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The ARCH annual report for 2015-16 is now available to view.


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Council house rent reductions: Estimate of national impact 23/07/2015

In preparing its response to the government's announcements in the Summer Budget that council house rents must be reduced by 1% per year over the next four years, Matthew Warburton,  ARCH Policy Adviser, has done some work to assess the impact nationally.

You may find this analysis useful in setting the context of the impact locally on your own councils:


Following the Budget announcement of the government's plans to reduce local authority and housing association rents by 1% a year for four years from 2016/17, legislation to achieve this has been included in the Welfare Reform and Work Bill, which had its Second Reading in the House of Commons this week. More detail is given in this briefing.


To raise awareness of the impact of the policy and inform Parliamentary debate, ARCH has made an estimate of the overall loss of rent income to councils produced by the changes:


We estimate that imposition of a 1% rent reduction will reduce aggregate local authority rent income by £153 million in 2016/17, £381 million in 2017/18, £649 million in 2018/19 and £936 billion in 2019/20, compared with the previous policy of raising rents by CPI + 1% each year.


By 2020, the cumulative loss of income will be £2.1 billion and rents will be 11.8% lower than was previously expected. Assuming that rent increases return to CPI+1% from 2020, there would be a further loss of income of over £30 billion over the remaining 22 years of the 30 year business plan.


More detail, including the assumptions underlying this estimate, is included in this briefing.

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