Social landlords are raising their rents for benefit tenants above those charged by private landlords. The difference is a gap of 14%, says new data.
Produced by the organisers of the annual Resi conference, they say it has been extrapolated from the Government’s own figures and shows that contrary to widespread condemnation, private landlords who take tenants on Local Housing Allowance are not the ones pushing up the housing benefits bill.
Forecasts by the Treasury show that benefits paid to tenants of social landlords will rise by 9.4% over five years, compared with 7.9% for benefits paid to social tenants of private landlords.
Critics say that questions will be asked as to why the Department for Work and Pensions did not previously disclose these specific findings from the figures.
Some politicians, for example shadow work and pensions secretary Liam Byrne, have called for councils to be able force down private rents to reduce the welfare bill.
Byrne told the BBC: “A lot of people say to us why are we spending £24bn on housing benefit – a lot of that money is going to private landlords. Why don’t we give local councils the power to bring down the cost of rents, particularly in the private rented sector, and use some of those savings to actually build more social housing.”
It is due to be one of the issues covered at the Resi property conference in Newport, south Wales, next month.
The figures have been taken from Department of Work and Pensions forecasts.
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Comments
What a surprise?
You make something vastly complicated with laws. You get lots of council and government workers involved. You get Shelter to lend a hand. You get inspectors to inspect licences and perfectly qualified tradesmen who put their prices to pay for the aggravation - and so on.
You target people who are not the fastest when it comes to financial fraud and understanding complex law created by do gooders. This is just as well since they will be paying for all the above and it is a lot simpler if they do not understand that they must pay for the quagmire they have entered into.
Surely this will push up the LHA anyway as this is supposed to be based on rental costs across both the social housing and private rental sectors. If this trend continues then maybe the gap between the two will shrink and the LHA will be a truer reflection of the rent charged at the 30th percentile.
Very interesting.
I actually sold a property for someone on the shared ownership scheme a few months ago.
The rent bit of it had skyrocketed and the mortgage company that was recommended by the scheme was charging a ridiculous interest rate.
Their monthly outgoings on rent, mortgage and service charge was a good 25% higher than a flat in the non social housing block next door. AND the flats next door are better spec - nicer kitchens, two bathrooms, better flooring, etc.
In fact, it appeared that rather than helping our keyworkers, these flats are rapidly becoming a noose around their necks.
I would think that quite a few housing associations are looking at taking their portfolios to market rent; they see the rental market expanding and want to raise revenue to increase their stakehold.
This news, sadly, doesn't surprise at all. As ever, the snouts are in the trough.