Jump to content
House Price Crash Forum
tomandlu

Housing Benefit

Recommended Posts

In the dim distant past, I sent the following to Sadiq Khan (my local MP), and various other relevant MPs:

Dear Mr Khan,

Firstly, congratulations on your re-election.

Moving on, I am writing to express my confusion over housing benefit.

To clarify, I am married with two children - a boy aged 12 and a girl aged 8. As far as I can tell, if I were claiming housing benefit, I would be entitled to a 3 bedroom property, costing up to £375 a week. However, I am not claiming housing benefit, since I am in full employment, and therefore the most I can afford is somewhat less than this. Consequently, my wife and I rent a two-bedroom property costing £275 a week, and share a sofa-bed in order to ensure that the children each have their own room.

Since this is perfectly acceptable for my wife and I, can you explain why it is not acceptable for a similar family on benefits? To put it bluntly, would I be correct in thinking that I'm paying additional tax in order to ensure that those claiming housing benefit can afford to live somewhere with more rooms than me?

In addition, it occurs to me that this relatively high benefit might explain why the local rents for properties with more bedrooms aren't more affordable for my family. Why would landlords lower rents to levels that could be paid by those not claiming housing benefit when they can get more from housing benefit claimants?

So, to summarise...

* My family pay a level of tax that means we can only afford to rent a property with two bedrooms in order to ensure that a similar family claiming housing benefit can afford to rent a property with three bedrooms

* The relatively high level of housing benefit available may go some way to explaining how rents in this area are not affordable for working families

Obviously, I'm delighted for the tenants and the landlords who are benefiting from the above arrangement, but I can't help but feel a little hard done by on my own behalf. If I have misunderstood something, or there is a reasonable explanation for this slightly peculiar state of affairs, I would be delighted to hear it. If, on the other hand, the above is largely correct, could you explain what you intend to do about this ridiculous situation?

A couple of suggestions:

* As I can testify, a couple with children do not require their own bedroom - a sofa-bed in the sitting room is fine (I can even recommend a relatively cheap one from Ikea)

* Housing benefit should be set at less than the median for rentals in each area - say 90%. This will ensure that housing benefit does not force up the cost of local rents in what is otherwise an inflationary spiral. (I believe that the benefit is currently set at the median).

I await your reply with interest.

All the best,

I received a few replies, mostly fairly perfunctory, and the one detailed reply up till now mainly repeated facts already stated in my original email...

However, I got back from holiday to find a nice letter from Sadiq apologising for the delay, and enclosing a letter from Iain Duncan Smith. Here is IDS's letter:

ids_letter01.jpg

post-17279-12822996253827_thumb.jpg

Share this post


Link to post
Share on other sites

However, I got back from holiday to find a nice letter from Sadiq apologising for the delay, and enclosing a letter from Iain Duncan Smith. Here is IDS's letter:

Good letter, apart from the use of the word 'customer' to describe a recipient of benefits.

Edited by thecrashingisles

Share this post


Link to post
Share on other sites

Well IDS seems to show his anger, and seems to indicate he is aware of the abuses of the system.

Just a shame that the changes seem way too lenient. For now at least, you will continue to pay more tax than you need to, in order to keep others in housing that you will not be able to afford.

Share this post


Link to post
Share on other sites

...looks like a better managed system going forward ....under Nuliebour all 'customers' would have ended up renting for thousands of pounds a week in Kensington and Chelsea ....the Labour style for 'aspiration'..... :rolleyes:

Share this post


Link to post
Share on other sites

I am very happy that he acknowledges and understands the key issue. That people on benefits can get a better house on the taxpayer than working people. He needs to stop this as soon as posible 2013 is too late.

Share this post


Link to post
Share on other sites

Well IDS seems to show his anger, and seems to indicate he is aware of the abuses of the system.

Just a shame that the changes seem way too lenient. For now at least, you will continue to pay more tax than you need to, in order to keep others in housing that you will not be able to afford.

TBH I try to remain fairly sanguine about such things, and I'm not losing any sleep over it. However, the patent absurdity and non-sustainability of the current system needs to be addressed (and should never have arisen 'boom' or no 'boom'). Aside from that, it's yet another area where people are penalised for making an effort and rewarded for the opposite, and that's not fair on anyone.

Are there 'abuses' of the system? I would say the system is wrong, rather than those who use it to their best advantage.

My righteous anger tends to be reserved for the great and the good of this fair land, rather than a few aimless underclass who occasionally get to benefit from the idiocy of the former...

Share this post


Link to post
Share on other sites

In the dim distant past, I sent the following to Sadiq Khan (my local MP), and various other relevant MPs:

I received a few replies, mostly fairly perfunctory, and the one detailed reply up till now mainly repeated facts already stated in my original email...

