement compared to capping annual rent increases at CPI+1%, thereby increasing the financial capacity of RPs to invest in new and existing homes.

It will be particularly beneficial to LARPs, given that 99.9% of LARP Social Rent homes require convergence and given there is a larger average gap between actual rents and formula rents for LARP Social Rent homes compared to PRP Social Rent homes. It will help LARPs to address current pressures facing the HRA and prevent further decline of Housing Revenue Account (HRA) financial position (reducing the need to intervene where councils would otherwise face the most extreme financial difficulty), creating additional capacity to build new council housing.

Implementing convergence would, over time, achieve greater fairness between the rents paid by tenants of Social Rent homes. Since the previous convergence policy was abolished in 2015, tenants in homes with rents that remained below formula will have continued to pay less than would typically be charged to new tenants entering similar Social Rent properties.

Rents for Social Rent homes would continue to remain well below rents in the Private Rented Sector under this convergence policy. This is something we think is fundamentally important, especially in areas of the country where housing affordability is under the greatest strain. In 2025, the average general needs formula rent was £120.97 per week for PRPs and £113.67 for LARPs, compared to an average Private Rented Sector rent of £318.75. In London, the average general needs formula rent was £159.32 for PRPs and £141.40 for LARPs, compared to an average Private Rented Sector rent of £515.84.

However, we recognise that this policy will have an impact on the disposable income of some tenants, specifically around one third of social rented sector households not in receipt of Housing Benefit or the housing element of Universal Credit (HB/UCHE) to help pay their rent, and those subject to the benefit cap or removal of spare room subsidy (RSRS). The government would not choose to ask tenants to pay more in rent if we did not think this was necessary in order to deliver desperately needed improvements to the supply and quality of social housing.

We estimate that – under our proposals – the average social housing rent across England would remain below 20% of average gross income for working age households not receiving HB/UCHE. For pensioners not receiving HB/UCHE, we estimate that the average social housing rent across England would remain below 27% of average gross income. The government has committed to protecting the State Pension ‘Triple Lock’ for the duration of this Parliament, which increased the full new State Pension by £470 in 2025 to 2026. The impact on those subject to RSRS would be marginal and in a limited number of cases will impact those on the benefit cap.

Furthermore, social tenants would ultimately benefit where real-terms rent increases and convergence result in higher levels of investment by RPs to deliver improvements to the quality and energy efficiency of their homes. Where RPs have the financial capacity to improve the energy efficiency of their homes (for example, co-investing alongside funding from the Warm Homes: Social Housing Fund), tenants may benefit from lower energy bills, resulting in warmer, cheaper homes that are free from damp and mould. Decisions about rent policy must also consider the interests of those who are not in social housing and would benefit from an increase in its supply – such as those who are currently trapped in Temporary Accommodation or unaffordable and/or unsuitable privately rented housing.

We understand that the delivery of our objectives is dependent on future levels of government investment and wider government policy. This was highlighted by respondents to both consultations. At the Spending Review, we confirmed that government will invest £39 billion in a new 10-year Social and Affordable Homes Programme from 2026 to 2027 and that £2.5 billion of low-interest loans will be made available to support the delivery of new social and affordable housing.

We have taken into account the level of rental income permitted under this policy when making decisions that affect the finances of RPs, including regulatory requirements for the new Decent Homes Standard, Minimum Energy Efficiency Standards and Awaab’s Law.

Our proposed direction to the Regulator of Social Housing

We are issuing a direction made by the Secretary of State which the Regulator must follow on its new Rent Standard. That direction is attached to this consultation response at Annex A. The direction requires the Regulator to set a Rent Standard that takes effect from 1 April 2026. At the same time, we are revoking directions on Rent Standards that were issued by the previous government in 2019 and 2023.

The direction also requires the Regulator to have regard to a separate MHCLG policy statement on rents for social housing. That policy statement is attached at Annex B.

