Jeremy Hunt has announced that social and affordable rent increases will be capped at 7% as of April 2023 for a period of 12 months to combat the cost of living crisis and in response to “unprecedent global headwinds” the country is facing.
The decision has been made following the consultation which closed on 12 October and is a higher cap (and better outcome) than many RPs were expecting. In the consultation, the Government advised that its preference was 5%, but it seems that the ever increasing economic uncertainty, and changes in Government since August 2022, has led them to reconsider. The higher cap is similar to that imposed in Wales (6.5%) and will give RPs more income than anticipated to continue to deliver their vital services and development programmes, and help those RPs who need a little more “financial headroom” when it comes to financial viability. As stated in the consultation, the rent cap will not apply to shared ownership rents, leaving RP boards with decisions over what to do when considering rent increases for shared owners.
We will be sending out further information about the cap in the coming days and scheduling webinars so please keep any eye out for further information.
For more information, please contact Samantha Grix.