Economic Mugs

[@contradevian]

And what did humans live in for the 99.99% of history before social housing was invented?

And the only reason private housing and rents are unaffordable is because of

GOVERNMENT SUBSIDIES

We have had social housing since alms houses back in 11th and 12th century (I think).

Because pirate enterprise is unable to supply at a price affordable by a significant percentage of the population. As such the state intervened with mass social housing projects after the war for "returning heroes" who left to the market and private landlords would have ended up housed in slums probably sparking a revolt.

The only issue with RTB is that the money wasn't used to replenish the stock. I think the suggestion that social housing be used as a counter cyclical tool is excellent.

[Game_Over]

yes it does to a social group. one less sociable accessible house.

No it doesn't

Person lives in a council house and pays rent for 20 years

Person buys house and pays mortgage for 20 years

Net effect on supply of housing = Nil

Person buys council house and sells it for BTL

Another person rents house off BTL landlord with rent paid by housing benefit

Net effect on supply of housing = Nil

Whether a house is owned by the council or by a private landlord has NO EFFECT on the supply of housing.

[Game_Over]

We have had social housing since alms houses back in 11th and 12th century (I think).

Because pirate enterprise is unable to supply at a price affordable by a significant percentage of the population. As such the state intervened with mass social housing projects after the war for "returning heroes" who left to the market and private landlords would have ended up housed in slums probably sparking a revolt.

The only issue with RTB is that the money wasn't used to replenish the stock. I think the suggestion that social housing be used as a counter cyclical tool is excellent.

Alms houses are privately owned and administered - absolutely nothing to do with the state

They are an example of private enterprise meeting a social need

And the only reason private enterprise cannot supply plentiful, cheap housing is because of state regulation and subsidies.

[DeepLurker]

And what do the 'few' do with all this money?

They can only either spend or invest it

Which is all the Government does with taxes

Having a few rich people in an economy does not alter the amount of wealth in an economy

In fact all the historical evidence shows that poor people in economy's that have got rid of the 'rich' are considerably poorer than those that have encouraged people to generate wealth

Zimbabwe and North Korea being the latest examples - which you could contrast with pre Socialist Zimbabwe and South Korea

West Germany / East Germany is another recent example.

Mmm, Zimbabwe did not get rid of the 'rich', they just swapped in a new set of 'rich' (aka Mugabe's mates).

Same argument for all the other countries that you have named.

[@contradevian]

Alms houses are privately owned and administered - absolutely nothing to do with the state

They are an example of private enterprise meeting a social need

And the only reason private enterprise cannot supply plentiful, cheap housing is because of state regulation and subsidies.

I think we are all getting a bit tired of the "blame everything on the state" argument to cover up the failings of the private sector. I mean just look at the deregulated banking sector. Oh sorry thats the fault of the BoE and the state! How foolish of me! Fred the Shred had no say whatsoever.

The problem is the private sector aggressively lobbies for these subsidies and bail outs you dislike. When I see businessmen refusing to trouser huge amounts of government loot I'll take the argument more seriously.

And as for alms houses well yes there was no state then (well derr). There is no reason then why wealthy citizens couldnt build private estates for rent at an affordable rent on a secure tenancy, but this isn"t happening. Everything has to be run through the damn bank oligarchs in order to get basic "security of tenure."

[MrPin]

Surely most of the most desirable ex-council houses will have already been sold!

If this is a bribe to buy a leasehold in a cardboard and concrete block, with obscene maintenance charges, it will fail!

[zugzwang]

Surely most of the most desirable ex-council houses will have already been sold!

If this is a bribe to buy a leasehold in a cardboard and concrete block, with obscene maintenance charges, it will fail!

+1

Happily, that's the most likely outcome. Even with the discount the number of social houses lost to the private sector will be quite modest.

Cameron's stated belief that this will 're-start' the housing market should be frustrated by affordability - as has every other quack nostrum the Eton Trifle has embraced in pursuit of the same mistaken ambition.

"I want many more people to achieve the dream of home ownership. In the 1980s, Right to Buy helped millions of people living in council housing achieve their aspiration of owning their own home."

"This vital rung on the property ladder was all but removed. This government is now putting it back..."

[tinker]

Cameron has turned out to be such a tosser. Hard to find anything remotely endearing in any of them, and the ridiculous not in the real world things they come out with.

They will however continue to try to reheat the soufflé.

[24gray24]

What government regulations? Do you mean building regulations?

I hope not. They're about the only thing that makes jerry builders put some insulation and double glazing in. As it is, the walls are made of cardboard.

[Vagabond]

My current rent is 90 a week and will be 120 in around 2016, after that rents will go up by the inflation rate +1/2%. No rent means we have one less thing to worry about, that's all.

We have more than enough cash in the bank....why wouldn't we buy?

OOI why would you buy?

Your current rent is about 4680 GBP/year. Asuming the average house price, you would need 85,000 GBP to buy outright as it stands. If you can get 5% return on your money, then its pretty much cost free to live there and the council have to worry about any large maintenance costs.

