Finance News

Cameron Misleading over Rents

Em Morley - January 13, 2012

Comments made from Prime Minister David Cameron regarding private rent prices have been slammed by the shadow housing minister.

Cameron Misleading over Rents

Cameron Misleading over Rents

 

During a recent Prime Minister’s Questions, Mr Cameron responded to a question on rental prices from Dame Joan Ruddock MP, Labour’s representative for Lewisham Deptford. Cameron responded by saying: “As I understand it, all parties are committed to reform housing benefit. That was Labour’s commitment before the election.

“The housing benefit bill is completely out of control. Labour’s own welfare spokesman said last week that, at £20 billion, it was unacceptable and had to change. 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.”[1]

Attack

Unsurprisingly, the Prime Minister’s comments did not sit well with shadow housing minister Jack Dromney, who retorted: “What planet does David Cameron live on?”[1]

Dromney went on to say: “There is no evidence that rents are falling. On the contrary, every survey including that conducted by Shelter demonstrates that private rents continue to soar. We will be asking No. 10 to correct the statement made by the Prime Minister to the House of Commons which is clearly wrong.”[1]

Mr Cameron’s comments also riled members of the social housing sector. Abi Davies, Assistant Director of Policy and Practice at the Chartered Institute of Housing, took to Twitter to state: “I’m wondering what data David Cameron is using to support his claim that rents have fallen due to housing benefit reform.”[1]

Housing consultant Joe Halewood claimed: “The facts prove Cameron has misled Parliament with this statement.”[1]

Queries

It is thought that Cameron based his statement on findings from LSL Property Services, whose rent index showed a fall in November. However, LSL Director, David Newnes, said: “Although rents fell on a monthly basis in November, it’s premature to suggest this is a consequence of policy changes.”[1]

Newnes suggests that the main reason, ‘is likely to be the usual seasonal slowdown. Since 2008, November rents have risen only once-by just 0.1%-and have fallen every December. In all of the last four years, rents started rising again by the spring.’[1]

The explanation for this, Newnes states, is, ‘in the run-up to New Year, landlords tend to be less aggressive with pricing as greater prices on tenant finances and time away from work or study means a higher risk of empty properties in this period.’ He says that, ‘we will only be able to measure the impact of the cuts for social tenants once they have had more time to feed through into the whole market.’[1]

[1] http://www.landlordtoday.co.uk/news_features/Cameron-slated-over-misleading-rental-claims