Rents may fall for council tenants - scuppering the Governments council house building targets

Housing associations may see a fall of £260 million next year if the Government carries through its policy to link social housing rent to inflation.
With the retail prices index expected to fall below minus 2 per cent in September, the month when rent is set for the next year, could cause a cut in rental payments.

Ruth Davison, the National Housing Federation campaign director, said that the impact of a 2 per cent reduction would cut the number of homes that could be built next year by 4,000 at a time when nearly 5 million people were waiting for council homes. “This is bad economics and bad politics,” she said. “We desperately need new homes. And as the public finances deteriorate we will need more private borrowing to ensure we can continue to build these new homes,” she added.
A shortage of council homes could help to retain levels of demand for property in the private rental sector which could be seen as positive news for private landlords.

Read full article in the Times