Enterprise Performance Management
Funding Changes: What does it mean for Housing Associations and their Finance Teams
The recent announcement on changes to Social Housing funding has sent ripples across the sector. With an expanded £39bn Affordable Homes Programme and a proposal to allow rent increases of CPI +1% annually, Housing Associations now face a critical moment of financial recalibration.
What’s Changing?
This week, the Chancellor introduced a consultation on a new settlement that could reintroduce rent convergence—a policy that aims to align social housing rents more closely with market rates. The National Housing Federation (NHF) has welcomed the move and encouraged its members to provide evidence on how this shift could impact their operations.
Why It Matters
When rent convergence ended in 2015, the G15 group of London Housing Associations estimated a collective financial loss of £2bn. Reintroducing the policy could help standardise rent structures and reduce disparities between tenants in similar homes.
However, implementing this change is far from straightforward. Finance teams must revisit long-term forecasts and rework financial models – often built in complex spreadsheets – to reflect the new policy landscape. This is not simply a reforecasting exercise: changes to the income model can have a cascading effect on housing stock valuations, which are indexed to the income they generate. These valuation shifts, in turn, impact the balance sheet. What may appear to be a minor policy adjustment can send ripples through all business-critical financial models and reports.
The Role of Planning Tools
To manage this complexity, many Housing Associations are turning to Connected Planning software solutions. These tools allow finance teams to:
- Model multiple rent scenarios (e.g., CPI +1%, rent convergence)
- Integrate housing stock and tenant data
- Support strategic decision-making with accurate, real-time forecasts
The NHF has already called on its members to gather evidence and advocate for this policy change for Housing Associations across the UK. Tools like Anaplan make that much simpler to achieve.
Looking Ahead
Policy changes like this rarely come without warning. The current consultation period offers a valuable opportunity for stakeholders to shape the final policy.
Conclusion: A Call to Prepare
While rent convergence could enhance long-term financial sustainability for Housing Associations, it also presents a significant challenge for their Financial Planning and Analysis (FP&A) teams. Without the right tools, updating forecasts could become a major headache.
Is your FP&A team ready for the change? Are you using Connected Planning tools to stay ahead?
We’d love to hear your thoughts.
👉 How will your organisation respond to the proposed changes?
👉 What tools or strategies are you using to prepare?
Get in touch with our team
