The reviews of Islington’s property market confirms that rents in the borough are falling – for private tenants that is.
Under the heading ‘Tenants remain in strong position’, the February Primelocation price index report says that London lettings prices fell for the tenth successive month and were 9.3% (£89.47) lower than this time last year, with Islington, City & Docklands, recording the largest fall (2.5%).
That follows on January’s figures that showed rental values down 1% month-on-month and by 4.9% year-on-year, with Islington, City and Docklands registering the largest fall (-2.3% over the month).
This all leads Andrew Smith from Primelocation to conclude chirpily that tenants, not landlords, “are the real winners in this market”.
But that doesn’t seem to apply to social housing tenants. Under Government rules, councils are supposed to increase social housing rents a certain amount each year. Government subsidy for housing will assume the rent rise: if councils don’t put up the rent, then the tenants will lose out anyway, as the housing budget is ring-fenced. So either rent rises or the budget for repairs, cleaning and security gets slashed. Not much of a choice for councils or tenants.
It gets worse: in ‘rich’ areas like Islington, some of the housing revenue is taken by the Treasury, despite the fact that Islington’s actually one of the most deprived boroughs: not just rent but another national tax, as the Moonlight Robbery campaign points out. And the Government policy wants social housing rents to reflect the local market – so social housing in the least affordable areas will become less affordable.
Lib Dem councillors in boroughs like Islington, Camden and Haringey are proposing to freeze the council tax (Islington sets its budget tonight – watch this space); but the rents are beyond their control.
At a time when everyone is feeling the pinch, you might think the Labour government would think twice about raising the housing costs of council tenants. Not least because through housing benefit, central government ends up picking up the bill for many of them.
But no. Gordon Brown and co are pressing ahead with forcing a 6% rent rise – despite pleas from boroughs across London, including Islington, to think again.