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G15 urges rent settlement of ‘minimum’ 10 years
London’s biggest landlords have called on the government to introduce a “minimum” long-term rent settlement of 10 years and a guarantee that it will not be altered.
The call came in a new report from the G15 that lays out the funding challenges facing the capital’s housing associations.
The group said a new 10-year settlement should have “cast-iron guarantees” that it cannot be changed “partway through” and should be tied to inflation.
The plea is a nod to the uncertainty the sector has faced around rents since George Osborne scrapped a 10-year settlement in 2015 when he was the chancellor.
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“Rents make up the bulk of our income, so if we know what our rental income will be, we will be able to access private finance at cheaper rates,” the report said.
The new government has promised “rent stability” for social landlords, with chancellor Rachel Reeves due to present her maiden Budget in October.
Currently, social landlords will be allowed to increase rents by 1% above Consumer Price Index inflation from the 2025-26 financial year.
In its new report, the G15 called for a return of rent convergence, which was also abandoned by the coalition government in 2015.
The group said “clarity” was also needed on what housing association rental income is expected to pay for.
It added: “Discussions around accelerating improvements to property condition, retrofit or decarbonisation should consider dedicated funding streams, similar to the Decent Homes programme instituted under the previous Labour government.”
The G15 called for social housing residents to be at the “forefront” of conversations on rent changes. “It is vital that any changes do not result in unaffordable rent rises for social renters,” the report said.
On building safety, the group renewed calls for housing associations to be allowed access to the government’s Building Safety Fund.
The G15 previously said it expects its members to have spent £3.6bn by 2036 on building safety works. The latest report said its members will now be spending £4bn on “essential building safety works”.
The extent of the financial pain felt by some of London’s biggest landlords was confirmed with Notting Hill Genesis and MTVH both reporting significant annual deficits in their latest results.
The G15 claimed that the 289,000 homes for social rent provided by London’s housing associations save Londoners £4.8bn in rent, with rents on average 70% lower than market rates, at £130.27 a week. This is according to research it carried out as part of the report.
Fiona Fletcher-Smith, chair of the G15, said: “With the government setting an ambition for 400,000 new homes in the capital, it is critical that our housing supports Londoners at all income levels.
“Social rent homes are a vital part of the mix, and housing associations are ready to work with the government to provide the affordable homes London and Londoners so desperately need.”
The new Labour government confirmed last month that grant funding for affordable homes and certainty around rent-setting will be brought forward at the next Spending Review.
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