That rate was set in September 2021 when inflation was at 3.1 per cent but inflation has since surged to a 30-year high of 5.5 per cent.
As a result, the 4.1 per cent rise in April is set to be below inflation but comes at a time when the cost of living crisis means households will already be seeing their incomes squeezed.
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Not everyone is protected by the rent cap, according to Muna, who said SHAC has already heard cases where tenants are facing rises of up to 10 per cent – and five per cent of those surveyed said they are facing even steeper rises.
“When government ordered rent cuts under the 2016 Rent Directive, housing associations were still perfectly able to function and remain financially viable. Now is the time to reintroduce a rent cut,” said Muna. “Although there is a cap of 4.1 per cent on social rents, lots of tenants are not covered by the cap, for example those in shared ownership homes.”
The campaigners have launched a campaign called Cut the Rents and End Rip-off Service Charging demanding that social housing providers absorb rising costs at a time when households are vulnerable to financial shocks.
The Regulator of Social Housing’s Global Accounts report, released last month, showed private registered providers delivered “robust financial performance” despite the impact of the pandemic.
In the year up to March 2021 there was a 20 per cent decrease in investment in building social homes – down to £10.9bn – and the number of social homes completed fell by 9,000 to 40,000.
But in that time the operating surplus generated by providers grew from £4.7bn to £4.9bn off the back of the inflation-plus-one per cent rent rise in April 2020.
A Local Government Association spokesperson previously told The Big Issue: “Due to significant ongoing funding pressures, councils have had to make difficult decisions to balance increasing costs across a range of services including building repairs that could not take place during the pandemic, and deliver improvements to energy efficiency to make homes warmer and help reduce energy bills.”
A spokesperson for the G15 – a group of London’s largest housing associations – said: “The rents residents of not-for-profit housing associations pay are set and capped in line with government rules. In setting rent levels, we have sought to balance the need to deliver vital investment work in our homes, our commitment to build new affordable homes, and the increasing costs we are facing.
“We are committed to supporting our residents, and anyone struggling financially should contact their housing provider as soon as possible to discuss the range of support that is available.”
SHAC is still running the survey. If you’re living in rented social housing you can fill it out here.