Private Rented Outlandish Taxpayer Expense Some Thoughts (PROTEST)

Grant Shapps the housing minister has repeatedly refused to regulate the private rented sector and the recent Housing Strategy was a chance to change that, yet it didn’t. The reasons why it should be regulated are numerous (as anyone who watched the recent Channel 4 week-long programmes will agree) yet I will focus on just the cost of non-regulation as the facts below fly in the face of Shapps assertions that regulating the PRS will cost more.

The official HB figures released 14 December 2011 show 1,582,830 HB claimants live in the private rented sector (PRS). This figure comprises:

  1.  43,990 REGULATED tenancies (2.8%) that each receive £80.30pw in benefit as a national average,
  2.  1,305,400 UNREGULATED tenancies (82%) that receive £112.01 in LHA and
  3.  232,560 UNREGULATED tenancies (15.2%) that receive £102.80 in HB.

These figures show each unregulated LHA property (2) receives £31.71pw more than (1) and unregulated (3) receive £22.50 more than regulated (1) and so UNREGULATED properties in the PRS receive £2.43billion more per year in benefit that the equivalent number of REGULATED properties.

We the taxpayer, pay out £2,432,921,588 more per year to these unregulated properties than we do for regulated ones.

The regulated tenancies at £80.30pw HB must make money else they would not still be offered for rent and so why do we all pay this huge ADDED COST for these unregulated (ie unchecked, un-monitored) properties than we do for regulate ones.

The cost of not regulating the private rented sector is therefore over £2.43 billion per year to the taxpayer as at December 2011 HB figures which state the position at end of September 2011.

These unnecessary costs in context – or what would £2.43bn+ pay for

1.  It would pay the yearly dole costs of 690,778 people

With JSA/IS set at £67.50 pw or £3522 per annum and with 1.6m unemployed and claiming dole that is 43% of the national yearly dole bill

2.  It would pay the support costs of 1.5m vulnerable people for 18 months

The yearly SP bill is £1.6bn and so we spend 50% more each year paying additional profit to unregulated private landlords than we do to support homeless persons, those fleeing violence, those with mental health, drug, alcohol, learning, physical and sensory disabilities and older persons in sheltered housing.

So we could:

  • Bring back resident wardens to all sheltered housing
  • Fund another 450+ domestic violence and abuse refuges
  • More than double the number of homeless hostels
  • Support another 1,500,000 vulnerable people each year
  • Yes that means all of the above and more

3. It would pay for an additional 18,500 NHS beds in hospitals at £360 per day

4. It would fully pay for an additional 37,500 new council houses per year at £65k build cost which in turn would save a further £80m per year in HB costs

Remember the alternatives above are just for the ADDED costs we pay for unregulated private properties over the cost of regulated ones.

There is no justification for the added costs we the taxpayer hand out to private sector landlords and Shapps has no justification not to regulate yet provides no explanation for his errant and off-hand assertion that it would cost the public purse more.

5. The added costs of not regulating mean that every taxpayer in the UK is paying £110 MORE per year in tax just to pay these added and unnecessary profits of Shapps friends’ the unregulated private landlord.