It has been reported that chancellor Rachel Reeves intends to introduce a 10-year formula in October’s budget that will increase annual rents in England by the CPI measure of inflation plus an additional 1%.

This move is designed to encourage more affordable homes to be built by providing better certainty of cashflow to housing associations and councils.

Commenting on the reports, Ian Fletcher, director of policy (real estate) at the BPF, described this as a good way of boosting affordable home supply.

“It would encourage greater investment in the sector by providing the certainty and stability that investors seek in investing in the sector,” added Ian.

“For example, long-term investors, such as pension funds, who want to match their investment returns with their liabilities paying pensioners.

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“It would also reduce risk in the sector and therefore allow it to raise capital at lower rates, in effect a form of subsidy. We are therefore encouraged to see the new government is considering this.”

The Ministry of Housing, Communities and Local Government declined to comment on these reported plans. A spokesperson from the ministry did add: "Work is ongoing to fix the foundations of our housing and planning system and we will set out our plans at the next fiscal event.”

The government, which made the delivery of 1.5 million homes a key part of its election manifesto, has already put housing and development at the forefront of its political agenda.

In July, deputy prime minister Angela Rayner — who is also housing secretary — laid out plans to encourage development through the reform of planning frameworks.

A boost to social and affordable housing featured in this speech, with the government planning to introduce flexibilities in the current Affordable Homes Programme with Homes England, and bring forward details of future government investment at the spending review.