The UK Government has now confirmed the Rent Standard 2026, published by the Regulator of Social Housing (RSH) on 2 February 2026. The new standard applies from 1 April 2026 and sets the framework for rent-setting across England for the next decade.
For housing co-operatives that are registered providers this is an important development. Below we summarise the key changes and practical implications.
A 10-Year Rent Settlement: Greater Certainty
The new standard reflects the government’s 10-year rent settlement, intended to give co-operative providers long-term financial stability and investment certainty.
From 1 April 2026, social landlords must comply with the requirements of both the Rent Standard and the updated Rent Policy Statement.
What this means for co-operatives:
Long-term predictability should support business planning, loan negotiations, asset management strategies, and development ambitions.
Annual Rent Increases: CPI + 1%
Under the new regime:
• Social and affordable rents may generally increase by CPI + 1% per year.
• CPI is measured as the 12-month change to the previous September.
For co-operatives charging social rent, this continues the familiar CPI+1% formula — but now within a confirmed longer-term framework.
Governance tip: Ensure your Committee understands:
• Which CPI measure applies.
• The September reference point.
• The impact on long-term affordability and member income.
Moving Toward “Formula Rent”
The Standard allows additional flexibility where rents are below “formula rent”:
• From April 2027, rents below formula rent may rise by CPI+1% plus £1 per week.
• From April 2028, this becomes CPI+1% plus £2 per week, until formula rent is reached.
Formula rent is calculated using a government-set method reflecting property value, size and local incomes.
For co-operatives:
If your rents are historically low compared to formula rent, you may have room to strengthen income gradually — but this must be balanced against member affordability and the Co-operative Principles.
Rent Caps and Flexibility Levels
The Standard maintains:
- A rent cap requirement — rents must not exceed the permitted cap.
- A “rent flexibility level” of:
- 105% of formula rent, or
- 110% for supported housing.
Committees should review how close their current rents are to caps and flexibility limits, particularly when modelling future increases.
Who the Standard Applies To
The Rent Standard 2026:
• Applies to low-cost rental accommodation in England .
• Does not apply to certain categories, including shared ownership, intermediate rent, student accommodation, care homes, temporary social housing, and some specialised supported housing.
Practical Actions for Co-operative Committees
Now is the time to:
✔ Review your rent-setting policy – Ensure it references CPI (September figure) and complies with CPI+1% limits.
✔ Update your financial forecasts – Model CPI+1% over 10 years and consider:
• Repairs backlogs
• Decarbonisation
• Loan covenants
• Planned development
✔ Communicate clearly with members – Co-operatives should give a transparent explanation of:
• Why increases are applied
• How they are calculated
• What the income funds
✔ Check compliance status
If you are a registered provider housing co-operative in England, compliance with the Rent Standard is mandatory from 1 April 2026.
Final Thoughts
The Rent Standard 2026 offers something the sector has long asked for: stability and clarity. For housing co-operatives, this is both an opportunity and a responsibility.
The opportunity: stronger financial planning and potentially sustainable growth.
The responsibility: balancing viability with affordability, while remaining true to Co-operative Values.
As always, good governance, transparent decision-making, and tenant-member engagement will be key.
To find out more above formula rent and rent convergence, watch our August member forum back here [login required].