Social housing leaders welcome government prioritising the sector but call for even longer rent settlement

The social housing sector has reacted positively to the government’s pre-Budget package of major policies announced over the weekend, although leaders are pushing for a 10-year rent settlement.

The government on Saturday announced a £500m top-up to the existing 2021-2026 Affordable Homes Programme (AHP) and a five-year social housing rent settlement, which will allow rents to increase annually by the Consumer Price Index measure of inflation plus 1%.

A long-term housing strategy, which will set out details of affordable homes funding post-2026, will be published in the spring alongside the government’s spending review, which ministers say will have a particular focus on social rented homes.

Sector figures welcomed the funding announcements and the confirmation of a longer-term strategy next year, but many have said a 10-year rent settlement is needed.

The government has announced it intends to bring in a five-year settlement but has also pledged to consult on alternatives, including a 10-year arrangement.

Fiona Fletcher Smith, chair of the G15 and chief executive of L&Q. said: “We have been very encouraged by the new government’s prioritisation of housing, and the measures that will be announced in the Budget this week are a welcome boost that demonstrate a real determination to fix the housing crisis.

“The consultation on a five-year rent settlement for social housing providers is a useful first step, but not the full measure that was urgently needed in this Budget. Not-for-profit housing associations need a 10-year deal to provide the long-term stability and confidence required to help deliver the Government’s target of 1.5 million homes in this parliament.”

Fletcher-Smith said the G15 welcomes the £500m funding and looks forward to the new AHP announcement next year but also called on the government to re-instate rent convergence and open the Building Safety Fund to housing associations.

Rachael Williamson, head of policy and external affairs at the Chartered Institute of Housing, said the funding announcements, alongside the Right to Buy changes, represent “a positive step towards tackling our broken housing system”.

She also said a five-year rent settlement is welcome but re-iterated a preference for a 10-year agreement.

She said: “To fully support effective planning and sustainable investment, a 10-year settlement is needed. This level of certainty would empower housing providers to make the long-term commitments required to deliver the affordable homes that our communities urgently need and provide greater transparency for residents.”

Kate Henderson, chief executive of the National Housing Federation, said she “strongly” welcomes the £500m top-up to the AHP.

She said: “This vital injection of funding, which we’ve been urgently calling for, will support housing associations to continue to deliver much needed affordable homes in the immediate term and prevent a collapse in delivery.”

She said the NHF welcomes the consultation on the new rent settlement saying it will “provide both transparency for residents and long term certainty and financial stability for social housing providers.”

Henderson said: “To achieve the affordable homes needed across the country, alongside this short term top-up, we look forward to a new long term housing strategy announced at the next spending review, including a significant boost in funding for social housing.”

Louise Gittins, chair of the Local Government Association said the Right to Buy measures will “support the replacement of sold homes and to stem the continued loss of existing stock.”

She said: “A five-year rent settlement is a step in the right direction in providing certainty for councils on rental income, but to really strengthen and provide stability to Housing Revenue Accounts, a minimum 10-year rent settlement is needed, alongside restoration of lost revenue due to the rent cap and a review of the self-financing settlement of 2012.”

Clare Miller, chief executive at Clarion Housing Group, said she welcomed the announcement of additional funding and the government’s commitment to long-term rent certainty for the social housing sector.

>>See also: Why convergence needs to be a part of any new social housing rent settlement

>>See also: G15 stresses sector’s ‘desperate need for certainty’ and calls for 10-year rent settlement

“Major investment in social housing via the Affordable Homes Programme will mean more affordable homes for those that desperately need that safe and secure foundation. We are ready to work with the government to realise our shared mission, which will lead in turn to better health outcomes, better education outcomes and better employment outcomes.”

Tracy Harrison, chief executive of the Northern Housing Consortium, said the £500m top-up will mean the group’s members “can continue building”. She said a five-year rent settlement will give providers more certainty to invest and changes to Right to Buy should help stem the loss of social homes.

Harrison said: “These are all great first steps, but there’s lots of work to do to in the run-up to the Spending Review and through the rent consultation. Our members need long-term financial certainty to improve the quality of existing homes, including making them warmer and greener, and to deliver new homes on the scale required to meet government ambitions.

“At the NHC we’ll strongly advocate for investment that supports delivery in the North where regeneration matters, and HMT value-for-money rules (and their narrow interpretation) have too often locked out much needed projects. Deepening devolution, with more local control over funding, will make sure government funds make the biggest possible difference to communities in the North.”