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SHAC calls on government to freeze housing association rents
The Social Housing Action Campaign (SHAC) is calling on the government to freeze rent and service charges for housing association tenants amid the cost-of-living crisis and a 40-year inflationary spike.
SHAC said that rising energy costs that could see bills rise by £300 a month and an impending recession means people are already on tight budgets and cannot afford to pay a rent increase of potentially more than 10%.
Since 2020, social landlords in England have been able to increase rents by the rate of Consumer Price Index (CPI) – which measures inflation (the rising cost of living) – plus 1% each year.
But CPI rose by 9.4% in the 12 months to June 2022, up from 9.1% in May. The Bank of England has warned that inflation could hit 13% by the end of the year.
If the upward trend continues, it means that councils and housing associations could raise rents by more than 10% from April 2023.
Comparatively, when the rent for 2022-23 was set last September, CPI was 3.1%.
Last year, all major English housing associations raised their rents by the maximum allowed.
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The call from SHAC comes as ratings agency S&P warned that housing associations’ credit ratings could suffer as they tackle the issues of rent levels and rising inflation.
Its analysis showed that more than a quarter of the 43 associations it rates could see “very weak interest coverage” if they are unable to cover cost increases by boosting revenues or scaling down costs.
SHAC, which is supported by the Radical Housing Network, Homes for All and Unite the Union, said that housing associations can absorb inflationary costs and do not need to pass them on to tenants and residents.
A spokesperson for the Department for Levelling Up, Housing and Communities (DLUHC) said social landlords can apply lower rent increases if they wish to do so.
“We set clear limits on how much social housing rents can increase and the limit is CPI plus 1% per year.
“Social landlords are free to apply lower increases or reduce rents if they wish to do so and we expect social landlords to carefully consider the impact on their tenants when making decisions about rents,” they said.
The spokesperson said DLUHC recognises that people are facing financial pressures and has offered a £37bn support package, while councils were given an extra £65m to support low-income households with rent arrears.
The National Housing Federation (NHF), which represents housing associations across England, said it could not comment at this time.
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