When is a claimed rent cut actually a rent increase? When that claim is BS of course and BS aptly happens to be the initials of Brendan Sarsfield the chief executive of Peabody who has today claimed to be giving rent cuts when in fact, as the following damn pesky numbers prove, is actually a rent increase!
Sorry reader this contains numbers that many of you dislike but it the only way to show what a bunch of deceitful charlatans social (sic) landlords are in hiding behind their social purpose and charitable status personas are actually doing … which is shafting the vulnerable social tenant yet again with ever HIGHER rents than before and not the lower and fairer rents they claim.
Peabody will be charging tenants 50% more in rent yet Brendan Sarsfield claims this to be a rent cut!! What’s more this new rent policy is the first example of the Labour Party housing policy of John Healey that I said last week will increase rents for all social tenants and so bet your bottom dollar it will happen with all social (sic, sic, sic) landlords right across England. Yes, once again we see the social tenant treated as an ignorant cash cow by housing associations and ably supported in that aim by Labour Party policy … which either shows John Healey to be complicit in this, ignorant of this or both!
It also means the death of the 1948 Welfare State housing element that we now call social rent as the graph below reveals what the split will be among Peabody properties by rent charged and sees the traditional social rent level fall from over 93% of all Peabody properties today to just over 35% of its properties by 2027.
If Peabody continues on its current course of 93.2% of its general needs properties being at the social rent level and 6.8% being at the affordable rent level the trend shows that will change to 79.7% : 20.3% at in ten years time. It also shows under the NEW model that social rent falls to just 35% of all Peabody housing! The death of social housing comes from the enemy within!
Extrapolated and using the actual 2 bed net rent levels Peabody charged in 2016/17 as the average for all its properties the current £104.7m in rental income that gives will increase to £113.8m by 2017 as more affordable rent properties replace the current social rent level properties. YET the new BS rent plan will see the rental income increase to £118.7 million and £4.9 million more per year by replacing the affordable (sic) rent model with the London Affordable Rent model. Instead of charging tenants £9 million more per year with the current AR policy, Peabody will be charging its tenants £14 million more and this new policy is thus a 50% increase on the affordable (sic) rent model!!
How can that be?!
The new BS rent plan will see in 2027 the current Peabody rent tenure move from:
93.2% social rent to 35.3%
6.8% affordable rent to 2.6%
0% London Affordable Rent to 62.1%
The key sentence in the highly duplicitous article penned by Brendan Sarsfield in Inside Housing today I have emphasised. The Inside Housing article says:
Under the proposal, Peabody will convert the roughly 4,000 homes it currently lets at affordable rent to London Affordable Rent, a tenure outlined by mayor Sadiq Khan in his Housing Strategy, and which is more closely aligned to target rent, with an average rent of £153 a week for a two bedroom property. According to Mr Sarsfield this process has already begun. Furthermore, all new tenants will be offered tenancies at the London Affordable Rent.
The issue is the churn – the number of new tenancies each year as existing tenants leave each year to be replaced by new tenants – and hence “…all new tenants will be offered tenancies at the London Affordable Rent” means that ALL 1,476 new Peabody tenants each year – the churn of 9.26% – will be charged higher rents.
The housing association average length of tenure is 10.8 years which gives a churn rate of 9.26% and this means that 1,476 general needs Peabody tenants leave their property each year. Instead of being charged a rent of £123 per week for a Peabody 2 bed property that the existing tenant paid, the new tenant will AUTOMATICALLY be charged the £153 per week rent that is the London Affordable Rent (LAR) level.
The Statistical Data Return reveals that Peabody have on average 216 affordable rent tenancies each year (1078 in the 5 years of the AR programme) and 14,862 general needs tenants on social rent tenancies.
Thus the new Peabody BS plan will see 9.26% fewer AR rents per year so a rent loss to Peabody of 100 lots of £48 per week (£201 AR rent down to £153)yet will see 1,476 new tenants each year charged £30 per week more (£123 social rent to £153 LAR.)
Last week when the John Healey Labour Party housing policy said ‘genuinely affordable rents’ I stated (a) he means the London Affordable Rent, and (b) this would see the automatic conversion of social rents to this misnomer, and (c) it would mean significant rent increases for all social housing tenants. (See here, here and here) This is precisely what the Peabody BS plan is – the automatic conversion from social rent to London Affordable Rent / Genuinely Affordable Rent – and once again the so-called social landlords ripping off the social tenant by charging more and more in rent!
Detailed numbers (lots of numbers sorry!)
Using the actual rents Peabody charges at the social rent level and the affordable rent level I extrapolated the yearly rental income and factored in the 9.26% churn figure to give the two data tables below.
