Wednesday, 02 September 2015

Shapps defends claim that private rents are falling

The housing minister has insisted his claim that rents in the private rented sector are falling is correct after the issue was again raised in parliament.

Grant Shapps cited the latest English housing survey report as evidence that ‘rents in the private sector have reduced in real terms’.

The EHS figures show rents rose from an average of £156 a week in 2009/10 to £160 a week in 2010/11, net of service charges. Once inflation is taken into account this does work out as a small decrease in real terms.

However shadow housing minister Jack Dromey produced figures that show rents rose or stayed the same in 90 per cent of English local authorities. His figures were produced by the House of Commons library and are based on statistics from the Valuation Office Agency, part of HM Revenue and Customs.

Research body Full Fact has analysed the claims and concluded the politicians have both used very similar figures. ‘Either can be used to show a nominal terms increase in rents or a real terms decrease, and so both are correct within their own terms of reference,’ it said.

Inside Housing’s own research into rents found just 36 of 204 local authorities that responded to Freedom of Information Act requests had found any evidence of private sector rents falling as a result of changes to local housing allowance payments.

Our inquiries were prompted by claims made by prime minister David Cameron in January that private landlords were reducing rents in exchange for receiving LHA payments directly.

Housing minister Grant Shapps supported this position later in the month using figures from estate agency LSL Property Services. These showed a 0.8 per cent fall in rents compared with the previous month, although they were still up 4 per cent on the previous year.

LSL’s January figures showed a 0.1 per cent increase on December, and a 4.3 per cent annual rise.

Full Fact said the housing minister had ‘significantly misused’ the LSL data, which cannot be used to back up his claim ‘because the data is not seasonally-adjusted’.

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