Rents in 2027-28 – Important information about rent setting for social housing in Wales

1.How are social rents set in Wales?

It has been announced there will be changes to social rents.

Social rents can increase by up to 4% from April 2027, following September's inflation rate of 3.5%. However, 4% is a limit, not a target. Landlords must consider affordability, value for money and their costs when setting rents. Individual rents may also be frozen, reduced or increased by up to an additional £2.55 per week, provided the overall income limit is not exceeded.

Watch our video explainer here for a breakdown: Social housing tenants in Wales: Did you know? - YouTube

Your actual rent increase will depend on your landlord's decision. If you're worried about affordability, speak to your landlord or contact Citizens Advice.

2. The Welsh Government has published its Social Housing Rent Standard Annual Self-Certification Monitoring Report 2025–2026, bringing together information submitted by local authorities and registered social landlords across Wales.

The report looks at how landlords are:

• applying rent increases
• setting service charges
• assessing affordability and involving tenants in rent-setting decisions.
• It also highlights the importance of balancing financial pressures and investment in housing with keeping rents affordable for tenants, including the need for meaningful tenant involvement in decisions that affect household finances.

Read the full monitoring report here: https://www.gov.wales/sites/default/files/publications/2026-10/welsh-government-social-housing-rent-standard-annual-self-certification-monitoring-annex-c.pdf

3. WELSH GOVERNMENT RENT AND SERVICE CHARGE STANDARD 2026-2036 FREQUENTLY ASKED QUESTIONS

Q. What is the Welsh Government Rent and Service Charge Standard (the Rent Standard)? The Rent Standard is a 10-year framework (2026–2036) with associated rules and guidance for social landlords in Wales on how to set rents and service charges, including the maximum rent increase permitted to individual tenants’ rents and to a social landlord’s housing stock overall. Its core aim is to balance affordability for tenants with the financial viability of landlords, ensuring rents remain fair, predictable, and sustainable.

Q. Who must comply with the Rent Standard? All social landlords registered in Wales (Local Housing Authorities and Registered Social Landlords) must comply. The Rent Standard applies to general needs and sheltered housing, regardless of funding source.

Q. What is the “rent envelope”? The rent envelope is the total rental income cap across a social landlord’s housing stock. Landlords must ensure their total rental income does not exceed the permitted annual increase (e.g., 4.0% for 2027–2028, based on CPI+0.5%). The stock number is the number of applicable units (*general needs and sheltered*) on the rent roll as at 31 March 2027. *General needs’ refers to self-contained units that are not reserved for specific client groups. ‘Sheltered accommodation’ refers to housing designed specifically for older people, commonly built in developments of about 20 to 40 self-contained flats or bungalows.*

 Q. What are the rules in the Rent Standard regarding rent increases? o CPI+1% is the maximum overall increase allowable in any one year where CPI in September falls between 0% and 3% but CPI+1% must not be regarded as an automatic uplift to be applied by social landlords.

• CPI+1% is the maximum overall increase allowable in any one year where CPI in September falls between 0% and 3% but CPI+1% must not be regarded as an automatic uplift to be applied by social landlords
• CPI+0.5% is the maximum overall increase allowable in any one year where CPI in September falls between 3% and 5% but CPI+0.5% must not be regarded as an automatic uplift to be applied by social landlords.
• Individual tenants’ rents can be reduced, frozen or rise by “up to an additional £2.55” per week on condition that the social landlord’s overall increase in rental income (the rent envelope) is no greater than CPI+1% or CPI+0.5%, as appropriate.
•  Should CPI in September exceed 5%, the Welsh Ministers will determine the appropriate uplift to be applied for that year.

Q. What are the rules in the Rent Standard for adjusting individual rents? Landlords can reduce, freeze, or increase individual tenants’ rents by up to an additional £2.55 per week, provided the overall rental income does not exceed the rent envelope (which is for the rent year 2027-2028). When completing the Annual Self-Certification Monitoring Return for 2027-2028, landlords will be required to confirm that an individual tenant’s rent did not increase by more than 4.0% + £2.55 per week.

Q. What is meant by rent envelope flexibility? Rent envelope flexibility refers to the ability for a social landlord to vary rent increases between individual properties or tenants, provided that the landlord's overall rental income increase remains within the permitted "rent envelope". This principle is described in rent-and-service-charge-standard-2026-2036 which states that individual rents may be reduced, frozen, or rise by different amounts, provided the landlord's overall increase in rental income does not exceed the rent envelope. In practice, this means that:

• The maximum uplift (for example, CPI+1% or CPI+0.5%, depending on inflation) applies to the landlord's overall rental income, not necessarily to every tenant's rent.
• Some tenants could receive a lower increase, no increase, or even a reduction.
• Other rents could increase by a higher amount where necessary.
• The landlord must ensure that, across the stock as a whole, the increase in rental income stays within the permitted limit.

