Welsh Government unveils a social housing rent cap

Welsh Government unveils a social housing rent cap

10:19 AM, 17th November 2022, About A year ago

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Social housing landlords in Wales will face a rent cap of 6.5% from next year – and there’s an eviction ban on tenants who engage with their social housing landlord.

Climate change minister Julie James has confirmed the cap for social rents for the next financial year, along with a package of support for tenants.

The minister outlined a series of commitments she had secured with social landlords including ‘no evictions due to financial hardship for the term of the rent settlement in 2023-24’ where tenants engage with their landlords.

‘Need to set rents for the next financial year’

Ms James explained: “I have been clear that no social tenant will experience any change in their rent until April 2023, but I do need to set rents for the next financial year now to give the sector time to plan.

“From April 2023, the maximum limit which social rents can charge will be 6.5% – an increase well below the rate of inflation.

“This is the maximum any landlord can charge across all of their properties.”

‘Landlords will carefully consider affordability’

She added: “No landlord is required to charge the maximum and I know all landlords will carefully consider affordability and set rents as appropriate across their housing stock.

“Within the overall settlement, landlords may freeze, lower or raise individual rents based on a number of local factors of which affordability is a key consideration. The rate is a maximum, not a requirement or a target.

“We know that any increase in social rent may impact those social tenants who pay all or part of their own rent.

“These tenants, in particular, need to be protected from being placed into financial hardship through trying to cover the costs of keeping a roof over their heads.”

‘Builds on existing engagement with tenants in rent-setting decision’

She continued: “Finally, our agreement with social landlords builds on existing engagement with tenants in rent-setting decisions, including explaining how income from rent is invested and spent.

“Working in partnership with tenants, the Welsh Government, funders and other partners will develop a consistent approach to assessing affordability across the social housing sector in Wales.”

In Wales, approximately three-quarters of social tenants have all or part of their rents covered by benefits – so any increase in rent will be covered by benefits paid by the UK government.

‘A direct result of the Labour-made housing crisis’

In response, the Conservative party says the Welsh government rent cap on social housing is ‘a direct result of the Labour-made housing crisis’.

The Welsh Conservative shadow minister for housing, Janet Finch-Saunders, said: “It is incredibly disappointing that Labour ministers are having to resort to rent caps in Wales to combat rent rises which are a direct result of the Labour-made housing crisis.

“As a result of Labour’s failures, only 6,000 houses are being built per year, less than half of what we need.

“If Labour ministers spent half the time addressing the shocking shortage of housing across Wales as they did planning on putting more politicians in Cardiff Bay, a lot more could get done.”

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