Blue Team Raise The Floor Under Private Rents

[Laughing Gnome]

Since the Red Team re-discovered their commitment to council housing thirteen years too late, and started working over their

cross-party proposals to reform the tortuous Housing Revenue Account rules to enable councils to expand and improve their

housing stock, the cross-party initiative seems to have been buried for good.

Whilst rightly commiting to cut Housing Benefit, the coalition appear to be knobbling the council housing sector, wich has substantially

lower rents calculated at cost. COUNCIL RENTS ARE NOT SUBSIDISED!

Council's it appears will be forced to raise their rents to market levels leaving private tenants experiencing benefit cuts nowhere to go.

The profits are to be channeled into increasing the housing stock; probably via grants to housing associations and "social landlords"

whose priorities will be raising rents to the max in search of profits and fat salaries.

Plus, the abolition of tenancies for life will put a council tenancy on a par with a private one in terms of insecurity and reduced commitment to the home and neighbourhood.

A council tenancy is not going to become a decent option for the low waged. Council housing will continue to be nothing more than another ghetto of the lame, funded by housing benefit, in the social housing mix.

I never really expected anything else, but I can't help being dissapointed at the opportunity to REALLY cut housing benefit and the cost of housing being squandered.

[exiges]

A council tenancy is not going to become a decent option for the low waged. Council housing will continue to be nothing more than another ghetto of the lame, funded by housing benefit, in the social housing mix.

Council houses should never be an option, they should be a last resort.

Why should people get inexpensive housing based on circumstances (low pay, child in tow etc.) and then keep it once those circumstances change ?

The average person pays no tax on their £10,000 of earnings, then it goes to 25% then 40% are you suggesting that if someone on low pay doesn't pay tax they never should once their earnings rise ?

[SarahBell]

Council houses should never be an option, they should be a last resort.

Without cheap rents for workers we may as well ship out and leave the UK to be the place for second home owners who will import their own slaves to do the chores.

[Si1]

Excellent news - I made that suggestion a while back - create mutuals that built housing stock rather than simply giving out extra credit like the misnamed 'building societies' did.

I would suggest they should also be able to take deposits. And that these mutuals could target whatever segment of the market they wanted...not just low cost social housing. That they would also improve tenants rights and building standards.

Another very good start in the kernel of the idea - let's now see how this pans out.

Residential Investment Trusts sound like a similar thing, OK so they're not mutual organisations but they do a similar function - the legislation already exists for these in thsi country - but they have not taken off since property yields are rubbish

[Laughing Gnome]

Council houses should never be an option, they should be a last resort.

Why should people get inexpensive housing based on circumstances (low pay, child in tow etc.) and then keep it once those circumstances change ?

The average person pays no tax on their £10,000 of earnings, then it goes to 25% then 40% are you suggesting that if someone on low pay doesn't pay tax they never should once their earnings rise ?

We hear so much about how in France and Germany renting is considered an option because of the comparatively low cost and the security. What would be so wrong about that for the UK, and how would it be acheived?

In my view, it would be an option of last resort, but it should be an option. We are only talking about council tenancies like they are some sort of prize because of the abysmal housing situation we are in. Fighting amonst ourselves over the scraps.

Most would much prefer to own their own homes, and that would also BECOME an option for many more at the point where a council tenancy was possible for a normal working person.

And given that council housing IS NOT SUBSIDISED, where is the harm in someone choosing to be overhoused and pay a higher rent?

[leicestersq]

Since the Red Team re-discovered their commitment to council housing thirteen years too late, and started working over their

cross-party proposals to reform the tortuous Housing Revenue Account rules to enable councils to expand and improve their

housing stock, the cross-party initiative seems to have been buried for good.

Whilst rightly commiting to cut Housing Benefit, the coalition appear to be knobbling the council housing sector, wich has substantially

lower rents calculated at cost. COUNCIL RENTS ARE NOT SUBSIDISED!

Council's it appears will be forced to raise their rents to market levels leaving private tenants experiencing benefit cuts nowhere to go.

The profits are to be channeled into increasing the housing stock; probably via grants to housing associations and "social landlords"

whose priorities will be raising rents to the max in search of profits and fat salaries.

Plus, the abolition of tenancies for life will put a council tenancy on a par with a private one in terms of insecurity and reduced commitment to the home and neighbourhood.

A council tenancy is not going to become a decent option for the low waged. Council housing will continue to be nothing more than another ghetto of the lame, funded by housing benefit, in the social housing mix.

I never really expected anything else, but I can't help being dissapointed at the opportunity to REALLY cut housing benefit and the cost of housing being squandered.

Laughing Gnome,

Council houses are subsidised. The value of the subsidy is the difference between what the council charge in rent for the property, and what the private sector would charge for the same item.

