CIH and L&Q: government must commit to public review of social and affordable rents
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The Chartered Institute of Housing (CIH) and L&Q have told the government to commit to a public review of social and affordable housing rent policy - or risk the industry grinding to a halt.
Ahead of 2015/16's Comprehensive Spending Review next month, the organisations are calling for a formal government review of rent policy with a view to proposing a new framework and long-term settlement.
The current settlement, where rents increase by RPI plus 0.5% every year, is due to come to an end in 2015.
Abi Davies, CIH assistant director of policy and practice, said: “If local authorities and housing associations are to have the confidence to plan investment in new development after 2015, then a new framework and settlement is crucial."
The options, which draw on international experience, include:
- maintaining the current dual-track system,
- allowing flexibility to providers to set individual rents within minimum and maximum thresholds,
- applying income-based rents
- a redistributive rent system
Mike Donaldson, group director of strategy and operations at L&Q, believes that achieving clarity on rents post-2015 is essential.
He said: “We believe the three key criteria for any new system should be simplicity in applying the rules, affordability for tenants and viability for landlords.”
CIH and L&Q are hoping the report will encourage debate, enabling the sector to make a strong case to the Government for a new long-term rent framework that responds to the right policy objectives and delivers positive outcomes for social landlords and their communities.
Abi Davies added: “It is not the purpose of this report to conclude on any options but to invite the Government and the industry to think about the future of rents and rent-setting, with a view to agreeing a rent framework that delivers for all.
“Any review of rents cannot take place in isolation. It must also consider the options for future funding of new social and affordable housing, the relationship between rents and welfare policy, and the overall purpose of social housing. In determining future policy we need ministers to consider the balance and trade-off between affordability for households, landlords’ financial capacity and the demand on government finances.”