By Pete Challis
Continuing our Orwellian theme: despite Government claims to the contrary, rents are rising and so is housing benefit.
Recent data, published by the Department for Work and Pensions and the Valuation Office Agency show that rents are increasing and housing benefit expenditure continues to rise, calling into question the claim made by David Cameron.
First the claim:
David Cameron; Prime Minister’s Questions; 11 January 2012: “What we have seen so far, as housing benefit has been reformed and reduced, is that rent levels have come down, so we have stopped ripping off the taxpayer.”
What does the evidence show?
Each quarter the Valuation Office agency publishes an analysis of private sector rents for the previous 12 months broken down by local authority in England. The analysis is based on over 500,000 rents. Comparing the first available data set – 12 months to June 2011 – with the 12 months to March 2012, average (mean) monthly rents are up £11/month; median rents are up £5/month, lower quartile rents are unchanged but upper quartile rents are up £25/month. (The median rent is found by putting rents in order by value and finding the middle value. Lower and upper quartiles are the values that are found 25% and 75% along the list.)
Of course, these national figures disguise regional differences, with the North East being the only region recording a fall.
At a local authority level it enables a ‘Rents Index’ to be constructed. Here are the indices for David Cameron’s, Grant Shapps’ and Iain Duncan Smith’s Parliamentary constituencies.
Housing Benefit expenditure
Using data published by the Department of Work and Pensions annualised housing benefit expenditure is up £1.893bn. The growth in expenditure is being driven by a big increase in the number of private sector tenants claiming Local Housing Allowance and above inflation rent increases in local authorities and housing associations.
The number of claimants is up by over 250,000.
Even though there is a small fall in the average amount being paid in local housing allowance, the average HB payment is up because the growth in claimants is largely concentrated in the private rented sector which costs £37/week and £27/week more than council and housing associations respectively.
The change in spending can be seen in the tables below.
The evidence shows that rents are rising and that housing benefit expenditure has risen by 9 per cent since David Cameron entered Downing Street. His own constituency casework should tell him that any claim that rents are falling is false.