Savills has published research assessing the impact of
increasing rents for general needs social housing by CPI +1%
for the next 10 years. It concludes: "By the end of a 10-year
rent settlement in 2036, general needs rents would still be at a
greater discount from private rents than they were before the
pandemic".
Looking back over the last 10 years, private rents have risen by
around 10% in real terms (faster than inflation as measured by CPI)
while social rents have fallen by 15% in real terms, principally
because of the four-year period of 1% rent reductions from 2016 to
2020 and the rent increase cap of 7% imposed in 2023.
Looking ahead, private rents are assumed, based on past trends,
to increase broadly in line with average incomes. After 10
years of CPI + 1% increases social rents would still provide
tenants with a greater percentage discount on private market rents
than in 2014 or 2018. The discount varies among regions, with
social rents a much lower percentage of market rents in London than
in some parts of the North. In nearly all local markets, CPI
+ 1% rent increases would not bring social rents up to more than
80% of market rents.