Renters paying $30 a week more now than a year ago

Renters are spending an average of $30 more on rent each week compared to a year ago, with the National Party blaming Government policies that are hitting landlords.

But Housing and Urban Development Minister Phil Twyford says rents are driven by supply and demand, not landlord costs, and pointed the finger at the previous National Government.

In some regions such as Wellington, figures from the Ministry of Business, Innovation and Employment show that rents have jumped by nearly $50 a week compared to a year ago, meaning tenants are paying close to $2600 more a year in living costs.

The National Party says it is a far greater rate of increase than under the previous Government, when rents rose by an average of $13 a year.

"This Government prides itself on being kind, but these rent rises will really be hurting people, especially at the bottom," leader Simon Bridges said.

When the government changed last year, the mean weekly rent in Auckland was $536. It has now jumped to $555.

But the biggest rent rises are in Wellington, Hawke's Bay, and Manawatu-Whanganui, where rents rose by just under $50 in the last year. In National's nine years in charge, rents rose by an average of between $6 and $10 a year in these spots.

Rents rose at a greater rate in all regions except Northland and Christchurch in the past year compared to when National was in charge.

Bridges blamed a series of Government policies which penalised landlords.

The Government has banned foreign buyers, introduced stricter standards for insulation and heating, got rid of "loss ring fencing" for landlords, and extended the period which investors have to pay tax on resold properties from two years to five years after purchase.

Bridges said the measures had a cumulative effect, forcing landlords to either lift their rents or get out of the rental market - reducing the rental stock.

The rent rises would hurt lower income tenants the most. He noted that the number of hardship grants had risen by 54,000, or 19 per cent, in the past year.

Ministry of Social Development data shows that this increase is mostly due to greater demand for assistance with food.

Housing and Urban Development Minister Phil Twyford said he was concerned about rent increases, but said it was due to inaction by National when they were in power.

"Reserve Bank research shows that rents are driven primarily by supply and demand, not landlord costs. Our Government inherited a dire shortage of housing around the country after the former government ignored the housing crisis."

He noted Government policies to increase housing supply, from KiwiBuild to the goal of 6400 more public houses over the next four years.

"National saying that landlords are selling up is simply scaremongering. Corelogic data shows that landlords purchased 38 per cent of properties in October, which is consistent with the last two years – there has been no change in landlord activity."

The Government has taken some steps to make renting more affordable and secure in the last year.

It changed the law to ban letting fees last month, which are typically around a week's rent - though some landlords have indicated that they will simply pass on the cost to tenants.

Further reforms will limit rent hikes to once a year and ban bidding on rental properties.

Asked whether he would scrap any of the Government's policies, Bridges said the ban on foreign purchases of old homes would be reversed.

National would "run the ruler" over the remaining policies and consider further repeals, he said.