Friday, 06 May 2016

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

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