Sunday, 21 December 2014

Research questions prime minister's rent claim

Research the prime minister claims shows rents are falling across the country actually shows they are increasing year on year.

Earlier this month, David Cameron said rent levels are coming down as a result of caps introduced in April 2011 to local housing allowance paid to private tenants. The claim was immediately questioned by the sector and Labour MPs.

In a parliamentary debate yesterday afternoon, housing minister Grant Shapps said he thought Mr Cameron was referring to recent analysis by LSL Property Services. Its report, which was published earlier this month, showed the average rent fell by 0.8 per cent in December compared with November, to £711 a month.

But the monthly fall came after 10 months of rises, and renting was still 4 per cent more expensive than the previous December.

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

Readers' comments (14)

  • Rick Campbell

    So, if the rents have gone up this month will he (Cameron) be saying that in the HoC?

    I doubt it.

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  • F451

    'Grant Shapps said he thought Mr Cameron was referring to recent analysis by LSL Property Services' - surely it is the job of Housing Minister to know, and to advise his Prime Minister so that his Prime Minister does not look as big a liar as he is himself.

    This clown hasn't even earned his pay, let alone his bonus!

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  • Eric Blair

    Perhaps the govt. will introduce a new Reformation of Reality Bill, to ensure that everything the PM says is actually true... even if it's not.

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  • no, rents will not fall outside London because the rent cap is too high.
    Landlords outside london are busy raising rents to meet the anticipated demand. Properties purchased to rent will also go up. I assume its intended to drive the benefit industry receipients out of the big cities.
    Loads of Jobs advertised down here but very few takers as they get double on benefits

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  • i wish i got double on benefits. my benefits give me 28 quid a week a to live on after rent. where do i have to go to double my money?

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  • F451

    You need to get to Tory Lie Land elahrairah.

    As Ivan mentions it is 'down here' it is probably a warm place.

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  • Gavin Rider

    Someone needs to table a formal question on this misleading statement by David Cameron, during PM question time.

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  • Give it a chance! The housing benefit cap has only come into effect on 1st January 2012 for existing tenants, which will be the majority of those affected by the housing benefit cuts.

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  • Gavin Rider

    OK, everyone, I have just had a response to my Freedom of Information request to the Department of Work and Pensions about this. Their response is as follows:

    "The government introduced caps to Local Housing Allowance rates on 1 April 2011, as part of wider reforms to control the spiraling costs of Housing Benefit which reached £21 billion in 2010/11 and, if left unreformed, would have reached £26 billion in 2014/15.

    To increase the downward pressure on rents we expect these changes to exert, we have temporarily introduced a new safeguard which will allow local authorities to make direct payments to landlords where it will help the tenant secure or retain a tenancy. In return for direct payments we would normally expect landlords to reduce or restrain the rent to around the level of the Local Housing Allowance rate that applies to the size of the property.

    To date, we have visited around 80 local authorities to monitor the implementation of these reforms. The majority have reported that they have used the new safeguard to help claimants negotiate down rents, and all plan to use it during 2012 as transitional protection runs out. In cases where we have heard of the safeguard being successfully used, rents have been reduced and the taxpayer has benefited."

    So, my interpretation of this is that by temporarily changing benefits payments to pay them directly to landlords, and by squeezing the landlords directly while doing this, rents have been reduced and the cost to the taxpayer has therefore been reduced.

    This has nothing to do with justifying caps on benefits at all, as far as I can see.

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  • James Rennie

    I believe the ceiling on the rent for cardboard boxes has remained unchanged. There are a few doorways still awailable around westminster I gather, and there is free food...why not scrap benefits altogether, that would save on more unnecessary redtape such as assessments and the like. Lots to be saved there Grant, look lively man...

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  • F451

    For a FOI answer Gavin it seems to lack clear data. For instance how much have rents reduced in the 80 LAs polled, or what is the total average decrease?

    Are you sure that they understood the question?

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  • Gavin Rider

    F451 - I think they understood the question perfectly well and gave a sufficiently vague answer to avoid it being too obvious that what Cameron said in the House was BS.

    I have responded to the person who gave me the response and said that it is evident from what they have told me that the reduction in rents spoken about has been achieved only as a result of direct renegotiation of those rents by local authorities with landlords who are now receiving housing benefits payments directly, not as a consequence of capping benefits or any other change to the benefits system.

    I think this proves conclusively that what David Cameron said:

    "What we have seen so far, as housing benefit has been reformed and reduced, is that rent levels have come down, so we have stopped ripping off the taxpayer”

    is deliberately misleading. His statement clearly conveys the impression that reducing benefits has resulted in rent levels (in general) reducing. That is certainly what virtually everyone hearing his statement took it to mean. Whether this was a deliberately confusing statement or not, it is clear that Members were misled by what he said, and he should clarify exactly what he did mean in the House, so that it is on record.

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  • F451

    So will you be directly confronting the Prime Minster over this Gavin, or demanding he is called to the House to explain?

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  • Rick Campbell

    "so we have stopped ripping off the taxpayer”

    Is the PM suggesting

    a) private landlords are ripping off the tax payer?

    or

    b) "we", as in the government, are ripping off the taxpayer?

    Either/or, neither or a combination of both?

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