Wednesday, 9 April 2014

NORTH WEST PRIVATE SECTOR HOUSING BENEFIT CLAIMS UP 53.8 % FROM 2008 TO 2013 AS PUBLIC FUNDS TO LANDLORDS SOAR FUELLING “BUY TO LET” EMPIRES

NORTH WEST PRIVATE SECTOR HOUSING BENEFIT CLAIMS UP 53.8 % FROM 2008 TO 2013 AS PUBLIC FUNDS TO LANDLORDS SOAR FUELLING "BUY TO LET" EMPIRES

The recession did not hit "buy to let" landlords now renting out a million more properties than in 2008 and it is far cheaper to build social houses for rent to stop £9 billion a year lining the pockets of the already wealthy says GMB

In the North West in November 2008 there were 142,751 private sector housing benefit claimants costing the Exchequer £1,735.2 million. By November 2013 this number had increased by 53.8% to 219,536 and costs had increased to £2,654.2m. The additional costs were £918.9m.

The numbers of private sector claimants in Preston grew 100.1% in the same period. Next was Wigan up 95.3%, followed by Manchester 93.3%, South Ribble 90.3%, Salford 88.7%, Warrington 81.8%, Carlisle 78.5%, Bury 76.5%, Bolton 72.8% and Stockport 72.6%. Set out in the table below are the figures for all 39 local councils in the region ranked by the % increase in the numbers claiming housing benefits.


In Great Britain in November 2008 there were 1,054,810 private sector housing benefit claimants costing the Exchequer £15,731.8 million. By November 2013 this number had increased by 56% to 1,645,504 and costs had increased to £23,900.4m. The additional costs were £8,168.6m.

Overall the number of private rented households in England grew from 2,982,000 in 2008 to 3, 956,000 in 2012/13. See notes to editor 5 on trends in tenure in England 1980 to 2012-13.

These figures are from a new analysis by GMB of housing benefit claimants in the private rented sector for November 2008 and 2013. See notes to editors for sources and definitions.

In Feb GMB published details of the top twenty company landlords in each of the 39 councils in North West that receive housing benefit direct from councils for tenants renting their properties. See notes to editors 6 for some firms receiving large sums in housing benefit in North West. Details, where disclosed, for the top twenty landlords ranked by the amounts they received by council are set out in the pdf attached to national release on GMB website www.gmb.org.uk and for all 39 Councils in North West and for all councils in Great Britain.

Last year GMB established that of 15,874 dwellings in council blocks in Wandsworth where tenants acquired the leasehold under 1980s "right to buy" legislation some 6,180 dwellings are now owned by private landlords who rent them to private tenants. That is nearly 40% of the total sold by the council. There are 977 private landlords who own more than one of these 6,180 dwellings. One private landlord owns 93, another owns 32, another 15 landlords each own 10 or more and a further 83 landlords each own between 5 and 9 of these dwellings.

FIGURES FOR ALL LOCAL COUNCILS IN THE REGION RANKED BY THE % INCREASE IN NUMBERS CLAIMING HOUSING BENEFITS 2008 to 2012/13
Housing Benefit Claimants in the private rented sector November 2008Housing Benefit Claimants in the private rented sector November 2013% change in Housing Benefit Claimants in the private rented sectorHousing Benefit Expenditure 2012/13  (£ million, nominal terms)2007/8 - 2012/13 Change in Housing Benefit Expenditure  (£ million, nominal terms)
Great Britain1,054,8101,645,50456.023,900.48,168.6
England938,1831,462,43955.921,120.17,340.1
North West142,751219,53653.82,654.2918.9
rank
1Preston1,8713,744100.146.916.9
2Wigan4,4528,69495.3100.637.4
3Manchester9,40618,17893.3276.189.7
4South Ribble9151,74190.322.58.2
5Salford4,0507,64288.7127.447.7
6Warrington2,0923,80481.856.521.1
7Carlisle1,2782,28178.530.910.2
8Bury2,8375,00676.555.919.5
9Bolton4,4087,61772.899.236.8
10Stockport3,4876,02072.678.633.1
11Trafford2,1593,72472.565.324.6
12Oldham3,7516,44271.781.929.4
13Chorley1,1591,94167.525.511.0
14Eden45975764.99.72.6
15Cheshire West & Chester4,1896,66359.195.936.7
16Cheshire East4,1236,53458.585.933.7
17Rochdale4,1796,61858.485.829.0
18Halton1,9903,14958.255.118.1
19Knowsley2,9924,73458.277.022.1
20Wyre2,8184,34954.331.313.0
21Tameside4,2196,45252.990.932.8
22West Lancashire1,5032,21547.430.09.9
23Lancaster3,7685,42744.042.216.2
24Rossendale1,3661,96243.620.26.6
25Ribble Valley57482243.27.52.8
26Wirral10,36114,70942.0137.344.7
27Fylde2,0732,93641.619.98.4
28Liverpool14,92721,09541.3283.393.1
29Sefton7,64610,78041.0107.540.4
30St. Helens3,0354,22339.175.024.1
31Hyndburn2,8213,88937.929.610.5
32Blackburn with Darwen3,5564,83536.058.115.8
33Blackpool11,07215,03735.892.126.5
34Burnley3,5864,80233.936.210.8
35Copeland8481,09729.421.16.2
36Pendle2,9843,79427.127.59.0
37Barrow-in-Furness2,2182,70522.020.95.5
38South Lakeland1,4271,65816.219.36.8
39Allerdale2,1631,476-31.827.48.2

Paul Mc Carthy, GMB Regional Secretary, said "The 2008 recession did not hit "buy to let" landlords now renting out a million more properties than in 2008. This growth in "buy to let" empires is taxpayer funded by this massive increase in housing benefits. 

