The Regulator of Social Housing (RSH) has launched a new consultation on a revised Rent Standard for registered providers of social housing that will come into effect from 1st April 2020, the government has announced.
The proposed changes are a result of the Secretary of State for Housing, Communities and Local Government issuing a Direction in February 2019 to RSH, to set a new Rent Standard, following the government’s consultation in autumn 2018.
The Government’s Policy Statement on rents published alongside the Direction will also be taken into account by the Regulator. The Regulator is also required to have regard to the Government’s Policy Statement on rents, which was published alongside the Direction.
What changes are called for?
The RSH has been called to regulate rents charged by social housing stock-owning local authorities (local authority registered providers), which is aimed at providing equal regulation to both council rents and private registered providers.
It is also requested that rent increases be restricted on social rent and affordable rent properties by up to the rate of CPI inflation plus 1 per cent annually from 2020, covering a period of at least five years. This is designed to strike a balance between the interests of landlords, tenants and taxpayers.
According to the government’s recent press release, these changes will entail the introduction of new systems to collect information from local authorities on rents, in order to reflect the government’s Direction.
Stability for the social housing sector
Fiona MacGregor, chief executive of RSH commented: “This consultation focuses on whether we have appropriately reflected the Government’s Direction to us. The Direction itself has previously been consulted on by Government. Our aim is to ensure that the setting and management of rents is clear and easy to understand for all registered providers of social housing.”
She added: “The long-term rent settlement should help provide a stable financial environment for the social housing sector to make the best possible use of its resources in supporting the delivery of new homes and effectively managing and maintaining properties, while protecting the interests of social housing tenants.”
To prepare for the new Rent Standard coming into effect, local authorities have the opportunity to submit data in a pilot year to ensure that the transition to regulation of local authority rents goes smoothly.
This will also allow the identification of potential data issues before the regulatory role officially starts.
Following this consultation RSH will publish its response and a finalised Rent Standard in advance of 1st April 2020. The consultation will remain open until 30th July 2019.