Social Housing Rent Direction published by DLUHC
On 14 December 2022 the government published its response to the Social Housing Rent Consultation that closed in October. This includes its Direction to the Regulator of Social Housing in relation to rents for 2023/24.
There are no major surprises here given the announcements in and surrounding the Autumn Statement, but this provides useful certainty at a time when Registered Provider Boards are approving the policies to be applied to rents for the coming year.
The key points are:
- A 7% cap must be applied to rent increases that are made in 2023/24 for social rents (including any fair rent tenancies) and affordable rents.
- The usual exemptions to the Rent Standard will apply (i.e. shared ownership, intermediate rent, specialised supported housing, temporary supported housing, student housing, PFI, care homes and local authority housing with a secretary of state waiver)
- Supported Housing will be exempt from the 7% cap. The definition of Supported Housing is unchanged.
- The Direction does not change the basis for setting new formula rents or affordable rents – so the 7% cap does not apply to re-lets or first lets made in this period.
- Service Charges – these remain outside the mandatory scope of the Rent Standard, but the Rent Policy includes a statement that RPs should endeavour to keep increases in services charges to the increases in rents and this now includes a reference to the 2023/24 7% cap. The government statement also states that the government is proposing to legislate to ensure that service charges are transparent and communicated effectively and that barriers to challenge when things go wrong will be removed. This is something to watch as the proposals develop.
- Shared Ownership Rents – remain outside the scope of the Rent Standard, but the government statement states that it is pleased to note that 90% of shared ownership is covered by RPs that have committed to the NHF voluntary limit and urges other RPs to make a similar commitment.
The RSH will now need to consult appropriately on an amended Rent Standard for 2023/24, but we expect this to be a short technical exercise to give effect to the Direction and for the new Standard to be in force prior to 1 April.