The current social rent policy will continue to apply in Wales in 2016/17 after an announcement by communities and tackling poverty minister Lesley Griffiths.
The decision follows a modelling exercise conducted to assess the impact of the 1% a year cut in rents imposed on councils and housing associations in England for the next four years in the July Budget. Welsh social landlords feared this would undermine their finances and put thousands of new homes at risk.
The formula caps Welsh social landlords’ rent increases at a maximum of CPI +1.5% plus £2. Based on the September inflation rate of 0.1%, that means rents will rise by 1.4% in 2016/17.
Welsh Government said the decision means social landlords can continue to invest in their properties and ensure the supply of affordable housing in Wales is maintained. It also allows social landlords to continue to provide key services to tenants, such as job and training opportunities, and ensure they can meet the Welsh Government’s quality standards for social housing. Lesley Griffiths said:
‘Maintaining our social rent policy provides stability for social landlords and enables them to continue to provide the good quality, affordable housing Welsh families need – as well as a whole host of invaluable tenants’ services.’
Stuart Ropke, chief executive of Community Housing Cymru, said:
‘We are pleased that Welsh Government has made the decision to confirm the rent settlement which was previously agreed between CHC and WG for 2016/17. A secure rental income stream alongside continued financial support from Welsh Government is vital for the future viability of Welsh housing associations, and this security means that the sector can continue to build more homes and deliver services in communities across Wales.’
Support from the decision has also come from Welsh Tenants:
‘While we understand that some tenants are facing real hardship, many tenant representative members we have spoken to agree that reducing rents by 1% per week was hardly likely to make a profound difference to their standard of living while recognising that lenders confidence and other factors would impact heavily on the sector.
‘We do however recognise that social landlords need to do more to improve value for money of some aspects of their service and welcome efforts being made to improve service quality while also looking to drive costs down for renters.’