A simple example:

• Permitted rent envelope: 3.5%
• Rent A increases by 1%
• Rent B increases by 2%
• Rent C increases by 5%

 This would be acceptable if the average increase across all properties remained at or below 3.5%

Q. What happens if a property becomes void and is re-let to a new tenant during the financial year? When a property becomes vacant and is re-let in the 2027-2028 financial year, landlords must make sure the new rent remains affordable and does not result in the overall rent envelope being exceeded. That is, the social landlord’s overall increase in rental income across the whole of their stock is no greater than the 4.0% rent envelope.

Q. What happens if a property becomes void and is re-let to a new tenant during 2027–28 financial year? Where a property becomes vacant and is re-let during 2027–28 financial year, the landlord can set the rent for the new tenancy, but must ensure that it remains affordable and that its overall rental income remains within the 4.0% rent envelope. This means that, across its social housing stock as a whole, the landlord’s total increase in rental income must not exceed the permitted rent envelope.

Q. What happens if a property becomes void and needs work before it can be re-let? If a property is void and is not on the rent roll at 31 March 2027 (for example) but is brought back on to the rent roll during the 2027-2028 financial year and re-let, it does not form part of the rent envelope calculation for 2027-2028. However, it would need to be included in the envelope calculation for the 2028-2029 financial year.

Q. What happens if a property becomes void and needs work before it can be re-let? Where a property becomes void and requires work before it can be re-let, it would normally remain on the rent roll. Only long-term strategic voids that have been removed from the rent roll are excluded from the rent envelope calculation. For example, if a long-term strategic void ( a property that is intentionally kept vacant for a longer period for strategic or operational reasons and has been removed from the landlord’s rent roll is different from a normal void between tenancies, including where routine works are required before the property can be re-let) is not on the rent roll at 31 March 2027, but is brought back onto the rent roll and re-let during 2027 28, it would not form part of the rent envelope calculation for 2027–28. It would, however, be included in the rent envelope calculation for 2028–29.

 Q. What happens if a property becomes void and needs work before it can be re-let? Typical void: A property that is temporarily empty between tenancies, including where routine works are needed before it can be re-let, would normally remain on the landlord’s rent roll and continue to be included in the rent envelope calculation. Long-term strategic void: A property intentionally kept vacant for a longer period for strategic or operational reasons, and removed from the landlord’s rent roll, is treated differently. If it is not on the rent roll at 31 March 2027, but is brought back onto the rent roll and re-let during 2027–28, it would be excluded from the rent envelope calculation for 2027–28, but included for 2028–29.

 Q. How are newly built, converted or acquired homes treated for rent envelope purposes? For rent-envelope purposes, the key consideration is whether the home formed part of the social landlord’s lettable housing stock at 31 March. Homes that were completed and available to let by 31 March must be included in the landlord’s stock and within the rent envelope for the following financial year. Homes that did not form part of the landlord’s lettable housing stock at 31 March and are let as social housing for the first time during the following financial year may be treated outside the rent envelope for that year. This can include newly built homes, office-to-residential conversions, new homes created through reconfiguration, and acquired or bought-back properties, provided they meet these conditions. Regardless of whether a home sits outside the rent envelope for that year, social landlords must ensure that the initial rent is affordable.

Q. How is affordability assessed? As part of the annual rent setting process, social landlords are required to carry out their own affordability assessments to assure themselves that rent and service charges are affordable for their tenants.

Q. How is the Welsh Government monitoring compliance with the Rent Standard? Compliance with the Rent Standard is mandatory and is monitored through the Annual Self-Certification Monitoring Return, which is completed by all social landlords. The monitoring return supports transparency, accountability and consistent application of the Standard across the sector. It enables the Welsh Government to assess compliance and identify any areas where further information or assurance may be required. To support transparency and continuous improvement, the Welsh Government will share sector-level findings and examples of good practice with social landlords. This helps landlords learn from one another, promotes consistency of approach, and supports the effective implementation of the Standard across the sector

Q. What happens if a landlord faces financial viability issues? Social landlords must advise the Welsh Government as soon as is reasonably practicable if there are concerns about the impact of the Rent Standard on their business plan, financial viability, or on their ability to meet their obligations to tenants and lenders. If social landlords consider that any financial viability issues are identified, they should raise the matter with: Local Authorities: [email protected] RSLs: [email protected]

Q. Will the Welsh Government be considering rent convergence? Alongside work to develop an affordability framework, exploratory research is underway into rent convergence, with a report expected in the Autumn. This work will help establish an objective evidence base to assess the potential benefits, risks and practical implications of any future approach, and will inform consideration of whether rent convergence would be appropriate in Wales. Following consideration of the report and ministerial steer, detailed engagement with the sector and other stakeholders will be undertaken before any future policy approach is considered.

Q. Where can I get further information or clarification? For further information or clarification, please contact the Social Rent Policy team at [email protected]