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

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

11:26 AM, 29th September 2016, About 6 years ago 19

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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

Gromit

13:56 PM, 30th September 2016, About 6 years ago

As mentioned by a previous poster, Corbyn will get his wish, as UC and s24 kick in, Landlords will be evicting HB Tenants in droves. But guess what the HB "subsidy" to Landlords will reduce dramatically.

I wonder if we'll see a headline in 2021 "Government gives a £9bn subsidy to Travelodge!"

Mark Alexander - Founder of Property118 View Profile

14:07 PM, 30th September 2016, About 6 years ago

Reply to the comment left by "Barry Fitzpatrick" at "30/09/2016 - 13:56":

A £50 billion payment to Travel lodge probably wouldn't be enough to cover the inevitable UK Government inflicted homelessness problem by then. Landlords will get blamed for being greedy of course!
.

Sean Graveney

15:34 PM, 30th September 2016, About 6 years ago

Reply to the comment left by "Mark Alexander" at "29/09/2016 - 18:33":

I agree with this, or most of it. The tax changes and benefit caps will lead to a lot of upheaval if landlords cannot afford to rent to housing benefit claimants. Something has to give and it could be a massive story in the making. But without a huge increase in working people to let to then how will so many landlords be able to turn to only renting to such working people? It's one thing if housing benefits won't quite pay landlord bills but voids is a whole different matter. How do you think that circle will be squared? Will it put downward pressure on rents or am I missing something?

Steven Burman

16:10 PM, 30th September 2016, About 6 years ago

Sean, there are still huge numbers of working people who are struggling to find decent accommodation to rent. I don't believe that there necessarily needs to be a huge increase in working people to take up the properties being vacated. Many landlords, myself included, are or will, take the decision to sell up thus placing even more pressure on the PRS and potentially forcing rents up further.

You would have thought that somebody in government must realise that chaos is about to be unleashed? Apparently not!

It will be the already hard-pressed Local Authorities that will have to deal with the problem of finding accommodation for those displaced.

Could be a good time to invest in Travelodge shares!!

Gromit

17:50 PM, 30th September 2016, About 6 years ago

Reply to the comment left by "Sean Graveney" at "30/09/2016 - 15:34":

s24 will result in rents going up, but lots of people will move to cheaper accommodation in order to keep the level of rent they are paying/can afford about the same. They will be moving to either smaller houses or to cheaper more outlying districts.

There will be a cascade effect but with people at the bottom of the ladder as we've been pointing out nowhere to go because there is nowhere cheaper. So it is these people at the bottom who will be falling back on the LA to provide them with temporary accommodation.

Sean Graveney

19:27 PM, 30th September 2016, About 6 years ago

Thanks for the replies. I really don't doubt that it will be chaos. There is going to be a hell of a lot of people at best having to uproot somewhere cheaper and at worst being made homeless as landlords are forced to make decisions best suited to their business. There will be pressure on the government from councils as their budgets become seriously stretched. I just don't see hordes of working people without accommodation. If landlords decide to only rent to working people then some are going to face empty properties or perhaps some downward pressure on yields. If in actual fact the working people do have accommodation but will seek better quality as it becomes available then the lower end of the sector will suffer. If the working people will look to reduce outgoings by moving somewhere cheaper then the higher end would suffer. I just don't see how the PRS could turn their back on HB claimants en masse without it effecting both those tenants and some within the industry. It seems like it's going to be tough choices for all.

Basically I guess I'm saying that the 9bn that Corbyn is talking about is currently going towards the service that landlords provide and whilst S24 and benefit caps might mean it isn't enough to provide that service as it currently is... can the PRS really do without that 9bn quid? Is there 9bn quids worth of slack that can be taken up by other people?

Mandy Thomson

8:03 AM, 2nd October 2016, About 6 years ago

While we're talking about the greedy end beneficiaries of housing benefit, let us not forget that there are other benefits that are given to the claimant specifically to enable them to pay other "greedy" private service providers:

*attendance allowance, adult social care and carers allowance, paid directly to the service provider, or paid to a carer working as or employed by, a private company, by the claimant
*bereavement payments to pay (private) funeral directors
*cold weather and winter fuel payments to pay (private) gas and electricity suppliers
*school uniform allowance to pay (private) clothing retailers
*free prescriptions and eye care, paid to (private) pharmacists and opticians

And let us not forget all the other "greedy" end beneficiaries of the welfare state who (allegedly) make no profit such as councils and the NHS.

Not to mention large multi national companies who pay low wages, forcing their staff to claim benefits, while their employers avoid paying taxes in the UK - these people really are greedy (not to mention immoral).

But wait, none of these is as greedy, nor as immoral as those private individuals who provide housing, particularly to those in need, whom the state has failed in its duty of care to house.

The fact that some of these private housing providers are not that much better of in real terms than those they house, while often putting up with challenging behaviour from their tenants, elicits no sympathy at all, in fact, the opposite...

Sorry, but have I missed something? Could someone please explain to me why non corporate private landlords are so despised for making a modest living from an often difficult occupation while helping the state and the wider community?

Steven Burman

9:21 AM, 3rd October 2016, About 6 years ago

Reply to the comment left by "Sean Graveney" at "30/09/2016 - 19:27":

Sean, you have hit the nail on the head with your comment '...whilst S24 and benefit caps might mean it isn’t enough to provide that service as it currently is...' The effects of this will leave many landlords with a decision to make - service the PRS at a loss (or very little return) and hope for a Capital Gain in the long term or cut losses and sell up. Many existing landlords (particularly those with high LTV borrowings) will sell up as there is little point in continuing with little or no return.

It is quite conceivable that with many landlords selling up, demand will continue to outstrip supply (which will be reduced by landlords selling up) and rents will continue to rise.

Corbyn is as deluded as his Tory counterparts (more so in fact) because he seems to think that the PRS are going to sit back and do nothing while he and his cronies continue to fleece them.

Unless the government sees sense and repeals S24 there is going to be mayhem. But perhaps this is actually the intention?

Jamie M

9:55 AM, 3rd October 2016, About 6 years ago

It won't be long before we see Corbyn (with film crew) sitting on the floor with a starbucks coffee in a damp room in a run down house (they've broken into as it been boarded up for years) accusing despicable landlords in the UK of renting this place to poor vulnerable migrants with no heating no electricity, no water, no double glazing, no food packages delivered daily from the food bank, no 66" TV, no IPhones, no sky sports, no broadband and I Pad, no cat and dog food for their 5 pets, dishes dirty, kitchen filthy, bathroom disgusting, garden a rubbish tip, no solar panels, and no chocolates on their pillows when we nasty landlords haven't supplied the turndown service to these people, highlighted along with all of the above in the new labour housing manifesto.

Landlords aren't just in charge of border control (now that the border agency has been found to be utterly useless) but we are now responsible for the well-being of all homeless people.

They focus on anyone but themselves and their clueless promises to get into and stay in power and their complete inability to do anything or achieve anything for the people who voted for them, believing the utter crap they peddle about fairness and equality.
They all live in big houses (many have 2 or more) and live the life of Riley whilst bullshitting the masses about how horrible and nasty landlords are.
The bloody moron/s!

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