Correspondence

Letter to private registered providers: government rents consultation - September 2022

Published 7 September 2022

Applies to England

Dear Chief Executive

As you will be aware, DLUHC is consulting on proposals to limit rent increases to below CPI+1% for at least 2023/24. We know that many providers have been considering how to support their tenants as the cost of living increases, and we encourage you to respond to the consultation to provide evidence on the effect that the proposals could have on business plans - provider finances, maintaining existing homes and services and developing new homes.  Any queries about the proposals or consultation process should be raised with DLUHC.

We recognise that these proposals will have significant, challenging effects on landlords’ finances. Both tenants and landlords face increasing costs and reducing real-terms incomes. They will require you to make hard choices about investment and expenditure priorities, revise your business plans and take action to maintain viability and compliance with the regulatory standards. Although the outcome of the consultation is not yet known, it is essential that these preparations happen now. In making these decisions, the safety of tenants and delivery of essential landlord services must not be compromised.

While we will consider applications for exemptions from the rent standard following any revision, these will only be granted where a provider demonstrably cannot maintain its homes appropriately and remain viable while meeting the rent standard.

The FFRs, annual accounts and quarterly surveys give us good information on which providers will be most affected by the proposals, and so we are not asking for revised returns or additional information at this point.  Over the autumn we will engage with all larger providers through the Stability Check round to understand the current position and how plans are progressing. We appreciate that circumstances have changed since the FFRs were submitted in June and will be proportionate in our approach, while seeking to ensure that our published judgements on providers remain appropriate.  As always, if you identify any material viability concerns or other failure to meet the standards you should inform us immediately.

We understand that providers are long-term businesses, and changes to rents – even for a short period – will have a lasting impact.  In the short-term, however, providers will need to identify how they can adjust to maintain their viability and support their tenants in difficult times.

Yours sincerely

Fiona MacGregor

Chief Executive
Regulator of Social Housing