Tuesday, 8 May 2012

We Need To Talk About Housing Benefit

Judging by headlines in the right wing press, you’d think Housing Benefit claimants are so carefree and loaded that they set flaming tenners loose in the wind – just to see them fly! Such misinformation means we need to have a conversation. We need to talk about Housing Benefit: what it is, who it’s for and where it really goes.

Yes, we do. Housing Benefit has been cut (no – not ‘capped’ it’s actually a cut in disguise) and undermined by the new accepted dictum that claimants are scroungers, when they are you, me, and everyone you know. HB claimants are more often than not in part time work. Official government stats support the view that it keeps people with precarious lives and few options in housing.

But let’s look at what this is again. We have created a system where rents are so ridiculously and unsustainably high, that they need state subsidy for tenants to afford them. Most claimants are employed. This again raises the spectre of low wages, which in turn means that the state is propping up the profits of companies who are cynically raking in profits while paying low wages (the minimum wage, and even the so-called living wage are both too low for long term survival, to rent, let alone buy a home.)

I have little sympathy for profiteering buy-to-let landlords who are cranking up the rent when interest rates are still so low. Yes, mortgages are hard to come by, but as I have said many times before: profit was once, and should be again, made by accruing equity long-term rather than screwing and squeezing renters, who must beg the state for help.

This is the problem with the housing Benefit issue: the money goes not to claimants, but to bail out and landlords. The money is paid to the person who owns the place and rents it out. They charge what they want, and where demand is high and supply low, they even accept sealed bids on rented properties; the highest bidder wins.

We really need are rent caps, powerful rent officers, and more social housing. All are achievable. It’s funny isn’t: bailing out banks was never seen as state aid to ‘spongers’ (well, not by the scroungers themselves) but an entire section of society is victim to unregulated rent rises. Instead of rent caps, ministers limit the amount paid to claimants. This makes no sense at all.

This is true cruelty: housing benefit cuts reverse the binoculars and place the problem of that escalating benefits bills not on landlord greed, pension concerns, or even (shhh…) capitalism’s nastier inevitabilities, but on the poor blighters living in hovels where rents are being ramped up every six months due to lack of supply in some places, and elsewhere pure blinding greed.

I’ve been saying this for ages, and I’m getting the feeling nobody is listening, and that nobody in power (Condems are Labour) care about the stinking, fetid, despicable stench of a mess that is the private rental sector.


Gimme Shelter said...

Spot on, Renter Girl. Thank you for addressing this important issue and naming one of the many rampaging 'white elephants' in the ConDem's version of events.

The vilifying of people who receive Housing Benefit is a scandal. As you say, this government is making the rich richer, and the poor homeless. If we realised that homelessness has increased by 25% over the last year alone, and yet 88% of the cuts are still to come, then people would be doing something other than just sitting on their hands, complaining. People's pain and misery is already too great, and yet we've only had 12% of the cuts.

It's these fundamental truths that need to be named and then actively challenged.

I look forward to reading your next entry - you're naming things as they are, not as Cameron & the ConDems or the establishment-inclined press would like them to be represented: as you say, for them anything that's state-funded is being depicted as a waste of money - that could otherwise line the pockets of the hedge fund managers and large private corporations that back Cameron. The same companies the ConDems are inviting in to privatise the NHS and our public sector as a whole.

These cuts are a human rights issue. There is no mandate for them. People are already suffering huge distress, and many are facing destitution.

It's time for another national TUC demo.

We should watch what Francois Hollande does in France very closely, because all of a sudden there's a legitimate challenge from an important EU leader that there IS an alternative to Posh Dave's lies.

RenterGirl said...

It's time frankly, for Labour to stop banging on about the 'squeezed middle' and 'hard-working families' and focus on the vulnerable and dispossessed. And everyone must stop demonising claimants. Thanks for reading.

Anthony H said...

Rents are unquestionably too high and more investment in affordable housing is definitely required.

However, I don't think the housing benefit cap is unjust. I live in central London (zone 1) with my girlfriend in a 1 bedroom flat and pay rent which is only slightly more than the £250 cap. It would not be an issue finding a place within this cap in a perfectly good area with great transport links. It seems that the cap hasn't been set at a unreasonably low level.

Hopefully this cap will also lead to lower rents as the market floor will be lower.

RenterGirl said...

Well done. Now find somewhere when you are a claimant, don't have a guarantor, can't pay up to 6 months in advance. Just because you found somewhere, doesn't mean everyone is so lucky. The cap won't reduce rents. They are rising due to greed.

Anthony H said...

I accept that without a job and funds for a deposit and up-front rent it must be difficult.

Landlords are clearly incentivised to achieve the highest possible rent. But if a huge chunk of the market (state funded HB tenants) are unable to pay as much, landlords will have to cut rents or face void periods.

This, of course, assumes that privately funded tenants will be unable to take up the slack - but given the state of personal finances right now this seems like a reasonable assumption.

Only time will tell.

space cadet said...

And a 1bedroom flat is only ever meant for 2 people, really.

RenterGirl said...

It used to be that rent took up 25% of income. That is now 75% in London. It's unsustainable. And I'll sya it again: many claimnts are working: the problem is rocketing rents and declining wages.

MattW said...

Great blog, RenterGirl.

If private rents were more affordable, ie: the same or maybe just a bit higher than social housing rents, then Housing Benefit may not be necessary.

I'm not ashamed to say that I claim Housing Benefit on my private rental flat (maybe not for much longer as my new job pays considerably more than the former). I only claim it as I consider the rent to be expensive for what is a modest flat.

Dazzla said...

@Anthony H

"Landlords are clearly incentivised to achieve the highest possible rent. But if a huge chunk of the market (state funded HB tenants) are unable to pay as much, landlords will have to cut rents or face void periods. "

There is always a lag between the causes and the effects of supply and demand on prices, and in housing, it's particularly slow. While tenants are waiting for these magic market mechanisms to take effect, they'll live where, exactly? Do we have to wait for the repossession orders to arrive?

Free-market fundamentalism has been discredited. It's time for an alternative.

The Frig said...

Hi Renter Girl. Great piece. Covered similar ground on my site - but my focus was squarely on former right-to-buy properties.

The long-term effects of right to buy

I am trying to do a follow-up piece following a FOI request, but unfortunately, doesn't apply to private individuals. Data Protection trumps it.

Does make me wonder how we are ever going to get an idea of the scale of this problem.