Rent Convergence: What It Means, Why It Matters, and What Providers Need to Prepare For
As the housing sector awaits the government’s final decision on rent policy from April 2026, the proposed reintroduction of Rent Convergence for social rent has become a hot topic among Registered Providers (RPs). For many, this marks a potential return to familiar territory — but also a complex landscape of financial, operational and tenant-facing considerations.
To help providers prepare for rent convergence, DTP and Mobysoft partnered to deliver a webinar about Rent Convergence which was highly attended with almost 200 participants. This high level of engagement reflects the sector’s appetite for clarity and guidance. The webinar brought valuable expertise to the discussion, sharing practical advice on modelling rent convergence, ensuring governance assurance and communicating changes effectively with boards and tenants.
Understanding Rent Convergence
Rent Convergence refers to the process of alignment of social housing rents that are below the maximum social rent maximum ‘formula rent’ ceiling, gradually bringing them up to the maximum formula rent ceiling — which is a standardised calculation based on property values, local earnings and property size and is prescribed by the Regulator of Social Housing’s (RSH) Rent Standard. Between 2002 and 2015, convergence was a cornerstone of rent policy, but not all organisations achieved full alignment before it was paused.
The Government confirmed earlier in 2025 its intention to reintroduce Rent Convergence and issued a consultation to the sector on how this should be implemented. The proposals suggest that rents are permitted to increase by CPI +1% plus an additional £1 or £2 per week until the maximum formula rent ceiling is reached (without additional rent flexibility). The ambition is to deliver consistency, stability and financial headroom for providers over a new 10-year rent settlement period and support the delivery of the Government’s targets for new social housing homes. The outcome of consultation is set to be announced by the Government as part of the Autumn Statement in November 2025.
Why It’s Back on the Table
Reintroducing Rent Convergence is seen as a mechanism to support the strengthening of RP’s’ long-term financial resilience at a time of rising costs and competing investment pressures — which come from a variety of sources including decarbonisation and building safety, meeting the new proposed Decent Homes Standardand increased legal and regulatory requirements relating to improving the quality and safety of homes for tenants A predictable rent framework offers greater certainty for lenders and investors, while supporting business planning and investment confidence.
However, the sector remains cautious. As highlighted in modelling from the Chartered Institute of Housing, National Housing Federation and Savills, even an additional £2–£3 per week may not fully bridge the funding gap for all the challenges providers face and there have been calls during the consultation response for consideration of higher permitted increases.
The Government and RPs are also quite rightly concerned about the impacts of affordability for tenants at a time when the cost of living crisis is still being felt by many In September 2025, the Joseph Rowntree Foundation issued a briefing which predicted that ‘incomes are expected to fall over this parliament, meaning that on latest projections Labour risks having the worse living standards performance of any parliament on record’.
Key Considerations for Providers
Implementing Rent Convergence will require far more than financial modelling. It will demand strategic, operational and communication planning across multiple areas.
1. Financial Modelling and Assurance
Boards need robust assurance on current rent levels before considering convergence. Are existing rents already at or above formula rent? What external assurance do we have to confirm this? How far is each property from the ceiling? Accurate data is essential — many systems still contain legacy or inconsistent rent records that could distort modelling outcomes.
Providers should test the net economic impact — balancing additional income against potential rises in arrears and bad debt, particularly for tenants who are “just managing” and not fully covered by housing benefit or Universal Credit.
2. Policy and Systems Readiness
Rent setting policies and systems will need updating to reflect Rent Convergence rules, especially where rents are currently automated through housing management systems. Without adjustments, automation could lead to compliance risks or inconsistent outcomes between properties.
Regular audits, internal and external, will help identify gaps, ensure compliance and strengthen board assurance.
3. Tenant Impact and Engagement
Rent Convergence may be beneficial for long-term investment, but as outlined above, it has direct implications for tenants’ affordability. A CPI+1% increase plus an additional £2 could mean weekly rises of £10–£12 for some households. Providers should plan impact assessments and tenant segmentation to identify those most at risk of financial strain.
Proactive engagement will be key: early, transparent communication; plain-language guides; and multiple feedback channels — both digital and face-to-face. Boards will need clear evidence of how tenant voices are being heard and reflected in decision-making, as required under the new RSH consumer standards.
4. Operational Pressures
Higher rents can lead to increased expectations around service quality, repairs and support. Providers may face rising workloads, complaints and void pressures, alongside a need for enhanced financial inclusion and tenancy sustainment services.
Some are considering internal hardship funds or expanded partnerships with third-party support agencies to help tenants manage the transition.
5. Data and Technology
Data will be central to managing rent convergence effectively – data is the new oil – but not everyone is equipped to drill for it. Providers must ensure they have the systems and analytics capability to understand tenant vulnerabilities, predict arrears risk, and deploy resources intelligently.
Automation and digital self-service tools can also ease workload pressures, freeing frontline teams to focus on tenants who need the most support.
Risks and Balancing Acts
Rent Convergence offers an opportunity to strengthen income streams, but it introduces new financial, reputational and compliance risks. Providers will need to stress-test business plans against scenarios such as higher arrears, slower collections or potential supplier price inflation.
There’s also a risk that higher rents could reduce tenant satisfaction if service expectations rise faster than delivery capacity. A balanced, transparent approach, backed by sound governance, will be vital.
Preparing for What Comes Next
Until the government publishes the final policy, likely in the November 2025 Autumn Statement, uncertainty remains around the exact parameters of Rent Convergence
Providers should be prepared to:
- Audit current rent setting, data and systems
- Review and update rent policies
- Engage boards and tenants early
- Model financial and affordability scenarios
- Strengthen assurance frameworks
Rent Convergence may not be a silver bullet, but it could provide a foundation for a more stable financial future — if providers plan carefully, engage transparently, and build the right evidence base now.
How can Mobysoft’s RentSense software help?
- RentSense® is the most mature, proven, and impactful rent analytic software in the UK.
- Our four key pillars are to prevent, prioritise, automate and analyse; for the purpose of significantly improving cash collection, tenancy sustainability, and tenant outcomes.
- Our performance is independently validated by the sectors leading benchmarking organisation .
What other external support can DTP offer?
- Undertaking audits of existing rent setting – to provide assurance to boards in relation to meeting the requirements of the Rent Standard and in preparing for the re-introduction of Rent Convergence.
- Undertaking or validating financial modelling around rents – providing robust assurance for boards.
- Provision of training for colleagues and boards – helping to understand the requirements of the Rent Standard and Rent Convergence and how to provide effective assurance.
How do I find out more?
Preparing for Rent Convergence will require careful planning, robust data, and strong governance — but you don’t have to do it alone.
Whether you’re looking to strengthen arrears performance and tenant outcomes or need expert support on rent policy audits, financial modelling, or board training, we’re here to help.
To find out more about how Mobysoft or DTP can help your organisation as you navigate the challenges of Rent Convergence, simply get in touch via this form and we’ll do the rest.
Mobysoft AI-powered PropertySense® applications RentSense® and RepairSense® help landlords improve their income-collection processes and the productivity, quality, and sustainability of their repairs service for the benefit of all involved.
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