We welcome the research from Crisis and Zoopla on the growing disparity between rents and the Local Housing Allowance (LHA) published this week. We too recognise, and personally experience, the panic felt amongst private sector tenants dealing with unaffordable rent hikes as the LHA rates are now frozen again from April 1st. We agree that the disparity between rents and the LHA amount is scandalous.
It is clear that it is a huge factor in the increase in homelessness as private renters face eviction due to rent arrears as their rents raise way beyond wages, this is an issue that will not be addressed by the end of section 21 and is not addressed at all by the current iteration of the Renters Rights Bill (RRB).
We also agree that successive Governments’ negligence since the LHA calculation was slashed in 2011, from being aligned to the bottom 50% of rents to the bottom 30%, has contributed to the current situation. Only 2.7% of private rents across England are within LHA rates, and less than 5% in the Liverpool City Region (LCR). Politicians’ decision to allow this disparity to increase, by freezing the LHA, and failing to consider the impact this is having and has had on renters and homelessness is a catastrophic failure.
A solution to this crisis cannot be complete without the introduction of properly formulated rent caps and controls.
The ONS has confirmed that rents have increased by 8.1% in the year to January alone, outstripping inflation by 6 percentage points and 2.5% ahead of wage growth. We agree that this is unmanageable, and agree that a social housing program must be part of the solution. However we are certain that no discussion on homelessness, private renting or the financial crisis our country faces is complete without an urgent and robust discussion on rent caps and rent controls.
It cannot be the case that renters and their supporters and representatives do the work of the private landlord class by lobbying for ever increasing amounts of public money to be handed to private landlords directly from the public purse and for the increases in these payments to be tied only to the rents landlords wish to charge and “market forces”.
If we are going to agree that housing benefits are required to keep people in their homes and that these benefits must be linked to “real rents” then we must also surely agree that these costs must be capped and controlled.
The RRB purports to offer solutions to this crisis, however we see nothing which will provide any better protection than the current system which allows only for rent increases within a tenancy to be appealed to the First Tier Tribunal and only when they are arguably inconsistent with market rents.
Without caps and controls on increases between tenancies, and with a fair rents system measured only against market rents, rather than against any fair and independently calculated metric, rents will continue to rise and the cost to ourselves, the public, along with it. The charity Shelter provided policy and international evidence on rent caps and controls during the last general election, why doesn’t the RRB include rent caps and controls?
Rent caps and controls are essential to stabilise the cruel and unpredictable situation that people find themselves trapped in. Successive governments have consistently ignored campaigners and protected the profits of the landlord class for decades. What does that say about them?