Limitations on rental increases

It will come as no surprise that rental prices are continuing to rise across the country in response to high demand and inflation. Over the last couple of months the Government has been exploring the impact of these rising costs on renters, particularly those renting social or affordable housing.

Social Housing rental increases

Housing associations have been considering the impact of rental increases for social and affordable housing tenants. New limitations are being implemented in April 2023 to cap rental costs for social housing tenants and provide more security to renters who are concerned about rising rental costs.

Why does action need to be taken?

Until now, rental costs for Social housing have been permitted to increase by up to CPI+1% annually. However, in a concerning report the Bank of England forecast that CPI would be expected to reach 9.9% in Q3 of 2022 - causing significant rental increases for social housing tenants across the country in 2023-2024. Causing strain on renters as they struggle to cope with rising living costs. In response to these concerns, the UK government launched a consultation in October 2022 with the objective of capping rental increases for social housing renters. This consultation proposed to protect existing tenants by capping social housing rent increases (from April 2023).

It is possible that many social housing providers would independently choose to cap property rental below CPI+1% without Government intervention. However, by imposing a rental increase limit tenants who are in exceptional circumstances will have more protection against the rising costs.

The Government has now confirmed that these rental increases will be capped at 7% from April 1st 2023, this change also applies to shared ownership tenants. A detailed report of the October consultation can be found here.

The new cap on rental increases for social housing tenants in 2023 should offer a sense of security and protection to tenants concerned about rental increases.