The first (top) is the rent roll from the new BS plan using the LAR and the second (bottom) is Peabody continuing with its current course (2011/12 to 2016/17 and ahead of merger with Family Mosaic) and this reveals the added rental income the new LAR plan gives over the former.
What the very basic data tables above show is that the new course of abandoning the AR model for the LAR model, the basis of the rent cut claim, will give Peabody £118.7 million in income whereas continuing with it gives them a rental income of £113.8 million. So instead of getting some £9 million more per year from the AR model continuing Peabody get in some £14 million per year more.
This so-called rent cut from Peabody gets them 50% more from tenants by charging them £14 million per year more than the £9 million per year more that the affordable (sic) rent model would give! You are not telling me that Brendan Sarsfield or any other social housing chief executive would not know this is the outcome of such a change in policy.
Thus he is deliberately and knowingly attempting to deceive and in simple language lying through his teeth when he says (a) this is a rent cut and (b) this is a fairer rent basis. It is nothing more than total bull shit from Brendan Sarsfield.
I have to admit it is a clever attempt to deceive for a housing association and far more subtle and devious than they typical try … yet it is an absolute deception nonetheless and will mean they are once again screwing the vulnerable tenant (who they have the audacity to call the customer!) for more and more in rent each year. NB – the data tables exclude inflation in order to show this deceit and yes this does mean even more will be charged to tenants when inflation is factored in and even more still when the inflation-busting social rent formula of CPI plus 1 per cent comes in from 2020.
Yet again I take task with the complicit and lazy Inside Housing magazine for publishing this complete crock of BS and then promoting it as fact as they have been doing all day on Twitter eg
Rent Fairness, Brendan Sarsfield? Hmm! It is oh so easy to dupe the complicit journalists at IH but as I have proved above you deliberately set out to deceive here with your self-penned article and have been found out.
Your lie or claimed rent cuts has travelled half-way around the world but has just put its boots on …
I notice too that the Inside Housing article quotes Polly Neate the chief executive of Shelter welcoming this move. However, I can excuse this as Polly Neate would not be expected to know the devious ways of the housing association chief executive yet and as I say above this is one of the cleverest attempts at deception from the housing sector I have seen in a long time.
All I would say to Polly Neate, the former chief executive at Women’s Aid, is consider how many more women will be refused social housing from refuges as the rents have increased yet again and they cannot afford the new London Affordable Rent level? How many more will be shipped out of the capital to the regions? How many more will be caught by the overall benefit cap because of these increased HA rent levels?
But I must be scaremongering again #ukhousing because one of your ‘great and good’ has said this is a rent cut and a fairer rent system …
John Healey and the Labour Party – This is your ‘genuinely affordable rent’ in practice and it contains all the truly offensive aspects I said it would contain when you released this truly offensive policy last month. The exact same comments I made when Sadiq Khan introduced his London Affordable Rent level a year ago (here) which is between 14% and 52% higher than social rent and which John Healey called ‘genuinely affordable rent.’
Poverty, arrears, eviction and all forms of homelessness will increase because of this policy which sees social rent AUTOMATICALLY convert to this London Affordable Rent / Genuinely Affordable Rent model and which is nothing of the sort … and now all of those housing association chief executives who are paid between double and triple the Prime Minister’s salary can say the Labour Party housing policy supports this ripping off of the social tenant
Finally, anyone who has ever read any of my housing blogs, which is millions each year, will know I use numbers to prove claims and opinions are BS. Numbers put people off but they are undoubtedly factual and always support and substantiate my arguments. Many readers perceive I am anti-Tory and pro-Labour and choose to pigeonhole me with that and every time I attack Labour housing policy I get so many complaints and angry responses.
The reality is I say it as i see it and Labour housing policy is exactly what this deceitful housing association is intending to do and screw the vulnerable social tenant for more and more in rent and directly create greater poverty and homelessness for vulnerable people. It is not as if I haven’t told you this before as my Twitter avatar and spiel has said all these years … I hate vulnerable people being shafted and that is what is happening here by devious and deceitful and allegedly social landlords … and by Labour Party housing policy too !
PS – I had almost forgotten this blog from four years ago when the same Brendan Sarsfield shared a platform with Lord Freud at the CIH conference and said the Bedroom Tax wasn’t a bad policy. Here’s the relevant bit: –
As you can see he says the Bedroom Tax is ok just badly implemented (oh where have we heard that one before!!) and he goes on to say that he is right and THE TRUTH HURTS.
Yes it does Brendan as you can see from the above in which I demolish your deceitful claims of rents cuts and a fairer rent system with those damn pesky things called facts.
YES THE TRUTH HURTS and you and your accomplices in Inside Housing are guilty of deliberate and known FAKE NEWS in your claims.