On 11 January, Cameron told parliament that the Coalition’s housing benefits reform was reducing private sector rents.
He told the House of Lords: “What we have seen so far, as housing benefit has been reformed and reduced, is that rent levels have come down, so we have stopped ripping off the taxpayer.”
His claim has since been disputed by housing experts including the Chartered Institute of Housing, the National Landlords Association and now shadow Housing Minister Jack Dromey.
Being branded a “liar” is never nice but in this case the statistics aren’t in Cameron’s favour.
Earlier this week, figures out by LSL property Services found that rents in the private rented sector rose in January for the first time since they began compiling their survey and annually by 4.3%.
It seems Shadow Housing Minister Jack Dromey was right to call out David Cameron and Grant Shapps last week, after they said rents were heading downwards. How can they be with the current demand in the PRS?
One Mortgage Solutions reader felt that Cameron was spot on about rents.
He said: “I preside over 500 privately let properties in the North of England and can tell you that rents are falling.”
His argument is that more people are attempting to let their property due to stagnant sales, therefore increasing supply and causing rents to become more competitive.
While that might be the case in the North, it may not be in the South and the underlying issue remains that the mortgage market is still weak with home ownership on the decline.
First-time buyers need to save for far larger deposits than necessary pre-credit crunch. We’re still in short supply of consumer confidence and funding is less available.
And looking at some of the changes that have taken place in the market over the last fortnight, there are strong indicators that suggest rents will continue to creep upwards.
The interest-only and other criteria changes bought by Santander, swiftly followed by Lloyds and now Leeds Building Society will impact first-time buyer activity in the market this year. Tightening mortgage criteria can only bring higher hurdles for borrowers, particularly those looking to buy at a higher LTV.
Since Cameron made his claim over “falling” rents, he has failed to provide any evidence to back this up.
For me, it’s a simple case of ‘I’ll believe it when I see it.’
