Thursday, 05 March 2015

Freud insists welfare reforms are cutting rents

Lord David Freud has insisted that rents are coming down as a result of the coalition’s welfare reforms.

The welfare reform minister told Inside Housing that there is ‘evidence’ of private rents falling.

‘We are beginning to see some signs,’ he said. ‘It very hard to pull out effects from the general economy, clearly its patchy. At any one time some areas are going up and some are not.’

Prime minister David Cameron in January said welfare reforms were falling as a result of welfare reforms. Number 10 later said private landlords were reducing rents in exchange for direct payment of local housing allowance. Inside Housing research showed this was only happening on a very small scale, and the most recent reports suggest rents are still rising.

Lord Freud said civil servants have spoken to a round 80 councils and said ‘quite a few’ are talking about using direct payment in return for lower rents.

He said a piece of work on local housing allowance changes being carried out by the University of Oxford, Sheffield Hallam University, Ipsos Mori and the Institute for Fiscal Studies will look at the issue of rent reductions. The work is due to be published in the week beginning 11 June.

Read Inside Housing’s interview with Lord Freud in full

Readers' comments (30)

  • Rick Campbell


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  • was trying to think of a more diplomatic way of putting but couldn't.

    Rick's right. He's a liar.

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  • Can he stop calling it evidence and actually cite where this 'evidence' is from? Shelter and other groups have already made valid citations to research showing the opposite is true?
    Spoken to 80 councils? In my dissertation if I said I spoke to 80 unamed and unreferenced professionals woudl that make my arguement any more valid? Think not!
    Does anyone know HOW the direct payment ACTUALLY reduces rent in the private sector?

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  • I strongly suspect Rick Campbell is in fact an intergalactic visitor who has been teleported from the pre-Enlightenment.

    Suspicion, prejudice, voodoo, ghosties ... all facts can be used to support the irrational rationale through which Campbell interprets the world.

    There's a great part for our armchair Satanist as a walk-on to bear witness at the Salem witch trial.

    Yup, talking in tongues, boils on his bum, made me feel queer all over ... and, of course, he was Conservative so QED.

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  • Mr Kinsey. Is it realy that difficult to work out?

    Take away state subsidy which has created an artificial market in the form of housing benefit. Demand is therefore reduced. By the same token, supply will increase.

    Prices are forced down. This is because producers will be forced to drop prices to a level which consumers can afford.

    A new lower equilibrium is established.

    This mechansim has been understood for the best part of 2000 years. Alternatively, you could adopt Mr Campbell's approach which is to yell "Liar" and sink back into your armchair in smug splendour at your wit.

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  • Eric Blair

    Prove it Mr Freud! Where is this 'evidence'? How much is 'quite a few'? There is nothing to support his view so Freud is resorting to hearsay, a feeling in his bones and flim-flam.

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  • Michael Read: except, it isn't true. Which would make let's see... a lie. as in liar.

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  • Rick Campbell

    I am not the only one whom posts to IH threads with biased opinions of some sort or other -- no doubt others will be demonised equally?

    After all, I wouldn't like to live in a state (e.g. Stalinist state) where to have an opinion other than that of 'my betters' would be punished by an attack (be it physical or otherwise) or condemnation. I think it wouldn't be a nice place to inhabit -- but I'm not sure I want to live in "the Land of the Free" either.

    If that creature (for want of a more useable 'c' word) were to be telling the truth then the various housing experts such as the respected RCIS and pundits -- and even the IH article "Tenant demand pushes PRS rents up" must be telling lies.

    I quite like Conservatives as it happens (two of my former great boozing pals were Conservative Councillors)-- it's this shower in power I don't have time for -- but of course, the blinkered may not recognise that I have similar disdain for the Opposition.

    A government that kicks the downtrodden and demonises sections of society certainly cultivates suspicion and their world is seen differently by those other than themselves as is the case with many topics raised on IH. Just as my world will be seen differently by others.

    I have many prejudices -- all born from personal experience.

    Just to let new readers know: I hold the view that there are posters whose contributions are designed to promote discussion whilst they may not be reflective of their real-life viewpoint.

    All too sadly, not everyone who posts on IH is as generous of spirit as myself and may be unwilling to extend such a spirit to anyone other than themselves.

    I take it then, Michael, that I have the honour of being the armchair Satanist and am being offered a walk-on part. I'm afraid that I have decline, as yet again I am confined to bed hardly able to walk -- a fact that is oft stated on IH but new readers would not be aware of that.

    Someone of a less charitable heart than me might, just might, view the allusion to a walk-on part being made to someone who has mobility problems (which have been the subject of discussion previously on IH threads) as cyber bullying.

    My view is that it was an off the cuff remark intended with no malice whatsoever and, indeed, designed to bring about a modicum of levity to brighten up a Friday afternoon as is often the way on a Friday.

    I would gladly accept the epithet 'armchair Satanist" except that unfortunately I have no religion and Satanism is a religion -- the same sort of things rules voodoo out for me. I recognise the link between 'demon' as in 'demonised' and 'Satanic' but thought that perhaps there might be a 'dark, satanic mills' sort of connotation.

    "Tinfoil hat wearer" or something catchier may be more tag for me though -- perhaps something to do with crystal ball perhaps?

    I don't recall saying that Lord Freud spoke in tongues but recall 'with forked tongue' or something similar to that (could have been 'snakesspeak' -- anyway, the inference is the same.

    I am not at all concerned over the state of Lord Freud's posterior but I would not wish any physical affliction or disablement upon him or his fellow-travellers in government (or in opposition, for that matter) nor am I bothered as to how someone might know of boils on Lord F's bottom -- indeed, it's a touch of information-overkill.

    I am unsure about the ‘made me feel queer all over’ phrase but perhaps it is best left alone or even in Lord F’s style best left for someone else to fend off.

    I had anticipated that my unusually succinct initial post to this thread would have been my total contribution to it but Michael’s contribution gave me much entertainment and I thought it might benefit from a longer contribution. It certainly took my mind off the morphine injection I'm due in a few minutes.

    On the other hand, I could have just laughed my socks off.

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  • The tories said that by cutting housing benefits they then
    expected landlords to reduce their rents , but they have
    also told local councils to push up their rents by around 8% pa !
    They also want these councils to have to pay off around
    £30 Billion of old debts that are attached to these
    housing departments,meaning that rents are likely to rise higher
    and higher in the future.

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  • Dear Rick:
    as much as I enjoy reading your posts, Michael Read has a point; you should read the protocols on social media, please do not call government ministers' civil servant etc liars; you should just say you do not believe them or what they say. That does not mean that you should not give an opinion rather than laugh your socks off just not be so blunt. read some tips from this:

    Lord David Freud may well be correct about rents on a certain type of housing, in a certain part of the country, on a certain moment of time, on certain type of rent from whatever evidence that supports what he says at that moment.

    He can be both wrong and right at the same time as I think it was shown by C4 facts check web site that certain rents went down due to seasonal adjustments, so he can say he is correct but the trend is always one way and that’s up. The benefit caps mean, from a point of view of paying some tenants, on a max benefit cap tariff, these will kick in, then their rent will have gone down in as much as the state contribution to that rent has gone down. As the tenant will have to make up the sort fall in the rent that the state will not pay over or move to cheaper accommodation, which is already happening in London.

    The point is all rents have gone up and always will, for the PRS and social housing in terms of overall trends, some rents can go down due to seasonal adjustment in the PRS but the underlying trend it will increase.

    either way Ric makes a valuable contribution to these posts and I look forward to reading everyone's opinion even Melvin's as we can all agree to disagree even if we agree on that.

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