As its council, you can pretty much decorate how you like, have pets etc and your tenancy is secured. The only reason I can see someone in that situation being a lot better off by buying is if house prices or rents were to rocket, neither of which look likely.

Obviously the sums will change massively depending on the house in question, but the fact remains if you think house prices will keep falling relative to GBP, why would you jump in now no matter what discount you get? Its not like its a limited offer..

[council dweller]

OOI why would you buy?

Your current rent is about 4680 GBP/year. Asuming the average house price, you would need 85,000 GBP to buy outright as it stands. If you can get 5% return on your money, then its pretty much cost free to live there and the council have to worry about any large maintenance costs.

As its council, you can pretty much decorate how you like, have pets etc and your tenancy is secured. The only reason I can see someone in that situation being a lot better off by buying is if house prices or rents were to rocket, neither of which look likely.

Obviously the sums will change massively depending on the house in question, but the fact remains if you think house prices will keep falling relative to GBP, why would you jump in now no matter what discount you get? Its not like its a limited offer..

A good answer...thanks. So this rules out buying this year! But what about next year when my rent will be 98 quid or the year after when my rent will be around 109 per week? (that's rocketing to me!)(7.5%)

And can I really get 5%? Surely it's more like 3.2%?

I'd say that this is a limited offer, limited to when we have a change of government.(3 years?)

I'm reminded of one of those Pirates of the Carribean films, the one where Depp has his ship sink under him and manages to step straight on to the jetty just as his ship goes under. That's what I aim to do....

I thank you......

[@contradevian]

A good answer...thanks. So this rules out buying this year! But what about next year when my rent will be 98 quid or the year after when my rent will be around 109 per week? (that's rocketing to me!)(7.5%)

And can I really get 5%? Surely it's more like 3.2%?

I'd say that this is a limited offer, limited to when we have a change of government.(3 years?)

I'm reminded of one of those Pirates of the Carribean films, the one where Depp has his ship sink under him and manages to step straight on to the jetty just as his ship goes under. That's what I aim to do....

I thank you......

Interest rates are historically, and are likely to rise. Might even rise in line with rent increases at a guess. Plus you get to hang onto your cash so increased flexibility.

The government however are making noises about making it less easy for tenants to hang on to their secure tenancies. At the moment I suspect this will only affect new tenants, but who knows. If you have savings, who is to say that the council in the future couldn't along and ask you to make way for a homeless drug addict?

I guess though that established secure tenants will have to be bought off. If they can persuade another batch of tenants to buy then existing tenants are less of a problem for the government to deal with.

My feeling is that if I am faced with being forced out and have the choice of buying (somewhere) or going private sector (I'd rather be homeless and sleep in the car than deal with letting agents again) I will leave the country. I can run my crappy businesses from anywhere with internet, Thailand., France.

What I don't understand why there is so little difference between the cost of renting a council house and a council flat. For example my flat is now £65 per week however a 2/3 bed council house is only around £75/85 per week. As I've posted before market rents are starting to touch so called "social rents" for bedsits and one bedders. Indeed a few weeks ago I posted links to a block refurbishment in Kirklees where the bedsits couldn't be let at all, due to lack interest.

No one is going to pay the local ALMO £65 for a bedsit when the private market has them £50-60 a week. They are going to end up stuck with them, but of course that might be the idea. We saw blocks in London, where the secure tenants were decanted out at the blocks sold to private developers.

It might be worth just hanging on a while. I guess they would have to buy out existing assured tenants.

[Game_Over]

Nice to see that most people here have the intelligence to realise that who owns a house is entirely irrelevant to the supply of housing.

[council dweller]

Interest rates are historically, and are likely to rise. Might even rise in line with rent increases at a guess. Plus you get to hang onto your cash so increased flexibility.

The government however are making noises about making it less easy for tenants to hang on to their secure tenancies. At the moment I suspect this will only affect new tenants, but who knows. If you have savings, who is to say that the council in the future couldn't along and ask you to make way for a homeless drug addict?

I guess though that established secure tenants will have to be bought off. If they can persuade another batch of tenants to buy then existing tenants are less of a problem for the government to deal with.

My feeling is that if I am faced with being forced out and have the choice of buying (somewhere) or going private sector (I'd rather be homeless and sleep in the car than deal with letting agents again) I will leave the country. I can run my crappy businesses from anywhere with internet, Thailand., France.

It might be worth just hanging on a while. I guess they would have to buy out existing assured tenants.

Yes, we're caught between carrot and stick aren't we?

I will certainly hang on for between one and three years.

[council dweller]

+1

Happily, that's the most likely outcome. Even with the discount the number of social houses lost to the private sector will be quite modest.

Cameron's stated belief that this will 're-start' the housing market should be frustrated by affordability - as has every other quack nostrum the Eton Trifle has embraced in pursuit of the same mistaken ambition.

"I want many more people to achieve the dream of home ownership. In the 1980s, Right to Buy helped millions of people living in council housing achieve their aspiration of owning their own home."

"This vital rung on the property ladder was all but removed. This government is now putting it back..."

Yes, my guess is that after a rush to buy over the next 6 months there'll be a rapid fall off of numbers wanting to buy. Many are now stuck in the benefits culture too...