Chancellor Rachel Reeves is reportedly planning to introduce a 10-year rent settlement for social landlords in the next Budget on 30 October.

According to the Financial Times, Reeves wants to increase annual rents in England by the Consumer Price Index (CPI) measure of inflation – which currently stands at 2.2% – plus an extra 1%, as part of the government’s wider plans to raise funds to build more affordable homes.

The plan is to reverse former chancellor George Osborne’s decision to abolish a 10-year settlement in 2015.

The news has been broadly welcomed by the industry.

Ian Fletcher, director of policy (real estate) at the British Property Federation, said: “A ten-year rent settlement in the social housing sector would be a good way of boosting the supply of affordable homes. It would encourage greater investment in the sector by providing the certainty and stability that investors seek in investing in the sector.

“For example, long-term investors, such as pension funds, who want to match their investment returns with their liabilities paying pensioners. It would also reduce risk in the sector and therefore allow it to raise capital at lower rates, in effect a form of subsidy. We are therefore encouraged to see the new Government is considering this.”

Fiona Fletcher-Smith, chair of the G15, commented: “This policy could significantly enhance the delivery of new affordable homes in London and across the UK. Although it is yet to be confirmed, it represents a crucial first step towards providing the stability and financial certainty that not-for-profit housing associations need.”

She added: “If the government commits to the reported 10-year plan for rent settlement, it could be transformative for our sector, but it must be part of a broader strategy to address the social housing crisis.”

Richard Petty, head of UK residential valuation at property consultancy JLL, added: “If this is true, it’s exactly what the social housing sector has been asking for. It will boost valuations. But we’ve been here before, so it will need to be absolutely immutable.”

He continued: “The trick will be to ensure that the revenue is channelled in the right direction into investment in new homes… If we are serious about improving the energy efficiency and quality of existing stock, as well as delivering new affordable homes, either something has to give or funding has to be put in place to do both.”