The Welsh Government has announced it will impose a social housing rent cap of 6.5%.

It comes as inflation hit a 41-year high of 10.1% this week.

In a statement, Welsh housing minister Julie James said: “From April 2023, the maximum limit (cap) which social rents can charge will be 6.5% – an increase well below the rate of inflation. This is the maximum any landlord can charge across all of their properties.

“No landlord is required to charge the maximum and I know all landlords will carefully consider affordability and set rents as appropriate across their housing stock.

“Within the overall settlement landlords may freeze, lower or raise individual rents based on a number of local factors of which affordability is a key consideration. The rate is a maximum not a requirement or a target.

“We know that any increase in social rent may impact those social tenants who pay all or part of their own rent. These tenants, in particular, need to be protected from being placed into financial hardship through trying to cover the costs of keeping a roof over their heads.

“Our agreement with our social landlords will help do that – protecting and enhancing the provision of good quality housing and vital tenant support services.”

Stuart Ropke, Chief Executive of Community Housing Cymru, said: “As not for profit landlords, rental income is reinvested into new and existing homes and providing essential support services to tenants, which have become even more vital in supporting tenants through the cost of living crisis.

“Setting rent is one of the most important decisions that housing associations make and we don’t see permitted rent increases as a target to meet. Housing associations will now set rents locally by engaging with tenants and using affordability tools. They want tenants to feel safe and secure in their home and no one experiencing financial hardship need worry about losing their home, where they work with the housing association.

“We encourage tenants to talk to their landlord if they are worried about paying their rent.”