Today's Spending Review announcements in respect of the rent settlement are going to be significantly welcomed by the sector. They clearly show that the sector's responses to the consultation at the end of 2024 were listened to.

The Government has:

• Confirmed a rent settlement, continuing the current annual rent change cap of CPI + 1% for social rent properties.  That will be for 10 years, five years longer than set out in the consultation proposals; and
• Announced a further consultation about how to implement social rent convergence, allowing higher increases in rent where rent is currently below formula rent.

The longer-term nature of the rent settlement gives the sector as a whole and individual RPs much greater certainty for business planning moving forward. There can be no doubt that stability within the sector, especially at a time when so much investment is needed for both existing and new stock, is hugely positive. (I say this fully aware that the rent decreases in 2016 were introduced just one year after the Rent Standard 2015 came into force, and 10 years is not ingrained in law). 

The further consultation about the re-introduction of rent convergence is also really positive, even though no definitive plans have been made at this point in time. Rent convergence was not part of the Government's proposals when the consultation was published in October 2024, but there were strong representations by landlords and the sector about the need for this. 

I confess, I hadn't fully appreciated how many tenants were below formula rent and the quantifiable impact of that, until discussions about the consultation. Understandably, the push for rent convergence flexibility was something that featured heavily in the responses of the sector (including our own) and affected landlords. However, given that the issue was not specifically consulted upon, it does seem right that the specific proposal is consulted upon, and all (including tenants) have the opportunity to put forward their perspective, given the direct impact upon them. 

Alongside the further announcements for housing, particularly the £39 billion investment in the new affordable homes programme, today is a good day for housing.