18 Apr 2012
When you’re told your rent increase is not a rent increase
People can be deeply distrustful of statistics, especially when they are out of kilter with their own experiences and perceptions. It’s no surprise, then, that blogs such as FactCheck and FullFact are increasingly vital parts of the political debate.
When it’s on your own patch, a questionable stat grabs you right away. In my case it was when the Prime Minister stated at PMQs that private rents are going down. There was a collective ‘huh?’ in the office – this didn’t tally with statistics we were seeing, or reports from our advisers who’d dealt with a 78% surge in problems relating to ‘unaffordable rent increases’ in the last year.
Initially the government cited LSL’s rental index as the source. But, as FullFact pointed out, these figures referred to a non-seasonally adjusted one month dip in rents. Yet, the same data showed rents across England and Wales going up by 4% in 2011, and by 5.6% in London. LSL’s data is based on a sample of 18,000 private rents.
Later Housing Minister Grant Shapps stated that the fall was in ‘real terms’ and was reflected in the latest English Housing Survey. In that report, using data collected from 2,470 private renting households between April 2010 – March 2011 (therefore, potentially as long as 2 years ago), the median private rent was found to be £137 a week, compared to the previous year’s £133. That represents an annual increase of 3%, which is lower than the 4.5% RPI inflation to April 2011. Strictly speaking, this does show rents falling in ‘real terms’, but more than a year ago.
Shelter’s RentWatch reports use VOA data, derived from a sample of over 500,000 rents in England, including over 60,000 in London. Our London report found that rents increased above RPI inflation, and particularly above wage inflation – for outer Londoners, rent inflation was three times as high as wage inflation.
Channel 4 research found that a third of private renting households would be unable to sustain a rent increase of more than £50 a month.
What does this all mean? Well, although there are myriad ways of selecting data to suit your story, there is strong evidence that rents are rising above inflation.
But however you measure them, rent levels are only part of the story – what really matters is how far your wages go once the rent’s been paid. Even if your rent only increases by 3%, to say that it’s not an increase in ‘real terms’ may seem quite glib if that’s an extra £30 a week you have to find from a pay packet that’s barely rising at all.