However, I got back from holiday to find a nice letter from Sadiq apologising for the delay, and enclosing a letter from Iain Duncan Smith. Here is IDS's letter:

Well done tomandlu. I told you your letter was brilliant.

And as a fellow private tenant, thank you for your excellent lobbying!

Share this post


Link to post
Share on other sites

TBH I try to remain fairly sanguine about such things, and I'm not losing any sleep over it. However, the patent absurdity and non-sustainability of the current system needs to be addressed (and should never have arisen 'boom' or no 'boom'). Aside from that, it's yet another area where people are penalised for making an effort and rewarded for the opposite, and that's not fair on anyone.

Exactly.

Are there 'abuses' of the system? I would say the system is wrong, rather than those who use it to their best advantage.

My righteous anger tends to be reserved for the great and the good of this fair land, rather than a few aimless underclass who occasionally get to benefit from the idiocy of the former...

But in a burglary case, would you not blame the burglar?!

Edit: I am referring to bogus claimants, not legitimate claimants.

Edited by Tired of Waiting

Share this post


Link to post
Share on other sites

A good letter produced a good response, I am convinced that labour were deliberately subsidising their BTL friends who have been free to loot and despoil the lives of ordinary working people for too long. This is a step in the right direction. IDS has found his niche.

Share this post


Link to post
Share on other sites

Well done tomandlu. I told you your letter was brilliant.

And as a fellow private tenant, thank you for your excellent lobbying!

+1

Superb.. and what a great response for HPCers

Thanks

Share this post


Link to post
Share on other sites

a good thread and quality move by the OP and a good response too.

i think there IS NOT a problem with housing benefit. theres a problem with private rents and house prices. since the lack of HA stock is too small for demand, private lettings have filled the void. so councils have to shell out those big rents.

crash house prices and tax out buy to let idiots.

rents and so HB costs will fall.

what the banks lose - the HB reduction makes up for.

its the government taking back from the banks in a way.

Edited by right_freds_dead

Share this post


Link to post
Share on other sites

In the dim distant past, I sent the following to Sadiq Khan (my local MP), and various other relevant MPs:

I received a few replies, mostly fairly perfunctory, and the one detailed reply up till now mainly repeated facts already stated in my original email...

However, I got back from holiday to find a nice letter from Sadiq apologising for the delay, and enclosing a letter from Iain Duncan Smith. Here is IDS's letter:

Good job, good response!

Why do not you send it to some Labour MPs as well ???

Share this post


Link to post
Share on other sites

But in a burglary case, would you not blame the burglar?!

Edit: I am referring to bogus claimants, not legitimate claimants.

The trouble is that you don't need bogus claimants for the current system to be absurd. I'm happy to blame burglars, but not so sure about people who are told they have a legal right to nick my stuff... ;)

Share this post


Link to post
Share on other sites

Exactly.

But in a burglary case, would you not blame the burglar?!

Edit: I am referring to bogus claimants, not legitimate claimants.

Risk management via insurance - reducing your risk is an issue for this though.

Apply to jobs/mortgages

make sure you have savings, good job skills, and keep on top of the game.

Share this post


Link to post
Share on other sites

The trouble is that you don't need bogus claimants for the current system to be absurd. I'm happy to blame burglars, but not so sure about people who are told they have a legal right to nick my stuff... ;)

I agree. That's why I made the distinction between bogus and legitimate claimants.

Share this post


Link to post
Share on other sites

It is quite shocking to see common sense applied to these things after a decade of idiocy from Labour.

Share this post


Link to post
Share on other sites

The main problem is the time it is taking, HB April 2011, 30% percentile Oct 2011, JSA reduction 2013 and we are over spending by circa 500m per day. By contrast if you rent privately (after the initial AST) you have 2 months notice to quit at the whim of the LL.

I agree that it is painfully frustrating. But I think the new government does not have political support (from the voters, LibDems, BBC, etc.) to do anything stronger or faster, unfortunately.

Share this post


Link to post
Share on other sites

At least he admits Government has been spending 20 billion a year on a price fixing scheme for housing. It's basically a government guarantee that rents can never fall, no matter what market forces occur....the minimum this year is always at least last year's median, locking in inflation, and it's paid for by taxpayers. No wonder BTL has been a sure bet. The IDS letter is encouraging but it's a shame it will take so long to implement the changes.

Share this post


Link to post
Share on other sites

IDS is an idiot.

This is the sort of issue that should have been addressed direct and immediately, with strong and immediate measures.

In 2013 when a lot more people are unemployed and on LHA it will be harder to push this sort of thing through, while at the moment, public opinion would make it easy.

It's a missed opportunity, and, I fear, one deliberately missed.

Share this post


Link to post
Share on other sites

But the whole problem is a chicken and egg situation. A problem that has been building up for the last 30 to 40 years.

