Housing for All
targets the delivery of 18,000 new Cost Rental homes to 2030. A strong pipeline is in place and under continuous development by local authorities, by Approved Housing Bodies using the Cost Rental Equity Loan (CREL), and by the Land Development Agency.
The core principle of Cost Rental is that the rents cover the development, management, and maintenance costs of the homes, so that the long-term future of the homes is financially secure, but that rents are not subject to the pressures of the open market. Rents will increase only in line with general consumer inflation, remaining stable in real terms while continuing to cover ongoing costs. Cost Rental homes also come with the added advantage of long-term, secure tenancies regulated by the Affordable Housing Act 2021.
The nature of the Cost Rental model means that, unlike differential rents in social housing for low-income households, the rent is not set according to the income of the tenant. Cost Rental homes are advertised and made available at a certain rent level, which is needed to cover the costs of delivery and provision and so ensure the long-term future of the homes in the sector.
It is not intended for Cost Rental to overlap with, or replace existing social housing supports for low-income households. Cost Rental is designed to assist middle-income households who do not qualify for social housing supports such as the Housing Assistance Payment (HAP), but who are facing affordability pressures on the private rental market. Cost Rental is a major step forward in providing much-needed affordable rental options to households with incomes above the household limits set for social housing.
Therefore, Section 34 of the Affordable Housing Act 2021 provides that the Housing Assistance Payment (HAP) cannot be paid for a Cost Rental tenancy, at least initially, in line with this policy aim that rent payments cover costs without additional State supports. However, in recognition of the potential unforeseen changes in household circumstances that can occur during the lifetime of a tenancy, Section 34 removes this restriction on HAP for Cost Rental tenancies after the tenancy has lasted for more than six months. It is important to note that HAP is dependent upon someone first being assessed as eligible for social housing supports. Assessment for social housing supports is conducted by local authorities and qualification is dependent on both household income and assessed housing need.
