Delivering local affordable rents
The Welsh Government has set rent policy for a five-year period from April 2020, responding to the case Housing Associations have been making for many years: that affordable rents are best set locally, responding to local circumstances and in dialogue with tenants.
The Minister for Housing and Local Government has agreed an annual rent uplift of up to CPI + 1% each year for five years until 2024/25, subject to annual inflation. She has also agreed that rent for individual tenants can be reduced or frozen or rise by up to £2 over CPI +1%, as long as the total rental income does not exceed CPI +1%. This settlement is not an automatic uplift, rather the parameters within which Social Housing Landlords can make judgements in partnership with tenants about how best to deliver affordable rents for their homes.
This is a rent policy we have long made the case for, and a welcome commitment to giving Housing Associations the certainty and flexibility needed to deliver affordable rents that respond to local circumstances. However, today’s announcement isn’t a starting gun. The journey has already begun. Earlier this year, Housing Associations made a commitment to deliver local affordable rent policies and established a working group to explore the issues.
The working group agreed to develop a suite of tools to support Housing Associations to develop local rent policies, including sector wide affordability principles, a tool to understand housing related costs for tenants, and support to engage and make decisions with tenants.
And we’re making progress:
- We’re exploring the possibility of adapting an affordability tool used in Scotland, developed by the Scottish Federation of Housing Associations and HouseMark, in Wales.
- We’ve agreed some initial affordability principles that a newly formed task and finish group will be developing further in the coming weeks before sharing more widely for feedback.
- We’re hosting a webinar with Merthyr Valleys Homes and Trivallis in January to learn from their experiences of implementing local rent policies.
- We’re working with TPAS Cymru to design an event for tenants in Spring 2020 to discuss how tenants would like to participate and engage in local rent setting discussions.
- In the new year, we’ll be exploring co-production tools and techniques and sharing the best of these with you to support your work with tenants.
Today’s letter from the Minister makes clear that all social landlords will be expected to demonstrate robust and careful consideration of affordability and the views of tenants when setting local rents. The programme of work we’re developing puts us in a strong position to demonstrate this and to deliver rents that are truly affordable for tenants and allow Housing Associations to continue to deliver the high quality, safe, warm homes and communities that Wales needs.