Social rents cuts a greater benefit to the exchequer than to tenants, finds think tank IFS in new report
Slashing social rents will benefit the exchequer more than tenants, research published today by think tank the Institute for Fiscal Studies (IFS) has revealed.
The report, which was funded by Trust for London, found that cutting social rents – the amount charged to social housing tenants – would only increase renters’ total disposable incomes by £0.7bn. But, because the majority of those tenants also receive housing benefit, entitlement to the means-tested benefit will fall by £1.7bn.
Robert Joyce, one of the report’s authors and senior research economist at the IFS, said: “The government had committed to increasing social rents for ten years; but after just one of those ten years, it announced that rents will instead fall for the next four years. This instability could damage the ability of social landlords to plan and finance new house-building.”
A government spokesperson said: “By lowering social rents the government is helping to protect social tenants from rising housing costs, while ensuring fairness for taxpayers.”
Social rents cuts were announced in this July’s Budget.