Time to Build

We are closely monitoring government policy against policy opportunities we highlighted to government. This will allow us to re-raise suggestions, holding government to account.

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In the 2024 Autumn Budget, Chancellor Rachel Reeves proposed a five-year social rent settlement along with a consultation on future policy. On Friday 20 December, Places for People submitted its response to the consultation setting out its preference and recommendations to Government on the setting of social rents:

The government was recently seeking guidance to their Future of Social Housing Rents proposal outlining how to set social housing rents, which Places for People responded to. The baseline rent calculation formula, supported by the housing sector, is to increase social rents by CPI (rate of inflation) + 1%, which, in theory, allows for more money to build new homes. However, a swathe of new incoming regulatory changes that increase our costs means we are left with less money than in previous years. Therefore, in our response, we have advocated for measures that go beyond this baseline to make sure housing associations like us have the funds to both maintain current homes to a high-quality standard and also develop new, much-needed affordable housing. We have considered both the timeframe of the settlement and the amount in the following ways: 

We favour a 10-year rent settlement because it would provide more financial stability, meaning our investors are confident we can deliver more homes and services.  

We favour removing the rent setting process from politics to ensure that the needs of the housing sector and our Customers are not jeopardised for political gain. This could include requiring the approval of Parliament to change the settlement, or having an independent committee set social rents. 

We propose a new rent formula, which includes rent convergence (i.e. making sure houses of similar tenure types are more equitably priced nationwide). Not only would this generate more income and resources for us, but it would put equitability at the forefront of our operations. 

We suggest tools to protect Customers from volatile or erratic inflation rates, including rent floors (i.e. minimums) and ceilings (i.e. caps) to balance risks to us and Customers.  

This rent settlement, if accepted, will go a long way in meeting Labour’s housebuilding targets and setting us up for success. However, this is still only one piece of the puzzle. Other support must come from a streamlined planning sector that removes red tape where possible, easier and more affordable access to borrowing, and complementary funding in the form of grants. Underpinning all of these factors is skill development for planners and builders; we see ourselves as a key partner in skills training through PfP Thrive. The government should be aiming to remove as many barriers and unintended effects as possible to best support the housing sector. 

That said, positive steps have been made already. Notably, reforms to the National Planning Policy Framework (NPPF) were published in December to address some barriers in the planning system to make more land available for development. The Affordable Homes Programme received a £1 billion top up to deliver affordable housing more quickly. Measures like these indicate the government is listening to the sector’s concerns and financial pressures, which bodes well for future collaboration.  

The current state of the government and economy means we are having to compete for scarce resources. Simultaneously, we are being asked by government to take on more responsibilities for our Customers. We are dedicated to striking the right balance between mitigating these risks and being compliant with legislation while not putting undue pressures on our Customers.