London boroughs have called on the government to confirm its social rent convergence policy this month, arguing that it is essential to stabilise budgets and support new council housing in the capital.
The cross-party London Councils group has requested a minimum convergence rate of £3 per week from April 2026. Rent convergence, previously government policy between 2002 and 2015, aims to ensure that residents in comparable socially rented properties pay similar rents.
Analysis from London Councils suggests that a convergence rate of £3 per week is crucial for several reasons. First, it would increase resources for new council housing construction. Without this rate, boroughs estimate at least 7,000 fewer homes could be built over the next decade.
Second, it would help reduce homelessness and pressures on temporary accommodation. Expanded social housing provision could create net savings of at least £115 million over ten years due to lower temporary accommodation costs.
Third, boroughs currently face a gap between social housing income and costs, requiring cuts to housing budgets. Without additional revenue, they would need to reduce spending by £269 million over four years on repairs, management, and resident services to balance Housing Revenue Accounts.
Cllr Grace Williams, London Councils’ Executive Member for Housing and Regeneration, said: “Boroughs want to boost investment in council housing, but instead we face stark budget pressures and real-terms cuts. We hope 2026 will be the year we turn around the crisis in council housing finances, and rent convergence should be an integral part of that. If the government enable us to introduce a rent convergence rate of £3 per week from April, this will lay the financial foundations of a much better future for London council housing.”
She added: “Boroughs are determined to work with ministers to deliver on our shared ambitions for housing. This includes making sure social rent levels are fair for tenants, put budgets in a healthier position, and bring investment for the much-needed new social homes that will help reduce homelessness and boost economic growth. But without rent convergence at an adequate rate, we fear continuing budget shortfalls holding back delivery of the new council homes we all want to see.”
London local authorities currently own and manage approximately 390,000 social homes, housing over one in ten London households. Boroughs emphasise that their social housing budgets are in managed decline, limiting improvements to existing homes and new council housing projects. Rent convergence is highlighted as the top priority to strengthen social housing finances.
The government’s consultation on social rent convergence seeks views on how to implement the policy fairly. It proposes phasing in rent convergence over several years, using a standard formula rent based on property value, local earnings, and number of bedrooms. The aim is to make rents fairer, more predictable, and transparent across the social housing sector.
Consultation questions focus on the pace of convergence, which tenants it should apply to, annual increase limits, sequencing with other housing reforms, and support for tenants facing gradual rent rises. London boroughs maintain that introducing rent convergence alongside 2026-27 social rent levels is vital to prevent further financial pressures.
