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Network Homes proposes fairer social housing rents

Network Homes has launched a new report which proposes rebalancing submarket rents to establish a fairer social housing rent system and scrapping the household benefit cap.

The Levelling Rents report argues that high affordable rents reduce living standards and work incentives. Social landlords could reduce the number of high affordable rents by raising rents which are below the target average.

The household benefit cap currently means that some of the poorest households in the country are being hit hardest by the rising cost of living – and if the government doesn’t change, the cap will gain no protection by overall rising levels of benefits.

Raising all below-average social rents each year so that they are, on average, £2 more per week above their usual yearly rent increases would allow for the highest affordable rents to be reduced over time.

Currently, social landlords can raise rents by the Consumer Price Index in September plus 1% per year, which would mean rents could increase by 11.1% – when most housing associations are facing costs rising at a much higher rate (e.g. cost of maintenance is increasing by 15% per year). But this is likely to change from April 2023 following the Government’s recent consultation on capping social rent increases at either 3, 5 or 7%. Previously, the Government reduced rents by one per cent a year through 2016-2020.

The report finds three major problems with the current social rented system:

It’s complicated, making it difficult to explain to residents and costly to administrate for landlords.
It’s unfair in the sense that properties of the same size and quality in the same location are sometimes charged different rents.
It involves some rents that are often extremely high by traditional standards, i.e. Affordable Rents – which are made less affordable to some families whose benefits are capped.

According to Levelling Rents, the current system’s complexity makes it difficult for social landlords by increasing administrative costs around rent setting and raising the risk of residents being charged incorrect or unfair rents.

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