Social landlords could see losses of £4.9bn in rental income over the next five years after the chancellor confirmed rents will be capped at 7% next year in his Autumn Statement.

Chancellor Jeremy Hunt has confirmed social housing rent increases will be capped under inflation at 7% in 2023/24.

The Government consulted on the proposed social rent cap earlier this year, suggesting either a 3%, 5% or 7% cap.

A government impact assessment published in August revealed that a 7% cap would reduce rental income by £4.9bn. Figures seen previously by The MJ revealed this cap would see London boroughs lose £223m over two years.

The Local Government Association (LGA) previously warned that any rent cap would not benefit the majority of council tenants directly because 60% receive housing benefit.

Instead, it argued the move would be a saving for the Department for Work and Pensions even though councils would have to cope with the impact of the lost income.

Moody's also warned the cap would put extra financial pressure on social landlords. Analyst for Moody's, Maylis Chapellier, said: 'The announced temporary ceiling on social housing rent increases at 7% next year is credit negative for housing associations and local authorities with social housing stock in England as it will constrain their revenue growth while they grapple with high inflationary pressures and the need to spend to address regulated standards on quality, safety and energy-efficiency.'

However, Mr Hunt said the cap would help protect households across the country from the rising cost of living.