VULNERABLE people could be put at risk of homelessness under Labour plans to increase social rent by 1 per cent more than inflation for the next 10 years, charities have warned.
Ministers were urged to tie the proposed rent increases in with further targeted support to prevent benefit claimants from being caught out by sudden rises in inflation.
Chancellor Rachel Reeves reportedly intends to introduce the rent hikes as part of a 10-year formula to boost the building of affordable homes in October’s Budget.
Under the proposals, annual rents in England will rise by the CPI measure of inflation plus an additional 1 per cent.
It is claimed this will provide cash-strapped housing associations and councils certainty over cash flows to allow them to build more homes. Ms Reeves has repeatedly ruled out direct housebuilding by government.
Dr Tom Kerridge, policy and research manager for homeless charity Centrepoint, said: “At the core of this housing crisis are chronically underfunded local councils and convoluted planning processes which have left social building starts totally stagnant while private rents continue to skyrocket.
“We welcome more financial incentives aimed at dramatically boosting the building of social housing. It’s vital, however, that any rent increases are reflected in extra support for those receiving benefits, especially at times when inflation is particularly high.
"Nearly half of all households on waiting lists in England only require a studio or one-bedroom home but not nearly enough of these units are being built.
“That needs to change — we need to encourage councils to build the right kind of homes so young people can escape homelessness and secure somewhere safe and stable to live.”
Housing charity Shelter’s chief executive Polly Neate warned tenants also need protection to ensure their rents remain affordable “as inflation can spiral out of control very quickly, there need to be mechanisms in place to protect tenants from extreme rent rises that put them at risk of becoming homeless.”
St Mungo’s executive director Sean Palmer said: “With the UK facing low availability of housing and soaring costs, any long-term rent agreement needs to work for housing providers and tenants.
“For tenants buffeted by the cost-of-living crisis, continued investment in Housing Benefit is also essential to prevent homelessness.”
The Local Government Association said a long-term settlement was “vital” to ensure councils could regenerate their existing stock.
Social rents are tied to local incomes and have historically been about 50 per cent of the market rate. They are set by a formula controlled by central government.
The Ministry of Housing, Communities & Local Government said: “Work is ongoing to fix the foundations of our housing and planning system and we will set out our plans at the next fiscal event.”
