Labour attack private landlords for being ‘subsidised’ with £9bn in housing benefits

by Property 118

11:26 AM, 29th September 2016
About 2 years ago

Labour attack private landlords for being ‘subsidised’ with £9bn in housing benefits

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Labour attack private landlords for being ‘subsidised’ with £9bn in housing benefits

In his Keynote speech to close the Labour Party conference in Liverpool,  the leader of the Labour Party Jeremy Corbyn, accused the government of subsidising private landlords spending £9bn of housing benefits in the sector. A sum double that of 10 years ago.corbyn

Despite the Private Rented Sector (PRS) now accounting for over half of housing benefits tenants, the total cost to tax payers last year for government social housing was £15.2bn.

Jeremy Corbyn said, “look what’s happened to housing under the Tories house building has fallen to its lowest level since the 1920s, home ownership is falling as more people are priced out of the market, evictions and homelessness go up every year, council homes are sold off without being replaced.

“And another consequence is that we’re paying over £9bn a year to private landlords in housing benefit.

“Instead of spending public money on building council housing, we’re subsidising private landlords. That’s wasteful, inefficient, and poor government.”

The RLA immediately responded with policy director David Smith saying, “millions of tenants rely on housing benefit in both the private and the social housing sectors, but proportionately far more is spent on social housing tenants than those in private accommodation.

“With the private rental market having doubled in size since 2002, it is inevitable that more housing benefit claimants will be living in the sector.”

Mr Corbyn also touched on the subject of bringing more stability to tenants with future policies around potential rent controls. He said “we will control private rents.”

It is fair game in politics to be critical of the failings of government to deal with the housing crisis, however to insinuate that private landlords as a group are doing something wrong by using the word ‘subsidising’ as an accusation of profiteering rather than providing a service is not an accurate reflection of the services provided by many Property118 readers.



Comments

Jack Craven

12:23 PM, 29th September 2016
About 2 years ago

“Instead of spending public money on building council housing, we’re subsidising private landlords. That’s wasteful, inefficient, and poor government.

Exactly right, build more council houses then we won't have to deal with councils at all.

Dr Rosalind Beck

13:42 PM, 29th September 2016
About 2 years ago

Well, all I can say is 'not for much longer, mate!' Private landlords are going to leave this part of the sector in droves as s24 kicks in and then whichever Government is in power is going to be going down on their knees to get private landlords to take on tenants on benefits (on a local level they already do). Personally, I shall take them to 'get stuffed!' They will have made their bed and they can lie in it. They'll have to put up all the homeless in Travelodges and when they run out they'll have to set up camps in the countryside. Why should landlords do it and then suffer all the insults?

Idiots.

And how come it's okay for Housing Associations to use public money to provide housing but not private landlords? In many parts of the country private landlords do it for less money (especially taking into account the fact that landlords pay tax on the rent, so the Government gets it back). It's as though Housing Associations do it out of the goodness of their own heart. Rubbish - some of their staff are paid a packet. And unlike landlords they still get their wage packet at the end of the month whether the tenants pay the rent or not. We don't.

michael fickling

15:16 PM, 29th September 2016
About 2 years ago

Ive heard that strict rent controls were imposed in New Zealand years back....and pretty soon there was a shortage of rental property...surprise surprise...whose going to go into a business where the government decides what you can charge ?...>>not many...so...after a few years they had to "de regulate"..take the rent limits off etc......result... rental auctions !..yep apparently prospective tenants sometimes even had to attend rental auctions ... bid for remaining property to rent and rents then went sharply up.....In short the gov. eventually achieved the exact opposite of what they initially sought. Eventually with the controls removed. AND passage of time...( U turn... sounds familiar ?) a free market re emerged and things settled down again..Corbyn hasnt a business bone in his socialist body if he cant see what rent restrictions would lead to. Perhaps this is the foolishness we might expect from him. However given Cl 24 it seems many senior conservative ministers are also ignorant of market forces and realities.. A capitalist country such as ours needs to be free market ... a market ...is a market...thats just how it is....leave it alone and over time it will largely adjust and moderate itself.... or tamper at your peril !...( Greater London and its commuter belt may be different but it has been so for twenty years or more)...
Governments that tamper invariably create major problems which they havent anticipated.We landlords should be very wary around rents because if we do overturn /reduce application of Cl 24..( in a similar way to ireland ? ).I suspect that rent restrictions will indeed be the next silly move...we just have to drive it home that renting property is a business and attacking it with controls and taxes on actual costs !... will have the same effect as it would on any business ....namely an exit from the market of investors ( even corporates if rents are restricted ) and a huge developing supply problem....as per the Irish ..tax changes and effect scenario and as per my other example .Decreasing numbers of rental homes...increases in homelessness and rents. There will be more similar histories out there im sure. Any offers ?

