Housing Association rents INCREASE despite Tories imposed 1% rent cut

Goebbels even Donald Trump would be proud of the delusional propaganda that emanates from David Orr on behalf of housing associations.  As the title of this blog suggests – and as usual the pesky FACTS prove  – official data released today shows that Housing Associations have actually increased their rents by 1.54% since George Osborne announced an imposed 1% cut to social housing rents each year in 2015 and for 4 years beginning in April 2016.

By contrast council rents have fallen but only by 0.3% being £82.38 in May 2015 then £82.84 in May 2016 and falling to £82.11 per week in May 2017.

The official data comes in the form of the DWP Housing Benefit figures which show the average weekly payment of housing benefit to housing associations was £92.84 per week in 2015 which then INCREASED in the first year of the imposed cut to £93.96 per week and in May 2017 INCREASED again to now be £94.27 per week

When the 1% imposed rent cut per year was announced by George Osborne it was met with the usual doom and gloom by David Orr at the National Housing Federation – as you would expect – but ALSO with housing association upon housing association getting rid of 15% to 25% of housing staff as I reported at the time.

Yet it turns out that all of those housing staff that were got rid off using the highly convenient excuse of the 1% imposed rent cut now sees INCREASED rent levels not reduced ones – and yet again the social tenant is being screwed both ways in increased rents and less service due to 15% – 25% less staff!

Let’s look again at the hyperbole that is now proven to be propagandist delusion when the 1% rent cuts were announced and illustrated by this Guardian article though I could have used hundreds of similar articles since in the Guardian, Independent, Inside Housing and 1500+ English housing association PR guff …

1% fibbing housing associations

As you can see in the Guardian Housing Network article shortly after the Osborne announcement the doom and gloom was there – and that same doom and gloom and perpetuation of the reduction in rent levels by the housing associations has continued to this day … YET Housing Associations rents have increased!!

And of course George Osborne got it wrong as usual when he stated:

 “We are also going to end the ratchet of ever higher housing benefit chasing up ever higher rents in the social housing sector. 

This will be a welcome cut in rent for those tenants who pay it and I’m confident that housing associations and other landlords in the social sector will be able to play their part and deliver the efficiency savings needed.”

But there was no cut George as your former colleagues failed to check the devious and deceitful Housing Associations who have INCREASED overall rents not reduced them and the alleged saving to the Housing Benefit bill that you said would happen has seen precisely the opposite as the average HB paid to housing associations has INCREASED!

Let’s look at the rest of the doom and gloom and errant predictions in that same Guardian article:

First there is David Orr of the NHF:

Housing associations, however, estimate the lost income will prevent at least 27,000 new homes being built. National Housing Federation chief executive David Orr said: “At the very least, 27,000 new homes will not now be built, though that figure could be much higher. The right to buy for housing association tenants further compounds this.”

Yep he was wrong! Then we see the governments own auditors at the OBR:

The Office for Budget Responsibility forecasts that the policy could result in 14,000 fewer affordable homes being built.

‘Then this:

Sue Harvey, a director at consultancy Campbell Tickell, estimated the reduction would cause social landlords’ expected rental income to fall by 15%.

Oh dear – and we see housing association upon housing association recording record surpluses ever since 2016 and of course as they are getting MORE in rents and MORE in Housing Benefit they have increased rental income not seen it fall!!

And just to clarify here the INCREASED average housing association rents are reflected in the HB data AND there are more HA properties since 2015 so the rent roll has increased significantly and not fallen by this ludicrous 15% prediction.

Then we have the good old CIH getting this wrong:

Charted Institute of Housing chief executive Terrie Alafat said: “We understand the government’s desire to manage the cost of the housing benefit bill – but undermining their income by cutting social housing rents by 1% a year over the next four years is going to make it much tougher to build new homes at a time when we desperately need to do so.”

Ever since this 1% imposed rent cut was announced over two years ago in July 2015 we have had EVERYONE assuming that an actual rent cut has taken place. It has taken place for council tenants as the data shows but rent levels have INCREASED for housing association tenants as the official HB data of today reveals unambiguously.

