We examine new research showing PRS rents are substantially lower in ‘Blue Wall’ constituencies and Labour concerns about ‘one-week shortfall’ under Universal Credit.
The PRS and the Blue Wall
The Resolution Foundation has published a report on ‘Blue Wall’ constituencies, those traditionally Labour seats that fell to the Conservatives at the 2019 General Election.
- Private rents in the Blue Wall are lower than they are in both Labour and other Conservative constituencies. In 2018 Blue Wall rents were £316 lower per month compared to the England and Wales average. Nominal rents in the Blue Wall are so much lower than in other areas that rents today in the Blue Wall are equivalent to the average rent across England in 2001.
- The report says that “These lower private rents have a read-across to the Blue Wall’s lower level of internal migration outflows. Previous Resolution Foundation research has shown that faster rents growth in higher-rent areas during the 21st century has acted as a headwind to people moving from lower-rent (lower-productivity) areas to higher-rent ones in search of work.”
It goes on to say: “Before 2010, rents in the Blue Wall, Labour seats and other Conservative areas grew at largely the same rate as the England and Wales average of 3.7 percent. In this period nominal rents increased by over half across the country, from an average of £486 to £745 per month.
“After 2010, however, growth rates in the Blue Wall started to fall behind both Labour and other Conservative constituencies.
“In this period, the Blue Wall grew at a rate of nearly half the England and Wales average. This will reflect the Blue Wall’s relatively weak employment and earnings performance post-crisis…and also much slower population growth in the Blue Wall than elsewhere.”
In respect of the size of the PRS, it notes: “When it comes to private renting, families in the Blue Wall are more similar to other Conservatives seats than Labour ones. In both the Blue Wall and other Conservative areas, around 30 per cent of families were private renters in 2019. Here the Blue Wall differs from Labour seats, where the proportion of private renters is around a third higher.”
Labour MP concerned about rent ‘shortfall’ under Universal Credit
Stephen Kinnock MP (Labour, Aberavon) has received a response to his written question asking what recent steps the DWP has taken to ensure that Universal Credit claimants paying rent weekly do not face a one-week shortfall in their UC housing element in 2020.
The Work and Pensions Minister, Will Quince MP, responded: “Neither tenants or landlords lose a week’s rent in a 53 weekly rent payment year as has been alleged; no year contains 53 weeks.
“The problem is alignment between weekly and monthly cycles. Each month the UC housing element is a constant figure but claimants with weekly tenancy agreements will be required to make either four or five rent payments within this period.
“If the claimant always pays their rent on time, in five payment months they are effectively making payment for part of the following month. That month will always be a four rent-payment month, so the combination of the advance payment and the ‘overpayment’ of housing support during that month will result in the correct amount of housing element being paid.
“Where a landlord charges rent weekly on a Monday, because of the way the calendar falls every five or six years, they will seek 53 rent payments in a year, with the 53rd payment in part covering the tenancy for the first few days of the following year.
“The effect of this is that, over the course of the next housing association rental year, a tenant’s UC payments will accurately reflect their liability, irrespective of the 53 payment weeks.”