Government And The Rent Convergence Policy

  • In last month's spending review, the Communities and Local Government department has surprisingly revealed that it is ‘minded not to extend rent convergence beyond 2014/15'.

    The government is on a plight to cut short its policy of rent restructuring which was made to achieve convergence of social housing rents.

    Therefore, social landlords will not be able to increase rents by an extra £2 anymore under the rental formula to gradually align properties with their target rent and ensure that similar social homes in similar areas charge similar rents.

    Graham Duncan, deputy director of affordable housing regulation and investment at CLG, in a letter sent to housing bodies last week, said:

    ‘Having considered the issue carefully, we are minded not to extend rent convergence beyond 2014/15 - and the policy costings published by the Office of Budget Responsibility are based on that assumption.

    ‘We expect most landlords to have achieved rent convergence by 2015. By that point, rent convergence policy will have been in place for almost 15 years - this is a significant period of time for landlords to make full use of the rent flexibilities the government has provided, and most have done so.'

    Mr Duncan also added that CLG would set out details on ‘limit rents for local authorities in 2014/15 in due course'.

    The government plans to consult on the changes.

    Inside Housing has more on the Rent Convergence Policy.

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