With around 3.7 million social renters currently rely on housing benefit to pay their rent, local councils and housing associations say that a boost to their income is urgent.
Chancellor Rachel Reeves is reportedly considering increasing social rents by more than inflation for the next 10 years to save local councils from financial ruin. Sir Keir Starmer has just given his first speech as Prime Minister in the Downing Street rose garden and his message was clear: the future is not going to be rosy.
Social rents are paid by housing benefit. They provide a revenue stream for local councils and housing associations to maintain the homes they own and provide a good service to tenants, as well as build new ones.This is why local councils and housing associations say that a boost to their income is urgent.
The options believed to be on the table include raising cash through inheritance tax or capital gains tax or sticking to plans for a 1 per cent public spending increase but making cuts to some Whitehall departments. Nonetheless, Darren Baxter, the principal policy adviser on housing and land at the Joseph Rowntree Foundation – an independent organisation which researches poverty – suggested cracking down on a tax loophole.
However, the Government forecasts the number of social renters paying rent via housing benefit to rise to 3.8 million next year, meaning the bill would rise.: “We had four years of cuts to social rents between 2016 and 2020. This was followed by a return to CPI plus 1 per cent between 2021 and 2023. But then rents were capped again below inflation by Jeremy Hunt.”
“Returning to the pre-2016 norm of allowing rents to rise slightly above inflation will allow social landlords to invest in safety.” Andy Hulme, chief executive of the Hyde Group, one of the largest housing associations operating in London, the South East, the East of England and the East Midlands, said: “For the past decade, rent setting policy for social housing in England has been verging on madness.
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