Limiting rent rises makes sense. But ministers must fill the holes in social housing budgets

R ent rises for social housing tenants in England are to be capped for either one year or two, following a consultation. In Scotland, Nicola Sturgeon has announced plans for a rent freeze for private as well as social tenants, and a ban on evictions over the winter. With plans for longer-term rent controls already promised by the Scottish government, as part of the SNP’s agreement with the Scottish Greens, these new measures are – like the Conservative plan for England – a response to an escalating cost of living and poverty crisis. That Scottish ministers are prepared to go so much further ought to worry Liz Truss, and prompt her to do more. The UK’s housing market is broken, and private renters as well as social ones need help.

But councils and housing associations, too, are in a difficult situation. To hold rent rises down below the rate of inflation, without compensating social landlords for lost income, is not tenable. Comparable steps would be making school meals free without giving schools the money to pay for them, or abolishing prescription charges without funding the NHS to pay for medicines. Housing associations and local authorities need income in order to manage and repair homes and build new ones. If the government is to reduce their incomes, it must fill the resulting hole in their finances. The need for energy-efficiency measures to keep bills down and curb emissions, and the shortage of properties for social rent, make the need for investment all the more pressing.

The Treasury stands to gain from any cap on social rent rises. Because most social housing tenants rely on benefits to pay rent, ministers are effectively holding down their own bills. (Though with the cap in England to be set between 3% and 7%, rents will still rise, making it harder for those who do pay it to manage.) Social housing providers do not command public sympathy in the same way as schools or hospitals. The incentives for politicians to support them are fewer. But subsidised housing is an essential public service and must be recognised as such. A rent cap ought to be viewed as part of a policy, not a whole one.

As well as ensuring that social housing providers do not lose out as a result of short-term rent controls, the new housing secretary, Simon Clarke, must address problems in the private sector. Ministers promised years ago to end no-fault evictions, but still haven’t. In addition, they should support councils that wish to undertake compulsory landlord registration – already implemented in Scotland. Buyback schemes, whereby social housing providers are funded to purchase properties that used to be council homes, should also be expanded. The current situation, in which billions of pounds of housing benefit is funding buy-to-let mortgages, helps landlords and no one else.

But the priority is to ensure that low-income tenants are protected from price rises that threaten to make their lives impossible. If ministers are serious about reaching the poorest households, they could show this by scrapping the benefit cap. Multiple studies have shown that the larger families affected by this policy, and the two-child limit, are disproportionately poor – with all the hardship that entails. Social rents should be capped for two years, as the price of energy will be. But this is just the first of many housing reforms that are needed.