Chancellor Plans 10-Year Social Rent Formula

The UK government, led by Chancellor Rachel Reeves, is poised to implement a new formula for social housing rents that will increase annually by the Consumer Price Index (currently at 2.2%) plus 1% over the next decade. This change aims to provide long-term financial certainty for local authorities and housing associations, essential for boosting affordable housebuilding. The announcement is expected during Reeves' first budget on October 30, amidst calls from housing organizations for stable rent settlements to enable investment in new housing stock. While this move may offer some assurance to the sector, experts caution that it may not significantly impact housebuilding rates due to underlying financial constraints. The government also aims to tackle the housing crisis, with a target of constructing 1.5 million homes during this parliament. The plan addresses the historical decline in council housebuilding, which has fallen below 2% of new homes in recent decades.