1% imposed rent reduction = £1.73 billion MORE in rent paid by the social tenant

Landlords have been ripping off the social tenant. Yes I am talking about council and housing association landlords ripping off tenants as the facts below prove without any ambiguity. 

UK social housing tenants have to date been charged and paid £1.731 billion more in rent than the 1% rent reduction policy intended.  Yes that is £1.31 BILLION!

Rents – 1% rent reduction myth

In the November 2015 budget Chancellor George Osborne was outraged at the 20%+ increases to social housing rents since 2010 and he imposed a 1% rent reduction in social housing to run for four years beginning from April 2015.

This would save on Housing Benefit George Osborne claimed and logically we then look at the March 2015 average HB amount paid to council and housing association landlords and this – according to the rent reduction policy – see this figure reduce by 1% in April 2016 and by a further 1% in April 2017.

Rent reduction the HB facts

  1. March 2015 average HB to council landlords £80.76 per week
  2. March 2015 average HB to housing associations £91.45 per week

The theory is that by the latest figures the average £80.76 per week in HB paid to council landlords would have reduced by 1% in April 2016 to become £79.95 per week and by a further 1% in April 2017 to become £79.15 per week.

Yet the average HB paid to council landlords at the latest figures is £82.29 per week and £3.14 per week above this figure. The rent for council tenants has INCREASED in actual terms by 1.86% and by £1.53 per week rather than reduce by £1.61 per week,

The situation for housing association tenants is worse. The average £91.45 per week in HB should have reduced to £89.63 per week with the two lots of 1% reductions yet today it stands at an average of £94.63 and is exactly £5.00 per week higher than it should be in accordance with the 1% imposed reduction.

In actual terms it is £3.18 per week higher today than in March 2015 when it should be £1.82 per week lower than it was in March 2015.

All of the above figures come from the official HB statistics published in November 2017 by the DWP which you can access here and go to Table 5 if you want proof.  Below is what the figures amount to:

one per cent reduction

Comment

The facts prove that rents from council and housing association landlords have NOT reduced but have increased. There is no ambiguity in that and all so called social landlords have increased rent levels not reduced them.

This week Inside Housing released an article to say that due to the imposed 1% rent cuts housing associations have cut back on repairs by 14%. Yet the 1% rent cuts have not happened as the above reveals and so the social tenant is shafted again with a 14% cut in service level as well as rents increasing when they should have fallen.

IF the so-called tenant representatives such as tenants and residents groups and tenant lobbies such as TPAS and the rest were your MP you would vote them out. If they were your trades union representative you would want them sacked for incompetence and probably leave the trades union. Yet there is not even a murmur from any such claimed tenant lobby at all.

They were all equally silent from May 2010 which has seem council landlord HB increase by 21.62% and housing association HB increase by 22.42% while private landlord HB called LHA has decreased by 2.46% in the same time period.

At the last budget in November 2017 we saw Shelter, Crisis, Joseph Rowntree Foundation and others all lobby the chancellor to unfreeze and allow private landlord LHA to increase. The claimed rationale was this had led to increased homelessness from the private rented sector and it has, there is no doubt about that as average LHA has fallen in actual terms from £113.66 per week to £110.86 per week at the latest August 2017 figures.

Yet these same housing / homeless / poverty lobbies in Shelter, JRF et al never mentioned anything at all about the link between way above inflation social housing rent rises and homelessness and poverty. Not a dickie bird and not a dickie bird ever since 2010 too yet there is an undoubted causation here.

  • Council landlords in May 2010 charged tenants 59.53% of private landlord HB (LHA) and this increased to 74.23% by the latest August 2017 figures.
  • Housing association landlords charged 68.12% of the average LHA in May 2010 and now charge 85.36% of average LHA.

These staggering increases have gone unnoticed by the usual suspects in the housing / homeless / poverty commentariat and media who are obsessed with the private landlord being nasty as a premeditated position and the build, build, build proposed solutions of the UK housing crisis which has seen them not notice the huge affordability crisis in social housing.

