Rents fall in real terms, again

Once again, that boring little thing called evidence undermines the standard political rhetoric which infuses housing policy. Yes, house prices are going up. But rents? They’re continuing to fall in real terms as last week’s latest figures show:

Private rental prices paid by tenants in Great Britain rose by 1.0% in the 12 months to September 2014.

And what was inflation in the year to September?

The Consumer Prices Index – which measures changes in the prices of goods and services purchased by households, has increased by 1.2% in the year to September 2014.

This is not a one-off fluke, but part of a consistent long-term trend: rents are flat or falling in real terms.

Of course, there are some areas where the rise in rents is higher – but remember (a) that it also means there are others which are below the average*, and (b) even in London, the area most typically cited as being different, the figures aren’t that different. London’s rents went up 1.5% in the last year – higher than inflation but only by a slim margin.

With rents falling in real terms yet purchase prices for homes rising sharply, you’d have thought part of the answer to Britain’s housing market problems is to rebalance between the bit where prices are falling and the bit where prices are rising.

Yet that almost never gets mentioned – nor does the large long-term fall in average household size. At least the rental market gets occasional mentions in housing policy, but trying to encourage an increase in average household size? Hunt hard to find any mention outside the bungled, and done for other reasons, spare bedroom subsidy.

That’s why I continue to be deeply sceptical about the housing policies offered by all parties, including the Liberal Democrats.

* Sounds obvious, but once you start spotting the pattern you’ll see the media misses this all the time. Report starts with average figure. Then says some areas are much worse than the average. Then goes on to only talk about those place which the story has just told you aren’t typical but are the outliers.

Take the evidence, discard it by picking out the outliers in one direction only, and then distort the story by only talking about those extremes on one side of the average: evidence, discard, distort is a remorseless threesome that plagues all sorts of media reporting which is apparently fact-based but actually abandons the evidence almost as soon as it is presented.