The direction and policy statement reflect the rent policy set out above. They also incorporate some minor and technical changes to rent policy:

• changing how we describe permissions around rent increases for Social Rent homes in the direction in order to align it more closely with wording in the policy statement. This follows feedback from stakeholders in response to the Social Rent convergence consultation

• reframing rules around initial rent setting and resetting of rents to refer to when a tenancy is granted, when a tenancy is assigned and when a tenancy is considered a follow-on tenancy. Examples have then been provided to show when these rules would apply

• specifying how RPs may convert weekly rents to monthly rents, where they wish to charge rent on a monthly basis

• stating that the number of bedrooms a property has should be the basis for applying the bedroom weighting in the calculation of formula rent

• making clear that RPs must not at any time charge a rent for a Social Rent property in excess of the rent cap level for the size of the property concerned

• clarifying how the relative value of a property should be assessed for the purposes of calculating formula rents

• in relation to fair rents, making clear that the limit on annual rent increases set by our rent policy cannot be exceeded even where the maximum fair rent is increased by more than that amount

• allowing RPs to let homes on an Affordable Rent basis where they have not previously been let on a Social Rent basis, without having to obtain permission to do so

• change the requirement for Affordable Rent properties to be no lower than formula rent to a permission to treat Social Rent as a “ceiling”. In the draft policy statement published with our 2024 consultation on future social housing rent policy, we proposed removing formula rent as a “floor” for Affordable Rent because we wanted to ensure there was flexibility for RPs to charge a lower rent than formula rent if they wished. Following feedback from the consultation, we recognised that this could negatively impact the rents that RPs are able to charge in a small number of cases, which was not our intention. We also recognised that “ceiling” was a more appropriate terminology than “floor”, given that we are referring to an upper limit, and that it is Social Rent and not formula rent that should be considered the “ceiling”

• amending the definitions of intermediate rent accommodation and temporary social housing, including to reflect the government’s intention to abolish Assured Shorthold Tenancies (through the Renters Rights Bill)

• clarifying what conversions are/are not permitted between Social Rent, Affordable Rent and other rental accommodation

Government response to other comments

Although service charges were out of scope of these consultations, some respondents raised rising costs as an area of concern. The Landlord and Tenant Act 1985 sets out that generally service charges are payable by tenants and leaseholders only to the extent that the costs have been reasonably incurred but this provision does not apply to the tenants of local authorities.

The Leasehold and Freehold Reform Act 2024 contains new measures to drive up transparency of service charges and remove barriers for leaseholders and social housing tenants of PRPs to challenge their landlord. The government recently consulted on how to best implement provisions contained in Part 4 of the Leasehold and Freehold Reform Act 2024 on service charges. This includes whether to extend the right to challenge the reasonableness of a service charge through the First-Tier Tribunal to payers of fixed service charges. We are reviewing responses to that consultation and will respond in due course.

Some respondents to our consultations called for a new self-financing settlement for local authorities to take into account the range of additional spending pressures local authorities now face. The self-financing system gives local authorities control and discretion over their finances so they can make decisions locally according to their need. We recognise that local authorities are having to make tough trade-offs within the HRA and are working with them to understand how the challenges are felt.

There were some concerns raised that the definition of Specialised Supported Housing in social housing rent policy, specifically the conditions around little or no public assistance, prohibits social housing providers from accessing grant and therefore building new supported housing. We decided that reviewing the definition would delay the point at which we can confirm future policy. We continue to take the view that it is right to prioritise providing clarity as quickly as possible.

Summary

After carefully reviewing the responses to both consultations, the government has decided that rents on Social Rent and Affordable Rent homes should be permitted to increase by up to CPI+1% each year from 1 April 2026 to 31 March 2036, based on the CPI from the previous September. For Social Rent homes that are below formula rent, we have also decided to introduce a convergence mechanism that will permit RPs to increase the weekly rent for some of their Social Rent homes by up to an additional £1 from 1 April 2027 over and above the CPI+1% limit, before rising to an additional £2 each year from 1 April 2028, until formula rent is reached.

The government believes this approach strikes an appropriate balance between the need for increased investment in new and existing homes with the interests of those whose disposable income would be affected by rent increases and with the consequences for spending.

RPs still have the flexibility to apply a lower increase, or to freeze or reduce rents, should they wish to do so. The government strongly urges landlords to consider setting lower increases where possible.

Next steps

Alongside the publication of this response, the government is issuing the final direction from the Secretary of State (and the accompanying policy statement) to the Regulator. Both the direction and the policy statement have been amended to reflect the policy approach set out above. A number of minor and technical improvements have also been made to both documents.

The direction requires the Regulator to set a new rent standard with effect from 1 April 2026. It disapplies their requirement to consult on matters mentioned in the direction. This is to ensure there is sufficient time to bring a new Rent Standard into effect from 1 April 2026.

1. Registered provider social housing stock and rents in England 2024-25, Regulator of Social Housing. These figures exclude homes that are excepted from government rent policy. ↩