Thursday, 31 July 2014

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’.

Readers' comments (7)

  • This is what makes me despondent about party politics. We are still in the process of bringing to book many journalists because there has been a culture of unethical behaviour which has destroyed people’s lives.

    The same thing happens in politics but has got far worse. there has been little or no attempt by politicians to back up anything they say or to follow democratic processes. What has then happened is, amongst other things, people with disabilities are now being threatened and abused in public because politicians have demonised the majority who are on benefits and there appears to be nothing we can do to stop them doing this.

    Similarly, there is no requirement for politicians to engage with real evidence or back up anything they say which makes it easy for them to control the debate through lies.

    This culture within politics is probably far worse in terms of impact on our society than the corruption within the police and something has to be done to change this as it is seriously undermines any democracy we have in this country.

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  • Eric Blair

    Anyone renting in the private sector will know immediately that Mr Shapps' statement is utter nonsense. It's possible to find low rent properties if you look around, but hardly likely that they are viable as long term homes. I think the vapourings of people like Shapps are best ignored - or at best taken with a huge pinch of salt.

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  • Joe Halewood

    Latest HB stats out today and I've blogged about them as usual. A sample with regard to Shapps assertions that rents have fallen:

    *********************

    Data reveals:
    1.Claimant count up from 4,935,920 to 4.952,260 a rise of 16,340
    2.Of that 16,340, 76 per cent is from private sector claimants (12,360)
    3.This is consistent as since May 2010 200,730 new HB claimants of which 144,820 (72%) are from the private rented sector
    4.An increase of 12,650 working tenants claiming HB is recorded – so 77.5% of new claimants were working
    5.Overall HB bill now stands at £22.458bn up £56.1m from November figure of £22.402bn

    Comments

    I note today Grant Shapps is again claiming rents have come down. As usual the official statistical facts don’t support that view. Despite the average overall payment per person having reduced for three months in a row from £87.03 to £86.91 the last 12 months has seen a rise in HB payments of 2.8%.

    This week has also seen a report in the Birmingham Post (in reality a placed story from the National Landlords Association (NLA) stating that 574 private sector rents have been reduced in Birmingham. Superficially impressive yet as tab 3 of the official statistics reveal Birmingham has 34,590 HB claimants in the private sector and so this means 1.66% of private rents in receipt of HB have fallen which means 98.34% have not fallen. So much for Shapps claims that private sector landlords are reducing rents because of the HB caps.

    Shapps HB targets from June 2010 were to reduce the HB bill by £2bn from its May 2010 figure of £20.8bn – a target of £18.8bn by 2015. The current bill of £22.458 bn is therefore £4.7bn or 25% above target.

    ************* (http://wp.me/p1vuvL-au)**************

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  • Melvin Bone

    'Either can be used to show a nominal terms increase in rents or a real terms decrease'

    Don't you just love statistics. Everbody is happy if they can prove they are both correct.

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  • Joe Halewood

    Melvin yes I do like statistsics, but I also like very contrary guidance from CLG and from DWP on the same issue as in my post today (http://wp.me/p1vuvL-aB), part of which reads:

    "Many if not all believe the Shared Accommodation Rate (SAR) only applies to private tenants. Yet I maintain it will apply to social tenants too from April 2013. Heres why:

    If you read the impact assessment for the under-occupation changes produced by DWP then you will see: (http://www.dwp.gov.uk/docs/eia-social-sector-housing-under-occupation-wr2011.pdf)

    “From 1 April 2013 it is intended to introduce size criteria for new and existing working-age Housing Benefit claimants living in the social rented sector. The size criteria will replicate the size criteria that apply to Housing Benefit claimants in the private rented sector and whose claims are assessed using the local housing allowance rules”

    As such SAR appears part of the underoccupation changes which will see 25 — 34 year olds be treated in terms of HB eligibility the same as those in the private rented sector. This means that a single person in a 1 bed council flat will be treated the same as a single person in a 1 bed private rented flat and subjected to the SAR but from April 2013 whereas the SAR change for private tenants was introduced in January 2012.

    The above quote from DWP is categorical and unambiguous – that social tenants will be treated to the same size criteria as private tenants on LHA from April 2013. This must include SAR.

    Is this a case of SAR being introduced by the backdoor and the sector (and Shapps) missed this just as with the LHA freeze?

    ***********************

    Interesting? Huge implications if true! Maybe Shapps can comment on here whether its true or not

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  • Joe Halewood

    PS - if its true then serious consequences for entire sector. If not then (a) DWP has issued inept guidance, and (b) it discriminates against private renters on basis of age and size , which is (c) the exact opposite of the coalition intention

    Perhaps explains why Shapps is in hiding today and not answering?

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  • Progressive Solutions Required

    Shapps is such a lying Minister, he cheapens the term 'human'.

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