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Hyde chief says annual rent settlements are ‘madness’
Annual rent settlements are “madness” and have “got to change”, Hyde’s chief executive has said.
Andy Hulme added that the uncertainty of income faced by housing associations “can only lead to worse customer outcomes” and inefficiency of service.
Speaking at the National Housing Federation’s (NHF) Finance Conference in Liverpool on Wednesday 13 March, Mr Hulme called for a long-term rent settlement from central government to allow landlords to plan over a longer timeframe.
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He said: “It is madness. We spend… £200m a year maintaining and improving our homes, yet we don’t know until three months before what the rent will be and therefore whether we’ve got the money to do that.
“That’s crazy. Every government, whether it’s Labour, Conservative, whoever, should recognise that that is crazy. And that can only lead to worse customer outcomes, inefficiency of service, inconsistency of service… That’s got to change.”
He added: “It would be nice to get a settlement and have a bit of certainty.”
Mr Hulme’s call for a long-term rent settlement was echoed by Fiona Fletcher-Smith, chief executive of L&Q and chair of the G15, on a separate panel at the conference.
Ms Fletcher-Smith said: “Every fiscal event, G15 [the group of London’s largest housing associations] send a letter in… and every time it says ‘Could you please give us certainty of rent?’
“And I know it’s a funny time to be asking for it before going into a general election, but how on earth can you plan anything if you’ve no idea what your rents going to be each year? Just give us some certainty… It really makes a difference.”
The NHF and the Chartered Institute of Housing called for a long-term, inflation-linked rent settlement and the reintroduction of rent convergence ahead of this month’s Spring Budget, to no avail.
Under a rent deal that lasts until 2025, social housing rent rises are usually capped by the government at a maximum of the Consumer Price Index (CPI) of inflation plus 1%, set in September every year.
However, as a result of rising inflation and the cost of living crisis, in November 2022 chancellor Jeremy Hunt capped rent increases at 7% for the current financial year, 2023-24.
At the start of 2024, the government announced a 7.7% social rent cap for 2024-25. This is based on the September 2023 CPI figure, which was 6.7%.
In September, then housing minister Rachel Maclean said that a post-2025 rent settlement with central government will be decided in the first half of 2024.
The rent formula from 2025 onwards will be implemented by the government that wins the next election – due to be held by January 2025 at the latest – making it subject to political change.
Inside Housing interviewed Andy Hulme at the beginning of this year. Read the interview here.
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