Succsessive govenment's have not seen that enought houses have been built in both the public and private sector. Let's not forget that IDS , was part of the last tory govenment that got kicked out in 1997, a govenment that sold off all the best council houses , and would only let 20% of the procededs be spent building any more. They also encouraged people to borrow more and more money , Stupid mortgage mutiples were around in the 80's not as stupid as the last boom but they were there. This pushed the price of property up and up.

Coupled with earnings in real terms falling at average and lower pay rates and high taxes on average and low earnings , has also created a system where people on benefits are better off than those working .

The whole stupid system that enables those not working to enjoy a better home than those that do work , is the result of more than one factor. It took a long time to get to this crazy position and will take more than just limiting HB for us to get back.

Share this post


Link to post
Share on other sites

IDS is an idiot.

This is the sort of issue that should have been addressed direct and immediately, with strong and immediate measures.

In 2013 when a lot more people are unemployed and on LHA it will be harder to push this sort of thing through, while at the moment, public opinion would make it easy.

It's a missed opportunity, and, I fear, one deliberately missed.

Certainly a missed opportunity. Deliberate? I'm not sure. You need to realise that the agenga is not deficit reduction. or public spending. It is about holding up house prices. Reducing housing benefit will push HPI down and nobody in Con/Lib/Lab wants that. All parties have a vested intersest in keeping HPI (and general inflation measured by CPI/RPI) racing ahead.

EDIT

Sorry...I'm pissed. Of course it's deliberate.

Edit/4 beers/1 bott red wine /2glass port

Edited by ingermany

Share this post


Link to post
Share on other sites

But the whole problem is a chicken and egg situation. A problem that has been building up for the last 30 to 40 years.

Succsessive govenment's have not seen that enought houses have been built in both the public and private sector. Let's not forget that IDS , was part of the last tory govenment that got kicked out in 1997, a govenment that sold off all the best council houses , and would only let 20% of the procededs be spent building any more. They also encouraged people to borrow more and more money , Stupid mortgage mutiples were around in the 80's not as stupid as the last boom but they were there. This pushed the price of property up and up.

Coupled with earnings in real terms falling at average and lower pay rates and high taxes on average and low earnings , has also created a system where people on benefits are better off than those working .

The whole stupid system that enables those not working to enjoy a better home than those that do work , is the result of more than one factor. It took a long time to get to this crazy position and will take more than just limiting HB for us to get back.

The thing I'm struggling with, is that the Condems want to reduce the amount of housing benefit a claimant of jsa gets after one year to 90% of the total. Well thats fine when the economy is in a strong state, but when all & sundry are being put on to jsa, and with only half a million jobs around for these, what, (potentially) 5 million claimants, as you can see, there's a complete mismatch of the jobs available to claimants chasing these jobs.

What will happen is that some will be made homeless, some will turn to crime, and some will turn to the black market, in order to make ends meet.

How can those in the corridors of power have any understanding what its like living virtually hand to mouth?

http://www.dailymail.co.uk/news/article-1304906/Prime-Minister-David-Cameron-rents-home-72k-year.html

Edited by Dave Beans

Share this post


Link to post
Share on other sites

You both are missing the point, rents isnt the problem, housing benefit isnt the problem, reducing rents by 10% would mean a further drop by 10% but then it would mean another drop of 10% etc... as in 2013 housing benefit after a year will have 10% less payment from the face of the contract , so even if you reduce the rent by 10% the unemployed will still need to pay 10% difference no matter what.

that would mean 10% less money going back into the system.

You and the government seem set to keep high house prices, by making an issue of rents, rents will not drop as much as you'd like in fact they'll rise to take care of the defaults, and not only this it would hit people that work on min wage.

Rents will only drop when government and local councils build more social housing meaning an easing out and reduction in rents in the private sector, what you need to understand is that the private sector can only cope for a certain amount of individuals it cannot cope for all, if it has to cope for all then rents need to be high in order for more landlords to expand their properties.

There are so many benefits for teh argument of social homes being build.

Edited by crash2006

Share this post


Link to post
Share on other sites

The thing I'm struggling with, is that the Condems want to reduce the amount of housing benefit a claimant of jsa gets after one year to 90% of the total. Well thats fine when the economy is in a strong state, but when all & sundry are being put on to jsa, and with only half a million jobs around for these, what, (potentially) 5 million claimants, as you can see, there's a complete mismatch of the jobs available to claimants chasing these jobs.

What will happen is that some will be made homeless, some will turn to crime, and some will turn to the black market, in order to make ends meet.

How can those in the corridors of power have any understanding what its like living virtually hand to mouth?

http://www.dailymail.co.uk/news/article-1304906/Prime-Minister-David-Cameron-rents-home-72k-year.html

It's because the number of jobs available is not fixed. Every time someone accepts a job, starts producing, and being paid, and spending his/her salary, the economy grows a little, and kind of "creates another job".

Google "lump of labour fallacy". It explains that better.

.

Edited by Tired of Waiting

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.