Thread by @AydinDikerdem

I'm seeing a lot of people get angry about this when they shouldn't be. Stability in the rent formula is good! Also CPI+1% is not new, it's already the formula, the issue is it kept changing. Here's a thread to explain what this all actually means 🧵

on.ft.com/3MyZebb

Firstly, social landlords, use their rents to maintain their stock and provide a good service - it's therefore very normal to have rents increase with inflation in order to do this (cost of maintenance, repairs etc.).

The additional 1% is there to help give financial wiggle room for emergencies and improvements. It also helps strengthen our housing revenue accounts to deliver new social housing - this is important and good. CPI+1% has also been the formula prior to Reeves.

For those concerned about tenants, the poorest tenants don't see a change in money in their pocket, because it's covered by housing benefit. In fact, George Osborne's whole intervention of cutting social rents by 1% for 4 years was to save central gov money on the benefit bill.

This was a cut by stealth to councils housing revenue accounts and caused chaos to our financial plans that had been based off of a steady CPI+1%. We had to maintain our stock with a deficit. These measures are being introduced to offer the stability that has sorely been lacking.

The Conservative governments intervention in CPI+1% has so far costs Wandsworth about £35million each and every year with a cumulative loss of £160million as of last year. Over a 30 year period that's money that would have delivered more than my entire 1000 home programme.

That's before we factor in the 7% cap that was introduced to protect social renters from a large jump when inflation was running in double digits after the mini budget. Government never gave us the difference and that fell on our budgets.

If you add all the changes and interventions up, the impact has taken just under £1billion out of the Wandsworth Housing Revenue Account over a 30 year period… £1billion less than what we signed up for and what the self financing agreement was based on. That's one borough.

Social landlords have a huge array of new funding pressures now compared to when self-financing was introduced - the retrofit/EPC-C bill is astronomical, and that's before we touch on fire safety, new regulatory costs, and maintaining an increasingly older stock.

Having a fair, stable and predictable 10 year rent settlement is long overdue. (But I can see why the headline spooked people).

Finally, an important point to raise is that when inflation is high, the social tenants most affected by this formula are those not in receipt of housing benefit but who are on a low income. Their pocket is hit directly and need greater protections and support.