G15 response to social rent ceiling consultation
The G15 has responded to the government's consultation on proposals to introduce ceilings on social rent increases for 2023/24.
As not-for-profit organisations that work with and support some of the least well-off people in the country, G15 members are deeply concerned by the impact cost of living pressures are having on the people we provide homes to.
G15 members have increased support for residents, including providing £5.8m for vital crisis support this year, and helping residents to secure £44m of financial gains last year. This is in addition to the work we are doing to bring down people’s energy bills by improving the energy performance of the homes we provide, alongside charging social and affordable rents far below market rates at around £125 per week on average (around 50% of market rents).
We are also urging the government to provide further targeted support for those most affected by the cost of living pressures, especially around sky-rocketing energy bills that are driving much of the challenges people are facing. Crucially, this must also coincide with the uprating of social payments in line with inflation, which is something that we have repeatedly called for. Almost 7 in 10 general needs residents living in the homes we provide rely on this support, and for many people this covers the entire cost of renting their home.
Any resident facing financial challenges should contact their housing provider as soon as possible to discuss what support and advice can be provided. G15 members have also reconfirmed their commitment to the NHF eviction pledge and will support people as much as we can where they are engaging.
In response to the consultation we have made clear:
- If no ceiling was introduced on social rents, it would be extremely unlikely that any organisation would seek to apply the maximum possible increase next year under the existing social rent setting standard.
- In getting the balance right on rent setting, we are committed to maintaining affordability for residents.
- A ceiling on social rents of 3% would see a reduction of over £2bn in re-investable rental income for G15 members over 5 years. Over 30-year business plans, this would see re-investable income reduced by just under £18bn for G15 members. At the 7% cap level, the impact is still extremely significant, with a reduction of more than £1bn over 5 years, and £9.3bn over 30 years.
- Ensuring the safety of all the homes we provide is our number one priority, but regrettably the consequences of low rent ceilings could potentially see planned building safety works slowed down, as well as investment in existing homes having to be delivered over a longer period. Fewer new affordable homes will be built, progress on decarbonisation and retrofitting will be curtailed, and the financial capacity of organisations will be reduced if key ratings and measures are negatively affected.
- Mitigations must be announced alongside any rent ceiling decision to prevent significant reduction in investment in existing and new homes.
We recognise the importance of residents’ voices and input across all areas of our activity, including on this issue. The G15 brought together a group of residents to discuss this consultation and the views of this group are included in this response, with participants’ permission, and demonstrate the difficult balance that has to be struck in making a decision on rent setting.
Geeta Nanda OBE, G15 Chair and Chief Executive of MTVH, said:
“The issues we are looking to balance are some of the most challenging I have seen, or had to grapple with, in the 30 years I have worked in housing.
"We are approaching this with a commitment to continuing to provide good, safe, and affordable homes that help people to live well. However, as anyone can see, there are real risks that need to be carefully considered, alongside ensuring residents are supported in the face of the cost of living challenges many face.”
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