"The government has confirmed that rent convergence will be applicable for 10 years – the length of the new Rent Standard – which provides the very certainty that the sector wanted"
- Samantha Grix - Devonshires
The Ministry of Housing, Communities and Local Government has confirmed how social rent convergence will be implemented as part of the long-term rent policy for social housing in England.
Under the new approach, registered providers will be able to raise rents on Social Rent homes that are below the government’s formula, first by an additional £1 per week from 1 April 2027 over and above the Consumer Prices Index (CPI) plus 1% cap, and then by an additional £2 per week from 1 April 2028 until those rents align with the formula level. This mechanism will apply only where current rents are below formula rent.
The policy follows responses to the government’s consultation last summer on how rent convergence should operate. The long-term rent settlement agreed at the 2025 Spending Review permits registered providers to increase rent by CPI+1% annually through to 31 March 2036, providing greater certainty for planning and investment.
This staged rent convergence reflects the government’s view that gradual alignment will support social landlords’ financial capacity, enabling them to sustain investment in both existing homes and new affordable housing, while balancing the impact on households’ disposable income and public spending.
A ministerial statement to Parliament confirmed that registered providers will be able to implement the additional weekly uplift once rents remain below the formula level and that the convergence path will continue until parity is reached. The government said this strikes a fair balance between supporting investment and protecting tenants.
Local government bodies responding to the announcement have welcomed the direction on convergence but noted that delivering the changes will require careful attention to implementation and housing sector capacity.
The government also emphasised that, alongside convergence, the wider social housing package includes measures to boost affordable housing supply, strengthen housing standards, and clarify regulatory expectations for landlords.
Registered providers have flexibility to apply lower rent increases, including freezing or reducing rents where appropriate, and the government has encouraged providers to consider the balance of investment needs and tenant affordability as part of their planning.
Samantha Grix, partner at Devonshires, said, “After many months of waiting, we have finally received confirmation that rent convergence for social rent stock will be permissible for 10 years, but with staggered implementation.
“The impact £2 a week rather than £1 a week will have on the sector is significant, so the higher figure applying for a majority of the rent settlement will also be welcomed. Ultimately, this increased income will provide crucial funding to comply with both current and incoming regulatory requirements relating to the condition.
“The government has confirmed that rent convergence will be applicable for 10 years – the length of the new Rent Standard – which provides the very certainty that the sector wanted. This allows RPs to pin down their financial projections and plan their longer-term strategy. However, this is said with a word of caution because we have seen previous governments tear up rent policy (dare I say the words rent reduction?), but there is optimism in the sector that this will not happen, given the commitment to deliver 1.5 million new homes.
“Robust control mechanisms are also going to have to be lined up to make sure the right level of convergence is applied in each year, that it is applied only to relevant tenancies, and it is stopped when the re-let rent has been met. Given how complex rent regulation has been and currently is, this will certainly not simplify things.”
Jordan McCay, policy officer, British Property Federation, said, “The BPF welcomes this additional support for the affordable housing sector and the government’s recognition of the serious challenges facing the Section 106 market. Pressures on Registered Providers’ financial capacity, rising build and finance costs, and difficulties in agreeing viable contributions have led to a growing number of stalled and uncontracted affordable homes.
“While we support the government’s recognition of the importance of social rent convergence, delaying implementation until April 2027 and limiting increases to £1 will continue to constrain a sector already facing a £2 billion funding gap. This will restrict reinvestment in existing stock, hinder progress towards Decent Homes and decarbonisation targets, and risk further stalling inward investment.
“We urge the government to align convergence with the 10-year rent settlement and look forward to further detail on how the Section 106 measures will be implemented in practice to unblock stalled homes and restore confidence across the market.”
Emma Hardman, partner in the housing management team at Anthony Collins, said, “Yesterday’s announcement confirming the position regarding rent convergence, and the permitted increases, provide welcome certainty for Registered Providers (RPS) of social housing – many of whom have been waiting to press ‘print’ on their annual rent and service charge review letters ahead of April increases, following the delay in the announcement previously expected in the Budget."
“Some RPs with long-standing tenancies have rents that are below the current ‘Formula Rent’. The period of rent decreases during 2016 – 2020 exacerbated this issue. Combined with rising costs and increased regulatory and legislative requirements, some landlords have had to withdraw investment in new developments."
“The decision to set the level for rent convergence at up to £1 from 1 April 2027 and then up to £2 from 1 April 2028 over and above the annual CPI+1% limit for social rent, until ‘Formula Rent’ is achieved, is welcomed: the intention to re-introduce convergence was known, but the amount subject to the outcome of the Government consultation undertaken last year. However, there may be some disappointment that no convergence may be applied this year, with many affected providers having prepared for different outcomes in anticipation of the announcement."
“Some RPs were hoping for a higher level of rent convergence so they could achieve Formula Rent more quickly, with some vocal calls for up to £3, particularly within London. However, RPs understand that, as social housing providers, it is important to strike the right balance between ensuring affordability for tenants whilst allowing fair rent increases. The phased approach will also hopefully ensure a more affordable and transition approach for those tenants where convergence may be applied."
“It remains to be seen whether additional sums on top of CPI+1% will be enough of a rent increase to support affected RPs through these challenging times: it will be a few years' time before we really see the impact.”
