restructuring programme in England was launched today.
The review will gather evidence about the effects of rent
Housing minister Jeff Rooker said the policy of rent restructuring
was delivering a fairer and more coherent system of social rents.
These remained well below what the private sector would charge for
'The government is committed to ensuring social housing remains
affordable for people on low incomes. Tenants will be protected from
large or sudden rent increases.
'To ensure our policy is on track we are using the three-year review
to gather evidence, data and intelligence on the effects of the
policy. We will examine specific issues where fine-tuning adjustments
to our approach would make sense for tenants and landlords.'
The review is led by a steering group comprising the ODPM, Housing
Corporation, Local Government Association, Association of London
Government, National Housing Federation and a tenant representative.
The aim is to complete the review by April 2004 and, following
consultation, to implement any changes justified by the evidence from
1. Over a ten-year period from April 2002, councils and housing
associations are being encouraged to set their rents within +/- 5 per
cent of the levels given by a national formula that reflects a
property size, location and condition.
2. This will cause similar social tenants renting similar homes in
the same area to have very similar rents regardless of their
landlord. It will put at end to the current situation in which the
rents charged by neighbouring councils for similar properties can
vary by a third or more, and housing associations can charge over
half as much again as councils for similar properties in the same
3. With the reforms, social rents will generally be higher on larger
properties in areas of high house prices and earnings - such as
London and the South East - and lower on smaller properties in areas
of low house prices and earnings such as Northern conurbations.
4. Social rents will remain affordable - at well below private sector
levels in most areas. Council rents will, on average, increase at
only half the rate at which they went up over the last ten years.
Housing association rents will also, on average, increase much more
slowly than over the last ten years.
5. A cap has been set on the weekly rent any social tenant will pay
as a result of the reforms, for example £102.70 for a 4-bedroom home
in 2003/04. Lower figures will apply for smaller properties. Where
rents are already higher than this, they should be gradually reduced
in real terms. For the small number of properties affected by the
safeguard, the maximum increase in future years will be RPI plus 1
per cent a year.
6. Social landlords are also expected to ensure no tenant faces a
rent increase of more than RPI + 1/2 per cent plus £2 a week a year.