It is fair to say the rest of the Hardman household didn't quite share my enthusiasm for wanting to know the published inflation figures around the breakfast table this morning. After months of speculation, this morning the Office of National Statistics published inflation figures for September 2022. Key for social landlords is:
- 10.1% increase in Consumer Price Index (CPI) which in theory means up to an 11.1% increase in rents
- 12.6% increase in Retail Price Index (RPI) which means a 13.1% increase in rents for shared owners whose lease terms set out an increase in rent calculated by reference to the September RPI figure.
Of course, amongst the speculation, we've had the Government consultation about capping rent increases for tenants, the outcome of which we all await. In submitting our consultation response, we highlighted the financial consequences of a rent cap (which many of you will have evidenced based on your own organisations) and stressed the importance of considering other options and rent convergence.
The Government consultation and the proposed rent cap do not apply to shared owners, where rent increases are governed by the terms of the lease and not rent regulation. We are having lots of conversations already with clients about options here, limiting financial impact in the long-term for landlords balanced with affordability for residents. Now that RPI is known for September, landlords have some more certainty in what that financial model looks like for residents with a September RPI increase and can make firm decisions about their approach. Do get in touch if you'd like to discuss this with us.
Measures of inflation and prices include consumer price inflation, producer price inflation and the House Price Index.