13 rents increase for every 1 rent cut in ‘bold’ Peabody BS rent plan

FOR EVERY ONE PEABODY HOUSING ASSOCIATION PROPERTY THAT HAS A RENT CUT THERE WILL BE THIRTEEN PROPERTIES WHO HAVE A RENT INCREASE!

FOR EVERY £1 IN RENT CUT THERE WILL BE A £8.13 PER WEEK RENT INCREASE FOR A TOTAL OVERALL RENT INCREASE OF £2.16 MILLION FOR PEABODY TENANTS

Ever get the feeling you are being duped and screwed financially? Then the likelihood is you are a housing association tenant as the latest plan from the great and the good of the social purpose riddled sector and which is being heavily sold as a rent cut is actually a case of 13 rents will increase for every 1 that has a rent cut. 

Joseph-Goebbels-2

The headline speaker at the next IH / G15 conference who will be warmly welcomed!

This post concentrates on the Peabody rent plan but be in no doubt whatsoever it will apply to every social tenant wherever they live and whoever their landlord may be.  You dear tenant are nothing more than a cash cow for your social feudal landlord.

Numbers and detail

Housing associations own and manage 2.8 million UK properties. 200,000 or so are at rented at what is called the ‘affordable rent’ or AR level and the other 2.6 million are rented at the social rent level or SR which is on average 44% cheaper than AR.

Every year 9.26% of tenants leave their property for one reason or another and need to be replaced with a new tenant. This means:

  1. 18,520 tenants paying the AR level will leave (9.26% of 200,000) and,

  2. 240,760 tenants paying the SR level will leave (9.26% of 2.6m)

What the heavily promoted BS rent plan means is 18,520 former AR properties each year will see a rent cut as the SR rent moves to LAR/GAR – the London Affordable Rent / Genuinely Affordable Rent level.

However, it also means that the 240,760 SR tenants who leave will have a rent increase to the LAR/GAR … but don’t tell anyone that for every 1 housing association property that has a rent cut there will be 13 that have a rent increase!!

FOR EVERY ONE HOUSING ASSOCIATION PROPERTY THAT HAS A RENT CUT THERE WILL BE THIRTEEN PROPERTIES WHO HAVE A RENT INCREASE!

The Brendan Sarsfield / Peabody Plan

Yesterday the original detail of this plan was announced in a BS self-penned article in Inside Housing magazine here. Vaguely, though enough detail, was given and I reported on this here as you can see.  YET note that this IH article has now changed and does not include the devil in the detail that I commented upon and how shameful Inside Housing! You wonder why I called you complicit in this fake news!!  Here is the relevant bit that IH have removed and the killer issue: –

bs deleted copy

As you can clearly see the emboldened text reads “Furthermore, all new tenants will be offered tenancies at the London Affordable Rent.”    This is the critical sentence and proves what I say above about 1 property having a rent cut yet 13 will have a rent increase and it is all down to the 9.26% average churn or replacement of tenants each year.

Peabody has 4000 AR properties of its 55,000 total and so 9.26% of these 4000 or around 370 will see the tenant leave each year and the 370 replacements will have a rent cut from the AR level to the LAR level.  Yet Peabody will have 9.26% of its other 51,000 tenants leaving and facing a rent increase from  level to the LAR rent level which is 4,723 tenants.

A rent cut for 370 tenants and a rent increase for 4.723 tenants!

To keep the numbers simple for illustration imagine that the rent levels are:

  • £100 pw for SR,
  • £150 pw for LAR,
  • £200 pw for AR

We see the rent cut for the 370 former AR properties that become LAR is a cut in income from £200 to £150 per week.  370 lots of £50 per week cut making a rent cut of £18,500 per week.  Yet we see that 4,723 former SR properties have a £50 pw increase in rent from £100 to £150pw for a rent increase of £236,150 per week. So a £236,150 per week rent increase less a £18,500 per week rent cut is in overall terms a rent increase of £217,650 per week and the minor amount of an overall £11.3 million increase in rent per year for Peabody!  

However, Peabody is selling this BS plan as a bold rent cut when it is a significant rent increase using the above to illustrate.  Peabody and Brendan Sarsfield is having you on.  He is being knowingly deceitful and choose 1000 other euphemisms for lying if you wish and there is no doubt that Brendan Sarsfield was overtly deceitful when he opened this article with:

Writing exclusively for Inside Housing, Mr Sarsfield acknowledged that the policy meant the association would be “deliberately cutting our income

If you want to get an accurate picture of the sums involved used the actual data on rents for a 2 bed Peabody property that Peabody supplied to the UK housing regulator in the latest Statistical Data Return (SDR) which reveal the 2 bed SR level was £123 per week, the 2 bed AR level was £210 per week and the LAR 2 bed figure is £153 per week. 

So we see Peabody cutting rent by £48 per week [£201 less £153] for each AR replacement tenant yet increasing rents for 13 tenants by £30 per week [£123 up to £153].  This means 13 x £30 per week rent increases or £390 per week in rent increases for every £48 in rent cut for an overall £342 per week increase in rent.

Brendan Sarsfield knows full well that overall rent income will INCREASE significantly for Peabody in his BS plan and the 2 bed actual figures above reveal that for every £1 in rent cut per week by Peabody they will receive £8.13 more in income from the rent increases for replacement tenants. [£390 divided by £48 in above example].  So for 9.26% of 55,000 tenant this is a £8.13 per week increase for 5,093 tenancies or £41,406 per week rent increase for an overall yearly INCREASED rent take of £2.16 million from Peabody tenants.  

In summary we see Brendan Sarsfield saying an increase of £2.16 million  or shafting vulnerable Peabody tenants for an extra £2.16 million per year is a rent cut!!  This is deceit, propaganda of which Goebbels would be proud and a similar BS plan will happen to all HA tenants not just those unfortunate enough to have Peabody as their landlord. 

The sycophantic commentary from many ‘luminaries’ of the housing world as to how bold this rent cut it (!!!!) in the IH articles is shameful and the decision of IH to amend this article by removing the all new tenants will be charged more verbatim comment of Brendan Sarsfield is a truly disgraceful piece of journalism and complicity.  

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