Consultation published on a new Rent and Service Charge Standard in Wales

The Welsh Government has published a consultation on a new Rent and Service Charge Standard (‘a new Rent Standard’) for social housing in Wales following reviews of the current Rent and Service Charge Standard (‘the Standard’) which applies from 2019 to present day. It will apply to general needs and sheltered housing provided for social rent.

The framework and parameters in which social landlords can adjust the rents they charge are set out in the current Standard and, whilst this has provided a consistent framework for rent setting, there are pressures due to continuing economic volatility which have highlighted the need to embed affordability more strongly into policies.

The consultation ends on August 12th and it is open to all stakeholders including tenants, landlords and other interested parties.

The outcome of this consultation may lead to changes in how rent increases are calculated and potentially means rent increases may be adjusted to reflect the financial reality of the current climate. 

The current Standard allows social rent to be increased in line with inflation as measured by the Consumer Price Index (‘CPI’) . It includes provision that, should annual CPI inflation in September fall below 0% percent or increase to above 3%, Welsh Ministers can review and determine the maximum rent increase for the following year. Since the publication of the Standard in 2019, there have been continued economic disturbances resulting in three of the five annual social rent settlements being determined by Welsh Ministers. 

The consultation on a new Rent Standard will address key issues such as:

• affordability and service charges;
• amendments to the maximum allowable rent increases in a given year;
• target rent bands (introduced over 10 years ago to address rent volatility with the aim of promoting equity by encouraging social landlords to set rents within designated bands);
• improvements of existing social housing; and
• strengthening tenant involvement.

The outcome of the consultation will determine if, and how, the Welsh Government reflects their proposals, in the next Rent and Service Charge Standard.

A link to the consultation can be found below:

A new rent and service charge standard for Wales

For further information, please contact Gemma Bell or Jonathan Bowen.