Saturday, 18 April 2015

Landlord body refutes claim as Number 10 fails to provide evidence

Private landlords dismiss Cameron rent claim

The leading trade body representing 1.2 million private landlords in the UK has dismissed David Cameron’s claim that rents are falling in the sector as a result of the coalition government’s welfare reforms.

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The prime minister told parliament on Wednesday last week that rent levels had dropped as a result of caps introduced in April 2011 to local housing allowance paid to private tenants. This is one aim of - and justification for - the coalition’s benefit reforms.

The claim has been disputed by housing sector professionals, including the Chartered Institute of Housing and this week by the National Landlords Association, the largest trade body for private landlords in the UK.

And in a snap survey by Inside Housing, 10 out of 11 councils contacted said they had seen little or no reductions in rent by private landlords as a result of them receiving direct payment of LHA.

A spokesperson for Maldon Council, in Essex, which has paid LHA direct to 129 landlords in 2011/12, said: ‘I do not believe that we have had any cases where the landlord has reduced the rent in exchange for payments of LHA direct.’

Sedgmoor Council in Somerset, which currently administers 2,769 LHA claims, said there had been ‘no more than 10’ cases where landlords had agreed rent deductions.

A Downing Street spokesperson said Number 10 is ‘hearing of cases’ where private landlords are agreeing to lower rents in return for direct payment of LHA. It has not provided evidence to back up the claim, promising data later in the year.

Chris Norris, policy manager at the National Landlords Association, said: ‘We are not aware of any evidence that landlords are reducing their rents in return for direct payment of LHA on any significant scale.’

Instead he said the association’s research showed that 77 per cent of landlords who have tenants in receipt of LHA are being forced to consider reducing their involvement with tenants on housing benefit ‘as they cannot absorb the effects of these cuts’.

LHA has been capped at between £250 and £400 a week for new tenants since last April, while LHA rates are now calculated using the bottom 30 per cent of rents rather than the mean. The changes are now being phased in for current claimants.

Steve Douglas, partner at consultancy Altair, said: ‘I’d be very surprised if rents are falling because, particularly in London and the south east, demand continues to outstrip supply.’

The CIH also believes Mr Cameron’s statement is incorrect. The institute used National Valuation Office Agency data to show that 86 per cent of baseline LHA rates in the UK, which are calculated using market rents, have either stayed the same or increased since March 2011.

Sam Lister, policy and practice officer at the CIH, said: ‘LHA rates follow wider demand in the market.’

Shadow housing minister Jack Dromey has written to the prime minister asking him to justify his claim in parliament or correct it. At the time of going to press Mr Dromey had yet to receive a response. It is understood that Mr Dromey is likely to raise the matter in parliament if he does not receive a response.

He said: ‘David Cameron has got it wrong again and has shown that he is completely out of touch with the pressures on hard-working families across Britain by claiming that rents are falling across the country, when the evidence shows that they are rising.’

The Department for Work and Pensions declined to comment.

Inside Housing’s What’s the Benefit? campaign calls for more equitable welfare reform.

House of Lords: key amendments to the Welfare Reform Bill to be debated on Monday

  • To exclude child benefit from the universal credit cap of £26,000 a year
  • To introduce a 26-week grace period once a claimant’s benefits exceed the cap
  • To exclude claimants entitled to carer’s allowance
  • To exclude people in temporary accommodation

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