Thursday, 05 March 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

Readers' comments (13)

  • Rick Campbell

    Not just the 'tin foil hat brigade' on here who think the man told porkies, then?

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  • Joe Halewood

    Lest we forget Cameron said that rents and HB had gone down

    HB has risen by £100 million every month on average since the election.

    So while the argument rumbles on whether rents have fallen the fact and clear unambiguous fact remains that HB cost has not fallen and has increased massively. As such Camerons PMQ statement was misleading without any doubt on HB.

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  • Joe Halewood

    Lest we forget Cameron said that rents and HB had gone down

    HB has risen by £100 million every month on average since the election.

    So while the argument rumbles on whether rents have fallen the fact and clear unambiguous fact remains that HB cost has not fallen and has increased massively. As such Camerons PMQ statement was misleading without any doubt on HB.

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  • Eric Blair

    Cameron clearly said that RENTS had fallen. Then, and this really is a joke, the press said that Downing Street had 'clarified' the situation by suggesting they had 'heard' of rents falling. Amazing. Imagine writing a school or college report and trying to say, 'It's true 'cos my mates said so.' But apparently, it's fine if you're the PM.

    The Coalition is trying to run the country - and form policy - through media rumours and chatter. Of course rents aren't falling. They might as well suggest that Hobbits exist and that the moon is made of cheese, 'Because we heard it's true.' -E Mr Cameron.

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  • F451

    Housing professionals know the Prime Minister lied
    Tenants know the Prime Minister lied
    Landlords know the Prime Minister lied
    Even those with most to gain from Tory extremism in housing policy admit the Prime Minister lied.

    It appears that only those in Parliament either do not know or do not care that the Prime Minister lied. As an example of how isloated MP's have become from the communities and lives that they are destroying. Reality is no longer important in this post-Blair age, just so long as the media headlines support the rhetoric and the polls remain OK.

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    All depends where you live, but given that London was always the main problem area, in terms of HB payouts, it isn't going well

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  • abner arrow

    F451 - We do not use lie terminology in this column, the appropriate word is being totally incompetent.

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  • Joe Halewood

    Rents fell in London in December, they do every December its a seasonal thing with letting agents wanting people in before xmas as one simple explanation.

    This has led to headlines that rents fall for first time in a year - I could write that headline for December 2012 now! Rents have still increased over a 12 month period in the PRS nationally and in London too.

    The PMs crony Philippa Roe issued an article last week that said they had managed to persuade some landlords ro reduce rents. Yes some rents will have fallen but we have 1.6m private rents claiming HB and it would take 16,000 rents to fall to say that just 1% of PSR rents had fallen. That hasnt happened - 160 may have happened but that is 0.01% and means that 99.99% havent fallen!!

    HB has risen by £1.6billion since Tory led coalition took office - £100m increase each and every month so HB hasnt reduce which Cameron said at PMQs last week as well as rents falling. This is the same coalition that said a month after taking office that they will reduce HB by "nearly £2bn" by the end of this parliament. Its already £3.5bn above that target, it will increase by a further £5.6bn by 2015 according to the governments own figures released in the draft impact assessment that came with the RtB consultation.

    The same government issued figures in June 2011 that reveal the DWP know that up to £6.7bn of HB is not claimed and a further £560m per year is underpaid by DWP.

    The same government that said (remember this Mr Shapps?) that the affordable rent model would cost no more in HB. Yet it will cost between £600m to £1.3bn per year more (for 170,000 AR and up to 200,000 new RTB sales)

    You still want to say HB has fallen Mr Cameron? You still want to hold to nearly £2bn HB reductions by 2015?

    Oops as Grant Shapps is fond of saying!!

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  • F451

    I don't remember Shapps saying Ooops when parts of his local hospital were closed following his press announcement to having 'Hospital Saved by Shapps'.

    Ironically he is complaining that the Trust issue too little detail with not enough time to respond before implementing the changes he claimed to have prevented.

    Perhaps if the hapless Minister spent less time announcing nothing and more time doing something - or even explaining his Brief to the Prime Minister - then Government would be better informed and policy better implemented.

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  • New labour allowed housing rents to go up by
    over 200% in their 13 years,and allowed hugh numbers of
    extra people to enter into the country ,thereby putting hugh
    upwards pressure on housing rents.They also allowed the
    collassal expansion of bank lending for residential and
    commercial property sales,which pushed up house
    prices by over 300%,and which excluded many first time
    buyers ,who now have to carry on renting.
    The tories are keeping these escalating high prices,
    but cutting all sorts of benefits,thereby creating a
    devastating gap between housing costs and peoples
    means of paying.
    Parliament has meanwhile suggested that local
    councils should offer underoccupiers 670,000
    1 bed homes.......which of course are not available.

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