HC Deb 30 January 1991 vol 184 cc938-40
15. Mr. Corbyn

To ask the Secretary of State for the Environment what is his estimate of the average increase in housing association rents in the London and south-east region during 1990–91.

Sir George Young

Information on rents is not available in this form. Most housing association tenants pay fair rents, which are subject to re-registration every two years. Increases for housing association tenancies re-registered in London and the rest of the south-east during the second quarter of 1990 were 21 and 23 per cent. respectively, over two years.

Mr. Corbyn

Does the Minister agree that those rent increases are absolutely disgraceful for the many poor families who live in that accommodation? The Government's inability to provide sufficient funds to the Housing Corporation to support housing associations' new-build programmes has forced them to borrow money from the private sector, through the banking system. Therefore, they have to pay enormous interest rates. That is one factor which has forced up housing association rents, together with the Government's general trend towards deregulation.

Does the Minister accept that the problem of homelessness can be resolved only when we have sufficient affordable housing for rent? Only that will end the scandal of homelessness in London and the south-east.

Sir George Young

I cannot accept what the hon. Gentleman said at the beginning of his question. The increase in rents was about the same as the increase in average earnings—average earnings went up 22 per cent. over two years as against rent increases of 21 and 23 per cent. For those not earning, housing benefit will bear the brunt of the increase. Such people are shielded against the increases about which we are speaking.

In the new regime under which housing associations operate they are registered charities and they are required to set rents within reach of people in low-paid employment. Although the new rents may be higher than fair rents, they enable the housing association movement to sustain a much bigger programme of new homes, for which the hon. Gentleman was calling at the end of his question.

Mr. Soley

Tenants of housing associations, councils and the private sector face a disgraceful position. Did not rents in the housing association sector go up by about 25 per cent. the other year? Is not it also true that council rents will go up dramatically in the next couple of weeks and that private sector rents are out of the reach of many people? In those three examples housing benefit does not meet the needs of many people, particularly pensioners with small occupational pensions. What will the Government do about rents that are increasingly unaffordable in a rented sector has suffered a collapse, with the loss of 1.5 million properties in the past 10 years? There must be an answer that produces affordable rents in affordable properties.

Sir George Young

I do not accept the premise on which the hon. Gentleman based his question. Housing benefit will underpin market rents—we have made that absolutely clear. If people cannot afford to pay that market rent, housing benefit will take the strain. It is not true that fair rents have increased faster than earnings—they have increased broadly in line. Over two years there has been a 22 per cent. increase in fair rents and, in London, there has been a 21 per cent. increase in earnings. Therefore, it is not true that rents are rising faster than average earnings.

I repeat that the housing benefit system exists to enable people to pay their rent. There can be no question of people losing their homes because they cannot afford to pay reasonable rents.