MQT on 2013-03-20
Session date: 
March 20, 2013
Question By: 
Nicky Gavron
Labour Group
Asked Of: 
The Mayor


Has reform of Local Housing Allowance led to a reduction in private sector rents?


Answer for Rents

Answer for Rents

Answered By: 
The Mayor

Boris Johnson (Mayor of London): Again we do not have data for the rents of private renters on Housing Benefit, but according to the interim results from the DWP's independent evaluation of the LHA changes, around one in ten landlords had reduced their rents as a result of the reforms. That is all I have to go on so far and we will have to wait and see what further data comes out.

Nicky Gavron (AM): Yes. Thank you for that. Lord Freud [Welfare Minister], Iain Duncan Smith [MP, Secretary of State for Work and Pensions], [David] Cameron [Prime Minister] and yourself all said, and have consistently said, that in fact the LHA and the Housing Benefit caps would bring rents down. As you have all been saying it at the top of the Tory Party and it has not happened, except in a very few isolated cases, can we conclude that this is a Tory myth?

Boris Johnson (Mayor of London): I can only refer you to what I have just said; one in ten landlords had reduced; that is 10% had reduced their rents as a result of the reforms. If you were being fair you would have to concede that we have huge pressures on housing stock in London. People are finding it very difficult to get mortgages, with the result that many people are moving into the private rented sector because they cannot buy homes in the way that you or I could, Nicky, when we faced that challenge. That is simply impossible for millions of people in this city and that is why I repeat what I said earlier that the goal must now be to help hard-working families to get a stake in the equity of their home. I think what Darren [Johnson AM] had to say was completely right, why should a share in the London property market be something that is reserved to plutocrats from around the world or people who are now middle-aged and older. This should be something that we help families across London to achieve.

Nicky Gavron (AM): Can I just go on, I think everyone, except of course for the Tory Party, was actually sure that rents would not go down.

Boris Johnson (Mayor of London): I am sorry, you do not seem to be listening to what I have just said.

Nicky Gavron (AM): What we did not realise, you might be interested in this, we did not realise that rents would increase more for families on low incomes and increase more than for any other income group. We now know, in fact there were new figures yesterday, that there is a 10% increase if you are on a very low income, and yesterday Barnet was cited finding a 43% increase. So I think what I want to ask you is, that even in your terms, welfare reform is not doing what it said it was going to do on the tin, is it?

Boris Johnson (Mayor of London): Again, I do not want to accuse you of failing to hear what I have just said, but I repeat that one in ten landlords had reduced their rents as a result of the reforms, according to the DWP's independent evaluation of the changes. Maybe they are lying, but I can only tell you what and that seems to me to be beneficial. What is also happening of course is that, as a result of the changes, we are able to bear down on a benefit that was costing lots of taxpayers on low incomes huge sums and I think seemed to many people to be unfair, and that is also a benefit of the reforms. This is not something that has been easy to do but, just to remind you, it was a policy that was supported by your party.

Nicky Gavron (AM): Yes, just that that is not my line of questioning, but that benefit bill is rising and we must not forget that. I just wanted to go on on this thing. What we did not realise, and there is massive evidence now for this, is what we are hearing now from the National Landlords Association. That more than 50% of their members are not going to take benefit claimants and the DWP has done research saying that 40% of landlords are not going to take benefit claimants. We just heard from Crisis that in Lewisham, if you are young, under 35, in Lewisham and you want to share a flat, then of the flats that are affordable only 7% will be available. So, it is a new situation. Do you think it is actually fair that if you are in need, if you are on low pay in Lewisham, and you need Housing Benefit to help you out, that you should not only almost certainly lose your home, because the rent will be put up, but that you cannot find another because they are not available to you because you are on benefits?

Boris Johnson (Mayor of London): As I say, the objective is to increase the supply for people across all income groups and that is the single best solution and that is what we have done over the last four years and that is what we are going to continue to do, in Lewisham and elsewhere. If you impose rent controls or some other solution of a kind that I think you would like to introduce in London, all that would happen is that you would constrict supply. You would stop people investing in housing, and they are thinking of getting rid of it in New York. That would be completely against the interests of the poorest people in society. What we have to do is build more homes for social rent and more homes for people on low incomes.

Nicky Gavron (AM): When the Government talked about reducing rents, they did not talk about supply, they just said the line was, this was going to reduce rents, and I think you and the Government have been stringing us along all the time. First you said the impact was exaggerated, and I do not know how huge 'huge' is for you, in terms of numbers. Then you said you would get mitigation, and you got a little bit, but it is tokenistic. Now you say that it is reasonable and it is a natural consequence that people should have to move out of London. I think that there are things you should be doing. You should have asked, as Labour asked nationally, as Labour around this Chamber asked, for a regional variation to the cap. You should ask for a comprehensive impact assessment. You should be doing something about the private rented sector. You are doing nothing.

Boris Johnson (Mayor of London): On the contrary, we have done a huge amount. We have done more than you lot ever did, and I think that you are back again in the same old groove of the record that got stuck four years ago. We have delivered more affordable homes than you ever expected us to do. We have continued, in spite of the massive financial crisis engineered by the Labour Party in the middle years of the last decade, to deliver more homes for Londoners of all incomes. And, as has been made abundantly clear this afternoon, we have the policies that will continue to get housing moving in London. What would be absolute retrograde would be to bleat away about rent controls, which would achieve absolutely nothing except to stifle that sector, or now hypocritically to say that you oppose a benefit reform that in fact your party supported. I think it is absolute nonsense, but I have found over the last four or five years that the best thing to do when listening to criticism from you, Nicky, on the building of affordable homes in London is to take it with a pinch of salt. Our record speaks for itself.

Jennette Arnold OBE (Chair): Assembly Member Gavron, have you finished your questioning?

Nicky Gavron (AM): Yes, I have.