Bedroom Tax – Time for some facts about housing

The English Housing Survey has been released this week and below I reproduce its key findings as found on page 8.

One of these is a huge error and I have outlined why that is the case here in detail.  Simply the EHS says 25.5% of private tenants claim Housing Benefit.  The true and correct figure is 41.2% as the official HB figure reveal clearly and unambiguously. The rest of the key findings will interest all who are looking at the bedroom tax and other welfare reform policies of this coalition.  The 8 key findings I have simply numbered and reproduced below

Key Findings

1. The private rented sector has been growing in recent years, and is at its highest level since the early 1990s, equalling that of the social rented sector at 3.8 million households. In 2011-12, around two-thirds (65%) of households were owner occupiers.
2. Average weekly rents in the private rented sector continued to be well above those in the social rented sector (£164 per week compared with £83). While mean rents have increased in both sectors since 2008-09, private rented sector rents showed no significant change from 2010-11.
3. Almost two-thirds (64%) of households in the social rented sector were in receipt of Housing Benefit, compared with around a quarter (26%) of those in the private rented sector.
4. There was no significant change in overcrowding rates since 2010-11 for owner occupiers (1%), social renters (7%) or private renters (6%). Rates of under-occupation remained substantially higher in the owner occupied sector (49%) than in both the social rented sector (10%) and private rented sector (16%).
5. The energy efficiency of the housing stock continued to improve: between 1996 and 2011 the average SAP rating of a dwelling increased by 12 SAP points from 45 to 57.
6. The proportion of dwellings achieving the highest Energy Efficiency Rating (EER) Bands has increased considerably since 1996. In 2011, the social sector had the largest proportion of dwellings in the highest EER Bands A to C (34% of housing association and 26% of local authority dwellings).
7. In 2011, 5.4 million dwellings (24%) were non-decent, a reduction of well over 500 thousand compared with 2010. The rate was lowest in the social rented sector (17%) and highest in the private rented sector (35%).
8. The proportion of dwellings with damp problems has reduced from 13% in 1996 to 5% in 2011. Private rented dwellings were more likely than those in other tenures to experience damp problems, as they were more likely to be older stock.

Comments

1. The private rented sector has been growing in recent years, and is at its highest level since the early 1990s, equalling that of the social rented sector at 3.8 million households. In 2011-12, around two-thirds (65%) of households were owner occupiers.

There are now more privately rented properties in the UK than social rented properties. More people rent from private landlords than rent from social (council and housing association) landlords.

2. Average weekly rents in the private rented sector continued to be well above those in the social rented sector (£164 per week compared with £83). While mean rents have increased in both sectors since 2008-09, private rented sector rents showed no significant change from 2010-11.

The level of a privately rented property is on average DOUBLE the rent level for a council or housing association property.

Note private rents are not 20 -30% higher as the BBC errantly stated in the Radio 4 interview with Steve Webb this week over the bedroom tax

Note my comments here that we spend £2.2bn more in Housing Benefit for private rented properties than we would if they were rented by councils or housing associations. The real Housing Benefit drain is the private landlord set high private rent levels,

Note also this means we the taxpayer put more subsidy into private housing than we do into social housing.

The real and most-heavily subsidised housing sector is private renting!

3. Almost two-thirds (64%) of households in the social rented sector were in receipt of Housing Benefit, compared with around a quarter (26%) of those in the private rented sector

NB the above is false and I have asked that the government correct this.  The true figure for the percentage of private tenants who receive Housing Benefit is 41.1% and not the 25.5% (which the key findings rounded up to 26% here) as stated.  The full detail and the official figures I have used to prove this error are contained here

4. There was no significant change in overcrowding rates since 2010-11 for owner occupiers (1%), social renters (7%) or private renters (6%). Rates of under-occupation remained substantially higher in the owner occupied sector (49%) than in both the social rented sector (10%) and private rented sector (16%).

There are 60 per cent more tenants under-occupying in private rented than in social housing.  The government has told us there is a problem with under-occupation and this is why the bedroom tax has been introduced.  The government has clearly misled the public, the landlord and the tenant.

The government rationale for the bedroom tax is a myth and a proven falsehood.

Key findings 5 to 8 above show that social housing is a better quality product than privately rented housing as:

• Social housing is more energy-efficient than private housing and therefore cheaper to heat
• Social housing quality is much higher than the private rented sector and has substantially more properties meeting the decent homes standard
• Private housing has many more damp properties than social housing

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BEDROOM TAX – A VERY IMPORTANT COMMENT

The coalition government including the Prime Minister himself has argued the bedroom tax is fair because we shouldn’t be paying for spare rooms in social housing because we don’t pay for spare rooms in private housing.  The above figures show that to be false.

I will attempt to explain in the simplest possible terms and the easiest way to do this is to think of 100 social rented sector (SRS) properties and 100 private rented sector (PRS) properties.

The SRS 100

• Of the 100 SRS properties 64 will get Housing Benefit as 64% receive it
• Of these 64 properties 10% will be under-occupied
• This means 6.4 SRS properties that get HB will be under-occupied
• Therefore the under-occupancy rate in SRS HB properties is 6.4%

The PRS 100

• Of the 100 PRS properties 41.2 will get Housing Benefit as 41.2% receive it.
• Of these 41.2 properties 16% will be under-occupied
• This means 6.59 PRS properties that get HB will be under-occupied
• Therefore the under-occupancy rate in PRS HB properties is 6.59%

There are therefore more privately rented properties in receipt of Housing Benefit under-occupied than social housing properties in receipt of Housing Benefit.

The reason for the bedroom tax is because of the high number of under-occupancy in social housing the coalition claim.  Yet the under-occupancy is higher in private renting and therefore the coalition are telling porkies again!

Finally and I will keep this brief the social housing sector should be thanking the coalition for the bedroom tax.  This is because it highlights the fact we as a country waste £2.2bn per year more by paying for high private rents.  It reveals that the private rented sector gets MORE in subsidy than social housing does.  It reveals that social housing is a much better more secure all-round good and service than its private sector competitor.  It reveals in short the clear economic rationale for social housing and the logical economic reason why the government should be funding the development of more social housing on a massive scale as this will reduce the overall Housing Benefit spend.

One last simple point.  If you are out-of-work and want to work and a job opportunity comes along.  The job needs to be financially worthwhile, to pay you more in wages than you get in benefit.  Even the coalition agree with this when they say that Universal Credit (another welfare reform due this year) will always make work pay more.  That is right.

Yet if you live in privately rented accommodation and your rent is the average £164 per week it is much harder to take a job than if you lived in social housing where the rent is £83pw isn’t it?  The job has to pay more than £100pw more to make up for the £81pw higher rent you pay to a private landlord.

That is why in the simplest possible terms those who say we have welfare benefit dependency in the UK are wrong. It is the added cost of Housing Benefit to private landlords.  The real issue is high private rent dependency and high private rents act as a bigger barrier to taking up employment than the level of welfare benefits.