The National Party says it will consider raising welfare benefits to help state house tenants cope with market rents in what landlords say will be a rising rental market.
National finance spokesman John Key said yesterday that no one should end up with less cash in the hand than they have now under National's policy of market rents combined with an accommodation supplement to their benefits.
The policy would raise the average rent of a three-bedroom state house from $100.95 a week to $127.81 a week for a couple on the unemployment benefit with children after allowing for the current accommodation supplement - apparently equivalent to a benefit cut of $27 a week.
Auckland Property Investors Association president Andrew King said the policy would have little effect on the general rental market because rents were likely to rise in the next few years anyway.
Rents were pushed up across the board when the last National Government in the 1990s put state house tenants on market rents and introduced the accommodation supplement.
Mr King said the effect would be minimal this time because the Labour Government had kept the accommodation supplement for private sector renters, and because of National's plans to leave existing state tenants on income-related rents.
But he said rents had fallen far behind house prices. Median rents for three-bedroom houses had risen on a national basis by only 19 per cent in the past three years, from $235 to $280 a week, while median house prices rose by 52 per cent, from $185,000 to $282,000.
'I think there will be a catch-up with rents,' he said.
(Abridged)
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