Roula Khalaf, Editor of the FT, chooses her favorite stories for the weekly newsletter. In order to boost the construction of affordable homes, UK Chancellor Rachel Reeves plans to increase social rents by more than inflation for the next 10 years. Reeves will introduce a formula in October’s Budget that will raise annual rents in England by the CPI measure of inflation, which is currently 2.2 percent, plus an additional 1 percent. This move aims to encourage the construction of more affordable homes by providing certainty over cash flows to housing associations and councils. In recent years, local authorities have almost stopped building homes, leaving housing associations to build most of the new social housing in the UK. However, setting higher rents could delight housing associations while potentially increasing living costs for millions of tenants and leading to a higher benefits bill for the government.
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