Two months later than originally expected, we now have the Government's decision regarding rent convergence.

It has been confirmed that for social rent properties below formula rent, the maximum annual rent increase a landlord can apply is:

• CPI + 1% this year, i.e. no convergence
• CPI + 1% plus up to £1 from 1 April 2027
• CPI + 2% plus up to £2 from 1 April 2028 for the remainder of the rent settlement period

Ultimately, the announcement will be welcomed by the sector. In the long-term (if 2 years counts as long-term?!), the additional sums will generate much-needed income for relevant landlords at a time of increasing costs and obligations. Ultimately, affected tenants will pay more than they would without convergence, but the phased approach should help from an affordability perspective and does seem to strike a fair balance. Tenants also still, of course, benefit from the ceiling of formula rent.

For those organisations that have been holding off pressing the print button on rent review letters, they will be pleased to now have the announcement. However, I know lots of organisations were preparing for different potential scenarios, with different draft letters and calculations, so there will be some frustration that all that preparation work wasn't in fact needed this year.

For more information

For more information on rent convergence, please contact me.