Yvonne Francis

17:47 PM, 29th September 2016
About 2 years ago

Does any one know how Corbyn proposes to control rents? I've rent property for over 35 years and when I started there was such a thing as fair rents. Lots of Landlords got away with it but if your house was discovered for any reason like complaints to the Council by tenants then you were fair rented. Your rent was cut in half. Your house was devalued as the fair rent status could not be lifted. I rented to students and had to use an agent who in turn rented directly to Oxford University as they would not deal directly with Landlords. Property let to institutions could not be fair rented. I did this for four years until the University realised they were disadvantaged. I then had to rent sweating blood!. Luckily fair rents were abolished a year later.

It's like everything else now it's very uncertain which way this will swing. If Corbyn will create chaos or swing to victory. But not knowing how he may control rents even more difficult. My rents are slightly under markets rates which I prefer but if there was any chance of a price freeze, sometimes mentioned in regards to rent controls, then I would increase them ASAP.

Appalled Landlord

18:30 PM, 29th September 2016
About 2 years ago

The word subsidise means to help by giving money, to pay part of the cost of something.

It is not landlords who are being subsidised, it is the people who are given the welfare money. They are being subsidised for not being able to command an income high enough to support their households. The purpose of the subsidy is to prevent people becoming homeless and having to be housed by councils at greater cost than the private sector rents.

Corbyn’s claim that landlords are being subsidised by housing benefit is either a politician’s sophistry or, if he believes it, an admission of economic illiteracy.

“Instead of spending public money on building council housing, we’re subsidising private landlords.” This suggests to his gullible audience that a government could stop paying housing benefit and divert the money instead towards building houses.

This is another example of either sophistry or economic illiteracy. Where would the people on housing benefit go once they had been evicted en masse for non-payment of rent? How much would it cost to put them in “temporary” accommodation - which might become permanent?

Mark Alexander

18:33 PM, 29th September 2016
About 2 years ago

Not a subsidy, it's below market value payment for housing provision.

Mr Corbin need not worry about it too much as less landlords are willing to rent to benefits claimants due to high risk and capped benefit, hence the payments of housing benefits will reduce naturally as landlords exit this market.

Where those being evicted will live is another matter! Has Corbyn given that any thought I wonder?

The numbers of evictions will rocket when the new landlord tax regime kicks in. God help anyone claiming benefits to pay their rent. Capped rent and Universal Credit doesn't help either.

Landlords will not be able to afford to keep them on renting to benefits claimants. Instead they will do what most Housing Associations are doing and rent to working folk. They will also end tenancies which are no longer profitable.

I have no idea where the most vulnerable in society will live because the Councils are already using Travel Lodge for emergency housing because they have nowhere else to put people.

What a mess, and to think that Shelter fully supports the legislation that is causing this.

You might ask why?

A cynic might suggest that Shelter are nothing without a homelessness problem and landlords to attack!
.

Simon Hall

18:42 PM, 29th September 2016
About 2 years ago

http://www.thepoke.co.uk/2012/08/16/osborne-fails-a-level-maths/

George Osborne failed his A level Maths and he was a bit of pr**k in class flicking rubber bands on others whilst sitting in exam room.

Steven Burman

19:35 PM, 29th September 2016
About 2 years ago

Corban is an unelectable kn*b and the Labour Party are history. Who gives a toss what this cretin says?

13:39 PM, 30th September 2016
About 2 years ago

Appalled Landlord is spot on: "It is not landlords who are being subsidised, it is the people who are given the welfare money."

Corban's philosophy is all very Utopian, but it's utterly unrealistic. He really needs to learn Economics 101 and the law of Supply & Demand. He'd be better off focussing on lifting the poorest sectors of the community, rather than trying to drag the better off down to mediocrity.

Andy Bell

13:51 PM, 30th September 2016
About 2 years ago

He got that so wrong, it's the populist kind of rhetoric that he is known for, but it's not nearly as bad as what Gideon has done.
His campaign pledges are now up for discussion within the party before they become official policy proposals. So now is the time to bring what influence we can to add reality to the debate.
Please remember not all Landlords are Conservative supporters and not all Labour members or the PLP are infatuated with all off Jeremy's ideas so the opportunities are there for influence.

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