Welsh social landlords able to set their own rent increases for 2025-26

Matt Dicks, national director at Chartered Institute of Housing Cymru, welcomed the news, including the minister’s “ongoing focus on ensuring that the right balance is struck between affordability of rent and ensuring that housing organisations can invest in new homes, retrofit exiting homes and provide an excellent service to their tenants”.

“The minister’s decision will also provide the sector with stability and certainty around rent setting over the coming years enabling housing associations and stock holding local authorities to set rents at a level that are fair and affordable for their tenants,” Mr Dicks said.

Rhea Stevens, head of policy and external affairs at Community Housing Cymru, said the decision gives the Welsh social housing sector “much-needed certainty and stability”.

She said: “Setting rent is one of the most important decisions not-for-profit housing associations make, and they don’t take it lightly.

“The permitted rent settlement is a ceiling, not a target, and housing associations will now set rents locally by engaging with tenants and using tools to understand affordability.”

Ms James also announced a programme of work to “properly embed affordability into our future social rent policy” and “review all aspects of the rent standard”.

A steering group of sector representatives has been established to oversee the delivery of the programme, she said.

“I am confident together we can deliver in this fundamental and far-reaching area of housing policy,” Ms James added.

In England, the government announced last month that the existing social housing rent settlement would be rolled over by a further year until April 2026.

It means annual rent increases will continue to be capped at CPI of inflation plus 1% for 2025-26.