Housing Association rents are governed by a formula that limits annualrnincreases to the retail price index plus 0.5%. With news reports widely indicating that the Treasury is predicting September's RPI at -3%, the sector is potentially facing a government-limited rent reduction of 2%, a decrease in annual income for the sector estimated by various bodies at £175m-260m. According to the National Housing Federation, this means that, until the economic situation improves, 4,000 fewer new affordable homes would be built every year.
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