Clarification from CLG on supported housing rent reduction

All supported housing as currently set out in the rent standard guidance will be excepted from the rent reduction for a period of 1 year.

29 January 2016

Following Wednesday’s Ministerial announcement that supported housing would be excluded from the 1% rent cut for 2016/17, we've had lots of questions about the definition of supported housing. All the exceptions will be confirmed in regulations and we expect these to be available in the next few weeks, however in the meantime CLG has provided the following statement of clarification:

"Our intention is that this be a wide definition.  All supported housing as currently set out in the rent standard guidance will be excepted from the rent reduction for a period of 1 year and providers should use this as a guide as they set rents for 2016-17. The exact definition will be defined in regulations. For the purposes of clarity we intend that the exception will include though not necessarily be limited to:

  • domestic violence refuges and other specialist accommodation based support for domestic violence victims
  • hostels and other accommodation for the homeless
  • sheltered accommodation for older people
  • supported accommodation for young people
  • extra care housing,
  • accommodation for people with mental health or drug/alcohol problems,
  • accommodation for people with disabilities
  • accommodation for ex-offenders and people at risk of offending.

Ministers have confirmed that alms houses, cooperative housing associations and community land trusts will also benefit from the year long exception.

As we draft the regulations we will be reviewing the definition in the rent standard, together with other definitions to ensure that the regulations provide comprehensive coverage and are clear about what is included. For sheltered and extra care housing, we would look to refer to the definitions contained in the Housing our Ageing Population: Panel for Innovation report.

Increases in the level of rent for supported housing will be limited to CPI +1%. This is in addition to an exception for specialised supported housing, also covered in the rent standard guidance which will be excepted from the rent reductions completely and for the entire 4 year period.

During the course of the Bill, Ministers have announced that providers of supported housing would be able to  set rents for new and relet supported housing at 10% above the social rent rate (i.e. formula less the appropriate reduction). During the exception period the intention is that providers will be able to set new rents at 10% above the 2015/16 formula rate uprated by CPI+1%.  

We are of course aware that providers have raised concerns about bringing housing benefit for social tenants into line with housing benefit for people in private housing which will start to take effect from April 2018. We will put in place the appropriate protections for those in supported housing. As we work towards implementation, DWP and DCLG will be working closely together with the sector to make sure the right protections are in place."

While deferring the rent cut by a year is welcome as it means incomes will not be reduced by as much as feared, if the LHA cap is applied to supported housing this will have a much more significant and lasting impact which will not be mitigated by this deferral. We are urging Government to think again and announce now that the LHA cap does not apply to supported and sheltered housing and that they will work with the sector to develop a long term sustainable funding model for supported housing.

Please contact us if you have any further questions.