Are landlords greedy like Labour says? (Greedy Landlords part 1)

 Angela Rayner has attacked "greedy landlords" because the tax payer is forecast to be paying private landlords £13Bn in housing benefit by 2028.

The amount paid to landlords in 2019-2020 was £9.9Bn and rose to £12.1Bn in 2022-23.

However the number of claimants has increased.  In 2019-20, the number of Housing Benefit claimants was 1.5m and has risen to 1.8m in 2022-23

So let's divide the spend by the number of claimants:

2019    £6,600 per claimant

2022    £6,722 per claimant

So these "greedy landlords" are getting and additional £122 per year for each claimant.

If I plug £6000 into the Bank of England inflation calculator, it would be £7,449 in 2022.  So rent payments per claimant have not increased in line with inflation - they have dramatically fallen behind by £727!  So it looks like the "greedy landlords" are not as greedy as the narrative that Labour wants you to believe.

The real message from this data is not Landlords but the Benefit Britain culture.  The 20% jump in the number of claimants in a 3 year period is the problem.

In part the jump could be attributed to lock-down and furlough payments.  With the government paying for people to stay at home and not work - it created an idleness culture. This is reflected in the massive increase in people that are economically inactive and "unable" to work.  Some may genuinely be ill however the Pareto principle suggests that 20% of these new inactive will be genuinely unable to work and the 80% are choosing not to work - the lockdown trial run of being lazy sold them on the idea to do it full-time.

For many, the cost of living crisis will also be a factor that has driven the increase in claimants.  Large numbers of unskilled low paid immigrant labour moving to the UK will also be factor in driving up the number of claimants.  Effectively tax payers are subsidising companies using low paid workers.

It seems unlikely Labour will be able to do anything to stem the increase or indeed cap this number of claimants.

Given Labour seem invigorated to increase the war on landlords that the conservatives started, it is likely that more landlords will sell up (like I am) or  increase rents to compensate for the taxes and hostile regime.  Ultimately that will reduce the supply of privately rented properties and drive up rents. Labour cant magic council houses out of thin air so it seems highly likely that landlords will raise rents.  

Expect this problem to get worse.  If you call landlords "Greedy" then they may have to be.

Read part 2



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