This is according to evidence submitted to MHCLG by the British Property Federation (BPF).

In its response to the Future Social Housing Rent Policy consultation (which closed on 23 December), the BPF argues that a proposed five-year settlement does not provide the conditions to support the Government’s ambition to deliver significantly more social housing as part of its 1.5 million new homes target.

Its submission highlights that annual social housing construction currently sits at 43,400, compared to the need for 145,000 new homes a year. Meanwhile, 1.29 million households are on housing waiting lists across the country.

To attract long-term institutional investment to boost supply, the BPF has called for a more ambitious ten-year rent settlement, with rent increases set at the Government’s proposed rate of CPI plus 1%.

This would offer investors greater income stability, support the valuation of existing social housing, and increase the impact of Government subsidies.

Aligned with greater private sector investment, this would support the delivery of more affordable homes.

The BPF’s submission also supports a mechanism of ‘rent convergence’, a policy which allows cheaper rents to rise more quickly to ensure alignment between rents on similar properties.

An independent analysis by the BPF found that at least £20bn of private capital is ready to be deployed into UK social housing if the policy environment is supportive.

Assuming investors use 50% debt financing and an average unit cost of £250,000, ten-year rent settlements could help unlock 240,000 additional units over five years.