Social rents can rise by up to 2.7% next year

There are concerns that this will not be enough to fix the sector’s financing issues and combat the large cost increases it has had to contend with.

Andy Hulme, chief executive of The Hyde Group, said the latest figures show the current metric for determining rent rises was “not sufficient in today’s environment”.

“At Hyde, we’ve seen demand for repairs increase by more than 60% since 2021, while the cost of materials for repairs has soared – greatly exceeding core inflation and the rents we can charge,” Mr Hulme said.

He added that while the government has pledged to deliver the “biggest boost to social and affordable housing in a generation”, this will not be possible if it uses “business-as-usual solutions”.

“Years of cuts and rent caps have made it extremely difficult for social housing providers to set our own budgets and know how much money we can set aside to invest in our customers’ homes,” he said.

Analysis by the G15 has revealed that almost 300,000 social homes managed by the group of large London landlords have been loss-making since the end of rent convergence. This equates to losing out on £211.4m a year in resources to invest in repairs and maintenance.

“We also need long-term funding for the next Affordable Homes Programme (AHP) as soon as possible, so we can work with private investors to bring in investment to help tackle England’s housing crisis,” Mr Hulme added.

Homes England’s next AHP is not expected to be announced until spring 2025.

John Guest, national head of social housing at RSM UK, said the drop in inflation will put “further pressures” on operating margins, but added that it could mean the Bank of England is ready to cut interest rates.

In August, the G15 called on the government to introduce a minimum 10-year rent settlement, alongside a guarantee that it cannot be altered.

They also urged the government to bring back rent convergence.