Chancellor Rachel Reeves is set to hit social tenants hard with a rent hike bombshell in October’s Budget, the Financial Times reports.
According to sources, Reeves plans to jack up annual rents in England by the Consumer Price Index (CPI) rate—currently 2.2%—plus an extra 1%. The move is designed to give housing associations and councils a steady cash flow, helping them tackle massive debts and maintenance nightmares.
But there’s a catch – while the bigwigs at housing associations will be popping champagne, the millions of tenants facing these hikes won’t be so thrilled. Critics say it could push living costs through the roof and send the government’s benefits bill soaring.
SIMILAR FORMULA
The idea isn’t new. The Tories tried a similar rent formula in 2012 under David Cameron but later scrapped it. George Osborne then delivered below-inflation increases in 2015 to cut housing benefit costs, only for the Conservatives to announce another CPI-plus-1% plan in 2020. But with inflation skyrocketing, they capped rent hikes at 7% last year.
Labour is under pressure to fix the UK’s housing crisis, with over 109,000 households stuck in temporary accommodation, including 142,000 kids. Deputy PM Angela Rayner promises “rent stability” and says this Budget will deliver the “biggest increase in affordable housing in a generation.”
Housing experts and council bosses are desperate for a long-term deal to patch up England’s broken housing system.
The Local Government Association warns that without it, councils will struggle to invest in new homes or maintain the ones they’ve got. Meanwhile, Shelter’s Polly Neate demands protection for tenants from runaway rent rises that could push them into homelessness.
The government says more details will drop in the Budget.
Social rents are set to rise.
