Councils and other providers of social rent homes in England will be able to increase weekly rents on properties currently let at below the maximum that could be charged, if they were re-let to a new tenant.
The LGA has long called for the reintroduction of rent convergence, to help provide additional support for council housing finances.
The Government has said providers will be able to charge up to £1 per week extra from 1 April 2027, and up to £2 per week from 1 April 2028, to bring rents on some social accommodation into line with the ‘formula rent’ on similar properties.
Cllr Tom Hunt, Chair of the LGA’s Inclusive Growth Committee, said: “This is an important step in the right direction, as more must be done to ensure that all people can live in a safe, warm and decent-standard home. While the phasing of its implementation may impact the delivery of some new homes in the short term, measures within this package will give councils greater certainty and confidence to invest in the long term.”
The package also outlines changes to the housing revenue account (HRA) threshold, including that councils won’t have to set up an HRA until they own 1,000 homes, up from the current figure of 200.
These changes will help councils deliver new social and affordable homes more easily, said Cllr Hunt, adding: “It will be important that councils are properly funded so they can deliver at scale.”