The current settlement, where rents increase by RPI plus 0.5% every year, is due to come to an end in 2015. Abi Davies, CIH assistant director of policy and practice, said: "If local authorities and housing associations are to have the confidence to plan investment in new development after 2015, then a new framework and settlement is crucial."
To kick-start debate CIH and L&Q have put together a report, We need to talk about rents, outlining potential objectives and options for rent policy post-2015.
The options, which draw on international experience, include maintaining the current dual-track system, allowing flexibility to providers to set individual rents within minimum and maximum thresholds, applying income-based rents and a redistributive rent system.
Mike Donaldson, group director of strategy and operations at L&Q, believes that achieving clarity on rents post-2015 is essential. He said: "We believe the three key criteria for any new system should be simplicity in applying the rules, affordability for tenants and viability for landlords."
CIH and L&Q are hoping the report will encourage debate, enabling the sector to make a strong case to government for a new long-term rent framework that responds to the right policy objectives and delivers positive outcomes for social landlords and their communities.
Abi Davies said: "It is not the purpose of this report to conclude on any options but to invite the Government and the industry to think about the future of rents and rent-setting, with a view to agreeing a rent framework that delivers for all."
Davies said that the review must consider the wider social housing backdrop: "Any review of rents cannot take place in isolation. It must also consider the options for future funding of new social and affordable housing, the relationship between rents and welfare policy, and the overall purpose of social housing. In determining future policy we need ministers to consider the balance and trade-off between affordability for households, landlords’ financial capacity and the demand on government finances."
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