Originally posted on July 22 on Inside Edge 2, my blog for Inside Housing
Looking to gauge the effects of the latest benefit cuts on housing? The official impact assessments are at best a starting point.
Documents published for the second reading of the Welfare Reform and Work Bill on Monday evening (available here) do give the Department for Work and Pensions’ (DWP) view on what to expect, but there are several reasons why it is a severely blinkered one.
First, they only cover what is actually in the Bill and many of the main housing benefit changes in the Budget do not require primary legislation.
So there is an impact assessment of the five-year freeze on most working age benefits but it does not include the freeze of the local housing allowance. Similarly, we do not get the DWP view on ending automatic entitlement to housing benefit for 18 to 21-year-olds because that will be done by regulation rather than primary legislation.
Have any of the 516 housing announcements made by the DCLG under the coalition plumbed lower depths than this week’s ‘ending the tenant tax to help tackle rogue landlords’?
It’s not that there is no tenant tax out there to be tackled. The government could end the extortionate letting agent fees. It could stop the rent shortfalls faced by tenants whose local housing allowance has been cut. And it could limit the tax and financing advantages enjoyed by buy-to-let landlords that trap people as renters. Even if we limit the term to the private rented sector, and don’t include the bedroom tax, there are any number of options.
A technical change to an official index undermines everything that ministers have been telling us about private rents.
The Office for National Statistics (ONS) published its latest Index of Private Housing Rental Prices on Friday using improved methodology that puts the annual rent inflation rate at 2.1 per cent since January 2011.
That may not sound like much compared to soaring house prices but that is 75 per cent higher than the 1.2 per cent annual increase for the last four years derived from the old methodology. That had always seemed on the low side given the increases that tenants said they were paying, especially in London.
Here’s an ONS graph showing the difference it makes since January 2012:
-> Read the rest of this post on Inside Edge 2, my blog for Inside Housing