Chancellor commits to five-year rent settlement, further £500m for Affordable Homes Programme
The Government is to consult on a new five-year social housing rent settlement aimed at giving the sector more long-term certainty on funding.
It intends to increase the cap with Consumer Price Index (CPI) inflation figures plus an additional 1%.
The consultation will also seek views on other potential options to give greater certainty, such as providing a 10-year settlement.
The Chancellor of the Exchequer, Rachel Reeves, has also confirmed £500m in new funding for the Affordable Homes Programme, which is expected to deliver up to 5,000 new affordable social homes.
This additional funding brings total investment in housing supply to more than £5bn and supports the delivery of 33,000 new homes with £128m earmarked for housing projects across the country, the Government said.
The announcements come ahead of Reeves’ first Budget this week (30 October).
The Government said there will also be changes to the Right to Buy scheme, including reduced discounts and greater protections for newly-built social housing.
Councils will also be able to keep 100% of the receipts generated by a Right to Buy sale.
“This will enable councils to scale-up delivery of much needed social housing whilst still enabling longstanding tenants to buy their own homes,” the Government said.
The Chancellor of the Exchequer, Rachel Reeves said: “We need to fix the housing crisis in this country. It’s created a generation locked out of the property market, torn apart communities and put the brakes on economic growth.
“We are rebuilding Britain by ramping up housebuilding and delivering the 1.5 million new homes we so badly need.”
Responding to the Government’s housing announcements, Cllr Louise Gittins, Chair of the Local Government Association, said: “We are pleased the Government has acted on our call to increase Affordable Homes Programme funding. We have made the case for councils to be empowered to build more affordable, good quality homes quickly and at scale and this will boost councils’ ability to build desperately-needed affordable housing for local communities.
“It has become increasingly impossible for councils to replace homes as quickly as they’re being sold through the Right to Buy (RTB) scheme. The LGA has long-called for reform to RTB and these positive measures will support the replacement of sold homes and to stem the continued loss of existing stock.”
Cllr Gittins added: "A 5-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. This would better support long-term business planning to ensure councils can deliver high quality homes and associated support for their tenants.
“Councils stand ready to work with the Government to increase affordable housing and help people on council housing waiting lists and record numbers stuck in temporary accommodation.”
Lottie Winson