The same housing associations and councils who tell us the private landlords are bad and evict too many people when HAs and councils evict in the same number.

The same housing associations and councils who state that Universal Credit increases arrears yet will see those HA and LA landlords take 6 times more off tenants for arrears than a court allows under the very same Universal Credit!

Facts are just so damn pesky!!!

_____________________

Postscript: – Every time I publish facts that dare criticise the misnamed social landlords I get numerous individuals in housing saying well my HA doesn’t do this and similar comments.  In the absence of 1500+ responses from the 1500+ UK housing associations – and note FOI requests don’t apply to them as they are not public bodies – I can only report on the overall picture.

There are some bloody good and highly socially responsible housing associations yet plenty of de facto asocial and commercially driven private organisations masquerading as social and using social purpose as propaganda and for reputational purposes only.

As I have just said in a Twitter conversation that I “tar all landlords with the same brush as the bad ones” – I will gladly name and shame individual bad landlords and laud the good ones.  Yet when it comes to aggregate numbers and factual data the overall position is that housing associations have shafted their tenants by INCREASING rent levels despite the 1% imposed cut while council landlords have not and rents have reduced, albeit marginally.

Facts often refute the best laid myths and assumptions and regrettably the social landlords are only too keen to invent, develop and propagate myth and assumption while shafting the poor social tenant.  The lazy journalists and researchers in the media and the rest of the housing commentariat then pile manure on these myths and assumptions and social landlords come up wrongly smelling of roses!

In every case be it rent increases as here or scandalously high social tenant evictions that even Shelter and JRF fail to even see as independent bodies; or landlords taking six times the arrears payment that a court would award we find the average social tenant gets well and truly shafted by this tangled web of deceit and that has to stop and FACT however pesky has to prevail over these lies and known propaganda that emanates from the great and the good of social housing!

 

 

6 thoughts on “Housing Association rents INCREASE despite Tories imposed 1% rent cut

  1. Was it in Doncaster that a new service charge was created for driveways despite tenants living there for 20+ years and had no s/c on this before? One example of many regrettably and while I can accept that LLs don’t review service charges as often as they should – which is their fault – there are many examples of these rocketing (in % terms) beginning in 2016 that I am aware of across the country.
    Yet whatever it is the simple fact remain that on average and across the piece tenants are paying out more in rent and on average have NOT had a rent cut despite the imposed 1% charade

    Like

  2. Joe, service charges can only relate to actual costs incurred, they cannot be a back way for RPs to recoup lost rent. They have to be reasonably incurred and at a reasonable price. Yes there are rogue landlords out there but in my experience they are overwhelmingly in the private rental sector. If service charges have increased, that’s because costs have increased, and if a tenant has reason to suspect that service charges are unreasonable, then they can take a case to the First-Tier Tribunal (property Chamber).

    Like

  3. Yes simple shafting of the social tenant as I keep saying in higher overall rent costs coupled with reduced service levels due to the 15% – 25% staff cuts that occurred and falsely substantiated by this non 1% overall rent cut that has seen higher overall rolls for HAs

    Like

  4. Yes I agree – though this also means that HAs (a) found or even invented new service charge areas of which there is some evidence, and/or (b) increased existing ones by a significant amount in order to mitigate the imposed 1% net rent cut. It is still HAs shafting the social tenant

    Like

  5. Service charges may have something to do with it I think you’ll find !!
    Net rents were cut by 1% but if variable service costs have risen then they are not subject to the -1% but actual costs are passed onto residents–simple really !!

    Like

  6. Joe, I suspect that the ‘rent’ levels contained in the DWP stats you refer to, include eligible service charges because they too can be covered by Housing Benefit.
    Service charges (e.g. lift maintenance, grounds maintenance etc.) are not subject to the 1% ‘rent’ reduction because landlords are required to recoup any expenditure incurred in providing services and in many cases service charges will increase year on year due to inflation rather than decrease.
    I suspect that this is the main reason that HB levels are showing to have increased somewhat.

    Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s