Tuesday, February 02, 2016

More on the housing crisis

Council house tenants have seen their rents rise four times quicker than average wages in the past five years, outstripping even the private sector and putting greater pressure on the country’s welfare bill. The average weekly rent for a council house in England rose by 27 per cent between 2010-11 and 2014-15, up from £67.83 to £85.89 per week – an increase of £939 in annual rent – data from the Department for Communities and Local Government shows.

This was roughly four times faster than wage growth, with average weekly earnings in Great Britain rising barely 6 per cent over the same timeframe. It has also been more than 50 per cent faster than the rise in council rents during the previous five-year period. Between April 2010 and March 2015, private rents grew by 11.5 per cent on average, less than half as quickly as council rents. Since most council tenants receive housing benefit, sharp rises in council rents have combined with high private rents and stagnant wages to drive up the country’s housing benefit bill.

John Healey, Labour’s shadow housing minister, said: “The real problem in our society has been wages flat-lining while costs are rising. Rent increases have part of the pressure put in ordinary families’ budgets. The Government has redefined the word ‘affordable’. For a council tenant, it used to mean half the open market rent. Now it’s 80 per cent of market rents. The risk for people is that what are designed to be affordable rented homes becomes harder and harder to afford.”

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