Thousands of council tenants in South London will see their rent rise by nearly five percent from next year, as the local authority grapples with a significant financial shortfall.
Council Approves Rent Rise Amid Financial Pressure
Southwark Council has confirmed plans to increase rents for its social housing stock by 4.8 per cent, effective from April 2026. The cabinet approved the proposal during a meeting on January 6, following a report from senior councillors.
The council's Housing Revenue Account (HRA), which is a ring-fenced budget for managing council homes, continues to face what the authority describes as "significant financial challenges." Officials have pointed the finger at the previous Conservative government's interventions in rent policy, which they say have created a major resource gap.
Cabinet members Portia Mwangangye and Stephanie Cryan stated that the increase is vital to fund essential work. "Rents are vital to pay for this important work to our homes and estates," they said in a joint statement. They welcomed the government's new long-term rent settlement, arguing it will help undo past policies that left Southwark and other councils in a difficult position.
How the 4.8% Figure Was Calculated
The specific increase is not an arbitrary figure but stems directly from a new national formula. The government's 10-year social housing rent settlement allows councils and housing associations to raise rents each year based on the Consumer Price Index (CPI) plus an additional 1 per cent.
With the CPI recorded at 3.8 per cent in September 2025, the addition of 1 per cent results in the total 4.8 per cent hike. This formula will be used to determine annual increases moving forward.
The same percentage increase will apply to the council's shared ownership properties and its Sheltered and Flexi-care housing for older residents or those with care needs.
Broader Impact on Service and Hostel Charges
The rent rise is not the only cost adjustment for residents. Weekly tenant service charges, which cover estate cleaning, maintenance, lighting, and door entry systems, are also set to increase.
These charges will rise from £14.10 per week to £15.15 per week for the 2026-27 financial year.
Furthermore, changes are coming for residents of supported hostels, which provide housing for vulnerable adults. Rent and service charges for these facilities will also increase from April 2026. Historically combined, these two charges will now be separated to bring them in line with other HRA accommodation. The council insists this change is for greater clarity and will not negatively impact service users or the HRA's finances.
The council has emphasised that the additional revenue is crucial to address ongoing issues like damp and mould and to fulfil its ambition of being a good landlord by improving homes, estates, and repair services for all its tenants.