Mrs Thatcher's Government changed the labour movement traditional policy of spending money on bricks to spending the money on rents. Labour's John Burns 1907 law to allow councils to build houses for rent was also reversed then.

Since then, £411 billion of public funds has been spent on rents. It would be far cheaper to build social houses for rent and stop at least £9 billion a year lining the pockets of the already wealthy.
GMB consider that this was a serious policy mistake and the cost to the public purse is now becoming apparent.

GMB want to see this public money fueling "buy to let" empires replaced with a system directly benefiting those in need of social housing. 
GMB is aiming to secure a fundamental change in policy on funding social housing. This is not a new stance by the union. We want private sector middlemen cut out of public housing provision.
GMB is also seriously concerned about the money spent on rents, rather than bricks and mortar, is fuelling the growth in inequality in our society."

End
Contact Neil Smith 07740 804063 or Terry Mellor 07970 410905 or Giovanna Holt 07740 804058 or Graham McDermott 07974 018404  Kamaljeet Jandu 07956 237178 or Gary Doolan 07852 182358 or Cath Speight 07505 711925 or Lisa Johnson 07900 392228 or GMB press office 09921 289880
Notes to Editors:
1.     Housing Benefit Claimants in the Private Rented Sector for November 2008 and 2013 available from Department for Work & Pensions Stat-Xplore database (https://stat-xplore.dwp.gov.uk/). Cells in the table have been randomly adjusted to avoid the release of confidential data. Crown Copyright Reserved.
2.     Claimants are as at the second Thursday of the month.
3.     Housing Benefit Expenditure data for 2007/08 and 2012/13 available from Department for Work & Pensions Benefit expenditure and caseload tables 2013 (https://www.gov.uk/government/publications/benefit-expenditure-and-caseload-tables-2013). Source: DWP Statistical and Accounting data. The figures show Expenditure in £ million on Housing Benefit in nominal terms, reflecting the current situation in 2007/08 and 2012/13 and not taking inflation into account.
4.     The change in the Retail Prices Index between April 2008 and April 2013 is 16.6%
5.     Underlying Data on Trends in tenure in England 1980 to 2012-13

Underlying Data on Trends in tenure in England 1980 to 2012-13
owner occupiersprivate renterssocial renters
million households
19809.6802.0435.378
19819.8601.9105.460
198210.2371.9135.317
198310.6131.9175.173
198410.9901.9205.030
198511.3051.8664.949
198611.6191.8114.868
198711.9341.7574.787
198812.2481.7024.706
198912.5151.7434.616
199012.7821.7834.526
199113.0501.8244.436
199213.0691.7244.371
199313.2801.8334.317
199413.4291.8694.257
199513.4671.9394.245
199613.5221.9954.218
199713.6292.0784.170
199813.8172.0634.148
199914.0912.0004.072
200014.3402.0283.953
200114.3592.0613.983
200214.5592.1313.972
200314.7012.2343.804
200414.6782.2833.797
200514.7912.4453.696
200614.7912.5653.737
200714.7332.6913.755
200814.6282.9823.797
2008-0914.6213.0673.842
2009-1014.5253.3553.675
2010-1114.4503.6173.826
2011-1214.3883.8433.808
2012-1314.3373.9563.684

Note 6
Some firms receiving large sums in housing benefit in North West are as follows:
  • European Wellcare Lifestyles Ltd - £710,000 from Liverpool. Part of European Care Group. Parent company Esquire Group Investment (Holdings) Ltd based in the British Virgin Islands as are another 5 companies within the group. 4 other group companies are based in Guernsey.
  • Stockton Flats - Over £1.7m in total from councils in North East, North West and North Yorkshire. £618,000 from Blackpool.
  • Grainger Residential Management / PHA Ltd / Grip Nomco 1 & 2 - £1.2m across 16 districts. Part of Grainger PLC with fixed assets of £618m, current assets of £1bn and turnover of £283m. In 2013 own 13,353 units with a market value of £1.8bn. They manage 8,216 units with market value of £953m. £316,000 from Liverpool, £36,000 from Stockport
  • Associated Property Owners Ltd – £89,000 from Bury. Directors are Lady Diana Errington, Robin Errington, Anne Errington, David Errington, Stuart Errington and William Saville. Directors of the parent company, Associated Property Holdings Ltd, include Sir Geoffrey Errington (2nd Baronet Errington, of Ness). Son of Sir Eric Errington, conservative MP from 1935-1945 (Bootle), 1954-1970 (Aldershot).
  • Tame Estates - £225,000 from Tameside and £106,000 from Oldham
  • Perth Estates - £68,000 from Tameside. One of the directors, David McDonald, stood as a conservative candidate for the Failsworth East ward in Oldham in the 2010 local elections.
  • Sutton Estates Ltd - £1.36m from Liverpool
  • Rehman Property Consultants - £915,000 from Burnley
  • Madina Property Services Ltd - £807,000 from Manchester
  • Kaye McKensie Property Management - £645,000 from Manchester
  • Valley Estates - £357,000 from Rochdale
  • Northwood - National lettings Agency getting over £2.3m nationally. £151,000 from Cheshire West and Chester, £54,000 from Carlisle, £83,000 from Lancaster, £105,000 from Manchester and £135,000 from Cheshire East.