The Department for Levelling Up, Housing & Communities is consulting on proposals to cap rent on social housing.

It said the move ‘could protect millions of tenants from the rising cost of living’.

The proposed cap on social housing rent increases would be put in place for the coming financial year, with options at 3%, 5% and 7% being considered.

Double-digit inflation

The government regulates how much social housing rents can increase each year. Currently this is set at up to the consumer price index (CPI) rate plus 1% – meaning potential increases next year of 11% in line with recent Bank of England forecasts.

The proposed cap would prevent rents for council and housing association houses from rising significantly, saving four million households £300 per year, according to the government.

Housing Secretary Greg Clark explained: “Putting a cap on rent increases for social tenants offers security and stability to families across England.

“We know many people are worried about the months ahead. We want to hear from landlords and social tenants on how we can make this work and support the people that need it most.

“The rent cap would be temporary and would apply from 1 April 2023 to 31 March 2024. The consultation also seeks views on whether to set a limit for 2024-25. The government understands this will impact social housing landlords and is engaging fully with the sector.”

Following the consultation, a final decision will be announced later this year, to give social housing landlords time to prepare for April 2023.