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enigmamedusa

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About enigmamedusa

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  1. There has been a lot of information today, I expect I got the council loan bit wrong. Not 100% sure about the RTB receipts. I think any grant money on the property has to be returned, but as for the rest of it I think the HA is allowed to use it for further development, not sure about that though to be honest
  2. My poor communication I think partly, councils pay for VAT on services, just like you have to if the supplier is VAT registered. It can be very difficult to claim back however. I would expect all HAs to achieve a surplus, it's needed to minimise loan requirements, also banks have loan requirements (loan covenants) to insure that the HA is working effectively and able to pay back what has been borrowed. I think the new changes made today means the councils will also now be able to get loans from private sources based on their stock, to help replace the now lost grant money.
  3. A bit harsh, some HAs pull in a good surplus, to try and minimise loan requirements. The business model has nothing to do with property prices. All loans are secured against the assets (homes) but the assets are valued on the balance sheet at the cost to build, not the current value. This cost is then slowly depreciated (asset value reduced). If it cost £60,000 to build, but now worth £250,000 on the open market the HA values it on the balance sheet at the £60k less the depreciation to date. Poor housing stock = regulation troubles = forced change of executives and staff. Or just closed all together Some HAs are better than others, some are very good some have taken too many risks
  4. The announcements today will divide opinion. Part of me think a home is a home, not something to be taken away when someone else decides it's time. Another part of me thinks that social housing is a scarce resource. The only way to try and ensure that the people who need this scarce resource is to revaluate residents after a number of years to see whether they truely need the use of this scarce resource. Circumstances can change in regards to income, family living at home etc I think social housing will still exist, but it will go one of two ways. 1) It will be less social than previously in terms of cost, still cheaper than private letting and much better regulated with better protection and rights for the residents 2) Rents will be based on what the resident can afford to pay - e.g. very low earner might be charged differently to someone who has a higher income even though both residents might be eligable for social housing. This could be done in either directly changing the rent due, or increasing the bad debt allowance (rent expected never to be received) depending on what the circumstances for individual tenants are There's no point charging rents that the resident can't afford
  5. Not sure I agree with everything you say, especially about HAs being badly run. HAs have to be competitive (read as well run) to enable them to bid for development funds and get development partners, but maybe the HAs as a sector has a bad reputation? I think the one I work with is very good to be fair, very above average resident satisfaction and high levels of resident involvement and additional available services available to residents. But I would imagine I am biased. HAs make a surpus too, but they can have different costs to a council. Mainly the costs of loans to build the homes in the first place, and the interest that these loans attract. Sometimes HAs can have newer stock or spending comittments from transferred stock which may have been in a bad condition. All the surplus funds are used to minimise loan requirements The last insurance invoice (structure, fire, water/storm damage etc, no contents) I saw worked out at around £20-£25 per year per home average I think it might have been cheaper to be honest, but I can't quite remember. This is a mixture of flats and houses, I would call that a fair price, which was possible after a tender process
  6. As someone involved in the finance of social housing, I'm also aware of the cost of repairs. Damp checks, insulation to new standards, new kitchens, heating systems, subsidence checks, windows and doors, bathrooms etc to new decent home standards, repair to common areas, blocked guttering, broken outside light, blocked toilet, tap leaking... The list is endless Cost of repair + labour + VAT (which can't be reclaimed 99% of the time) + "social housing is our cash cow uplift" Voids - Lack of access by current tenant, need to do lots of major works after tenant has left, including the delay of asbestos check and possible removal. Cleaning and repairing damage from tenant has just left. Gas and elec saferty checks on every new void. Advertising lag in choice based lettings, allow bidders time to place their bids, allow time for bidders to view (normally after major works) etc. So yes, voids. I've recently seen a property which took over £15,000 of repairs once the previous resident left. That takes time to fix, and in that time it's void. Collecting rent, HB is not always correct, it has to be chased up with HB. You don't have to inform HB of rent changes? HB pay in arrears, which sometimes needs to be chased, especially when it's the wrong amount. Some tenants do need help with these claims. If you pay rent, especially if you use a rent card normally supplied in partnership with a commercial third party for example paypoint/allpay, this means a transaction cost which is issued to the HA/council. The council/HA isn't based at post office, someone will charge someone for this transactions. Cheques & cash have a transaction paying-in charge at the bank, as do standing orders. Cheapest transaction cost is Direct debit, but that requires lots of administration and paperwork to make sure legalities are followed. Not everyone pays rent on time, or at all. This needs to monitored, chased up with the tenant, possible legal advice, court costs etc Surveyors - if a resident says they have poor windows, or damp issues, dodgy roof etc etc etc, you don't just replace the windows/walls/roof. It has to be looked at by someone who knows their stuff, i.e. a surveyor from the council/H.A Housing officers - 90% of all phone calls from residents are probably complaining about their neighbours or their estate in general. This needs a housing officer to view the estate, resolve differences with neighbours, liase with police etc More and more services are being withdrawn by the government. If a resident is vulnerable or has mental issues or support needs, they need a support officer. No funding for a support officer doesn't change the fact that the resident needs support. There are lots of other non-government funded services. Money advice, need advice on credit cards and options available to you, credit unions, what benefits are you entitled to, you'll get the help if you needed. Direct referral to debt charties and CAB to get a short waiting time, you can get that service, with no cost to you. Insurance on a large scale can be cheap if that helps, which in the company I work for, is not passed on to the resident directly. You could argue that it's all included in the rent
  7. "The figures"? You need a specific development; the cost of the land, the cost of the build; cost of equity/borrowing; bad debt write off levels, contribution to essential staff, legal costs, future voids rates, repairs, provision for changes in legal homes standards....I could go on but I won't. I can't just give figures, it's complicated and varies from location to location. The 80% of market rates is pretty simple really. Many housing associations recently built homes just before the house prices dipped, some of these homes were built for straight 100% market sales and some as Shared Ownership. These are now let as market rate and intermediate (80% market) rates respectively. The market rate is what the free market decides is the current open level of rent for a property in an area, normally with the assistance of people who pretend to know what they are talking about i.e estate agents/bloke in a suit and lots of hair gel. If two bed flats are being let for around £500 per month, that's your market rate.
