20 April 2007
Housing associations are calling for greater freedom to raise rents above inflation.
At present, annual increases are limited to 0.5% above the retail price index, under a formula aimed at aligning all social housing rents by 2012.
But the National Housing Federation wants the limit to rise to 1%. It argues that the current formula prevents registered social landlords from increasing rents in areas where there is high demand for social housing.
It also limits the sums that RSLs can invest in new homes and community services.
In a letter to housing minister Yvette Cooper, the federation said a revised formula of RPI plus 1% would allow RSLs to raise an extra £450m per year while adding just 30p to the average weekly rent.
Most of the extra money would be raised in London and the Southeast.
'It's a relatively small increase that wouldn't create hardship,' said Nick Powell, the NHF's policy leader. He stressed that it would be up to individual associations whether they opted for the larger increases.
Councils, however, are likely to oppose larger increases and point out that any change to the formula could threaten the target of aligning all social rents.
PFapr2007