In short there is no real or effective social tenant representative lobby and the national organisations are not campaigning organisations per se and they also receive funding from social landlords in part or in whole. 4.4 million social tenant households containing 6 million voters have no influence or power as nobody represents their interests and they will continue to be shafted by social landlords until they do get a representative campaigning lobby. The solution is clear as day yet whether social tenants from such a lobby and exert the huge latent power they have I doubt will happen.

Additionally the housing / homeless / poverty organisations have been guilty in the extreme of ignorance of the social housing rent rises to homelessness and poverty pathway and extreme lazy analysis too. They appear far more interested in their own survival than the causes of marginalised people they claim to represent.

Further, and sickeningly, we see social landlord upon social landlord saying because of the imposed 1% rent cut we are having to cut ….

Yet there has been no actual 1% rent cut per year at all and rents have increased despite the 1% imposed cut policy which hasn’t worked and never could from the beginning.

How have rents increased with 1% cut?

There are a number of reasons such as social (sic) landlords have revised service charges that existed prior to April 2016 and social media is rife with newly invented service charges since 2016 such as one council seeking to impose a new service charge for a driveway and many other creative (ahem) new charges.

However the main reason why must be that the imposed 1% year on year cut only applies to existing tenants but not to new ones. With 440,000 or so new social housing tenancies each year by today means there are 770,000 thousand new social tenants in the UK from April 2015.

Each of these 0.77 million new tenancies can and have been charged a higher rent level and even at social rent not just by way of conversion to the affordable rent model. In short social landlords and particularly housing associations charge new tenants since April 2015 very much more in rent than existing remaining tenants.

Personally I am aware of scores of actual cases of social tenants in and around Merseyside which is a low rent area that have seen the existing social rent of say £83 per week become when the existing tenant leaves (a) £103 per week under the affordable (sic) rent model but also (b) £96 per week for the new tenant under the supposed social rent model.

So even where there is no ‘conversion’ from social rent to affordable rent from the next week the actual social rent (ahem) level increases from £83 per week to £96 per week and an increase of over 15% in rent from the Friday to the Monday!

That is the main reason why the average social housing rent level as correctly and factually recorded in the Housing Benefit data has increased and not decreased since April 2016 when the imposed 1% rent cut policy began. This personal knowledge is limited to the North West area and thus is anecdotal yet it is the only way that the actual increase in rent in social housing can be explainable. There simply is no other explanation for this average rent and HB increase!

Finally we still see social landlords crying poverty and using the myth of the imposed 1% rent cuts to shaft the social tenant for more in rent combined with even less services. The reality is average rents have increased and social landlords have increased their rental income ever since April 2016 so there is no need for the 14% average cut in repairs or the cuts in staffing that have taken place and premised on this mythical 1% income reduction.

The social tenant has and still is being shafted every which way by those landlords who have the temerity to call themselves social.

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7 thoughts on “1% imposed rent reduction = £1.73 billion MORE in rent paid by the social tenant

  1. Back to the Conference I was recently at with Alock Sharma; the reason for the CPI+1% increase? Us Social Tenants! It’s because we’re having to wait longer for repairs & maintenance due to the 3 year 1% cut in rent the HA have had forced upon them!

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    • Its a 4 year alleged cut of 1% firstly – which as the facts prove above is no cut at all but an increase. HAs use this mythical excuse to cut repairs by 14% as also stated above (and for 15% – 25% staff cuts in some cases).
      The inflation busting CPI+1% (from 2020 for 5 years) is still tenants being shafted more and will lead to a tripling of homelessness too.
      The social (sic) landlords have lied and ably aided in that lie by the government and once again the tenant gets shafted

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  2. As we all know the council and goverment will do what they like but people need to remeber just because it states a 1% cut means we lose money from things that are actually needed like a 56 year old women having to wait 5 years for a bathroom adaptation because the council think its ok for her to stand at a sink sometimes boats have to be rocked !!!!!!!!

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