  8. The build cost is subsidised no? Without that grant money the Net Present value calculation after taking in responsive and major repairs, voids, bad debts, legal regular checks such as gas and elec, gas servcing, new edition electric standards which are always seem to be coming out, contributions towards housing officers, costs collecting the rent, surveyors, etc etc would never come in as a postive figure If that grant money was taken away, it would never be possible for the HA's or councils to get the money from private sources as the NPV life cycle would not add up. The HA's/Councils would have to be able to put the rent up, which is why the option to increase rents has now come in.
  9. It seems the telegraph have made their views know http://www.telegraph.co.uk/news/newstopics...-is-a-c**t.html And yes, that is a real link. Well it works at the moment
  10. Mr Bootle ‘guesstimated’ house prices had another 25 to 30 per cent to fall. This could push around 3.5 million people into negative equity, he added – double the numbers affected in the early 90s recession. He expected land prices to fall a total of 70 per cent from their pre-crunch peak. ‘This is quite simply the greatest bubble that we’ve ever been through and indeed on an international scale, I think it’s the greatest bubble in the whole of financial history,’ he concluded. http://www.insidehousing.co.uk/story.aspx?storycode=6503483 I would be happy with that
  11. That is interesting, but not that surprising. Some developers are running to HA's trying to sell whole developments for cut price deals. They can't sell and they want rid ASAP. Some HA's are changing their "open market sale" houses to rented, while the crash runs its course. "You suggest that HAs can't fail but Ujima failed....or are you saying that HAs can fail but will always be be taken over by other HAs" - yeah pretty much that. Failing HA's have in the past had board and staff changes enforced by the Housing Corp. I believe it's called being put into "supervision", it can't develop any new stock etc. Although I admit, I don't know too much about Ujima
  12. I think it's fair to say council dweller, that you've heard some horror stories. But you shouldn't think that all HA's are like that. I may work for a HA that would not evict someone for having a pet, you're allowed whatever pet you like as far as I understand. Tenants are also not automatically evicted if they lose they jobs, if there's a problem with housing benefit then the tenant has to keep the HA updated. But most of the tenants I've seen evicted have arrears of around £1500-£2000, and at around £70 per week that's 21 - 28 weeks arrears (half a year). If the HA knows it's going to get housing benefit it wouldn't evict even at those limits (where I work anyway) In regard to credit, HA's have all their stock on their balance sheet at cost. So for example a house built 10 years ago might have cost £40,000, but it's real value is a lot higher. So when you look at HA's accounts, it's probably important to remember this. Plus HA's are "limited by guarantee" so as far as I understand it HA's won't go bust because the government is backing them. We've just got around another £20 million loan, and it wasn't a problem as banks see HA's (or at least the one I work) for as a safe bet In regard to other points in the thread "Housing associations non profit. ********" What do you think HA's spend any profits on? They're only allowed to spend it on one thing, more homes... Also someone said something about secret accounts or something similar. I've googled a few housing associations and have managed to view audited accounts on 3 out of 3 so far, and I know the one I work for publishes them. So I'm not sure where that comes from. Oh, and in regard to the initial post, I don't know anything about that HA, but did it say whether the sales were houses that were built for open market sale? As it could have been the case that the homes were built to be re-sold. Sometimes in an estate, you might have 30 rented homes, 10 shared ownership and 10 open market sales. Selling homes should not be seen as an act of last resort if they were built to be resold. By having a mix or rented/shared/outright sales on an estate you create a nice mix
  13. Link? http://www.telegraph.co.uk/money/main.jhtm...mortgage114.xml
  14. I might be wrong, so please correct me accordingly: 1. You know nothing about HA's, at all. But you want to rant. 2. You think HA's were not around before "new" labour got into power 3. You think HA's have private investors!!! 4. You have no idea of the relationship between developers and HA's and how it works. 5. You have no idea how many people HA's home or the other work they do 6. Somehow you've linked HA who are charties with no shareholders, and the £50billion given to organisations designed to give returns to shareholders. 7. Back to point 1. I was only trying to pass on some useful information, but I won't bother in the future
  15. 'Given' was a poor turn of phrase. How's 'allocated' instead? Comparing banks to HA's is mental. HA's are charities, have no shareholders, have lots of regulation, can be taken over at any time if run badly, stopped from developing or buying land if poorly run, HA's given no grants if poorly run, audited heavily and benchmarked against good practice etc etc . HA's profits, if they make any, go to into more affordable housing, nothing else, it's simply not allowed. So indirectly they are generating cash which benefits the government; more cash generated means less the government has to spend on affordable housing. The reason most HA's exist is that the council transferred their stock because they couldn't run maintain them properly, and the HA's are allowed to get mortgages to fund developments if they haven't got enough surplus cash. Banks are generally; money grabbing, make massive profits, care little for customers, make a few people very rich, take the profits and then ask for state help when they've spent it all instead of going to shareholders. Again I'm far from an expert, but I don't see the banks comparsion at all.
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