You seem to think that just because a profit is being made on something, then it isnt subsidised. Wrong. Private sector actors are Profit Maximisers, not Profit Achievers.

If you dont understand this, I suggest you ponder for a while on why there are massive waiting lists for council homes? It isnt because they are going to get them at market rates is it?

It seems to me that if you have housing benefit, which is a benefit based on the 'needs' of people to afford a home, then you no longer need council housing. Let those with this benefit go into the market place and see what they can get.

I remain of the opinion that all council housing should be sold off to the highest bidder asap. Indeed I would go further, incorporate a housing benefit amount into a citizens income.

Council housing is a bad system in many ways.

1) It is a huge subsidy for those on low, zero, or fraudulently stated incomes. To qualify for this benefit you need to underachieve. Hardly a good advert for anything.

2) It encourages people to create the perception of need. People have children that they dont want and probably have little interest in looking after, just to secure housing. Children brought about solely for the purpose of enriching their parents, is hardly going to create a generation of well adjust adults. We are seeing the legacy of this already as children who were brought about to game the system grow up and have to make sense of their world.

3) The system is completely unfair. You only need to convince someone for a moment to obtain this benefit. Once you have your council house, keep you nose clean and you get to keep it, even if you become a millionaire. You can even buy it at a massive discount if you become a millionaire, and then sell it on to someone else at a massive profit. This means of course that someone who may be in real need cannot obtain a home from the council whilst someone less deserving occupies it.

4) Any system of allocation of council housing is bound to be subject to corruption. Just because they appear to have a points system for allocating houses, doesnt mean that people who run the system actually stick to it. They might do in many authorities, but there is someone somewhere on the take, there always is.

Council homes are just a huge disaster for the nation. Lets just abandon the idea and stop taxing people to keep this mess going. Things have to change.

[Si1]

We hear so much about how in France and Germany renting is considered an option because of the comparatively low cost and the security. What would be so wrong about that for the UK, and how would it be acheived?

do something to prevent speculative bubbles, large scale housing investment is not worth it currently because the yields are so poor pushed down by amateurs

in fact, succesful housing investment firms in the UK are basically land-banks instead of housing providers, such is the scale of the disjointedness of the market

[Stars]

Why should people get inexpensive housing based on circumstances (low pay, child in tow etc.) and then keep it once those circumstances change ?

You seem to view, paying huge amounts to house yourself in the UK's carnival-of-thievery-housing-market, as some kind of moral imperitative

[tim123]

Since the Red Team re-discovered their commitment to council housing thirteen years too late, and started working over their

cross-party proposals to reform the tortuous Housing Revenue Account rules to enable councils to expand and improve their

housing stock, the cross-party initiative seems to have been buried for good.

Whilst rightly commiting to cut Housing Benefit, the coalition appear to be knobbling the council housing sector, wich has substantially

lower rents calculated at cost. COUNCIL RENTS ARE NOT SUBSIDISED!

Council's it appears will be forced to raise their rents to market levels leaving private tenants experiencing benefit cuts nowhere to go.

The profits are to be channeled into increasing the housing stock; probably via grants to housing associations and "social landlords"

whose priorities will be raising rents to the max in search of profits and fat salaries.

Personally, I don't believe that council rents should be below market rents. There is no justification for someone getting a "low" rent place for life just because they were lucky enough to be allocted a council house 30 years ago.

Council houses are a bloody good deal (because of the implied security of tenure, right to make small modifications and better managed maintenance) giving residents better value for money even at market rents.

Bring it on I say.

tim

[SarahBell]

Personally, I don't believe that council rents should be below market rents.

Explain why you think high rents are good.

[tim123]

Without cheap rents for workers we may as well ship out and leave the UK to be the place for second home owners who will import their own slaves to do the chores.

Except it isn't cheap rents for workers. It's cheap rents for pregenent teenagers, druggies and dole scroungers.

tim

[tim123]

Explain why you think high rents are good.

I said no such thing so I don't need to explain why it is good

tim

[Stars]

Laughing Gnome,

Council houses are subsidised. The value of the subsidy is the difference between what the council charge in rent for the property, and what the private sector would charge for the same item.

The difference between the market rent and what the tenant pays is not an extra subsidy paid by you or the taxpayer. What you are actually observing is the removal or transfer of a subsidy (either, epending on how you view it).

All that has happened is the tenant is collecting the advantages/ value which would have previously been otherwise collected by a landowner. There is no extra added subsidy.

The problem you have here is that YOU are also trying to defend a system of priveliges and subsidy

Edited October 19, 2010 by Stars

[Laughing Gnome]

Excellent news - I made that suggestion a while back - create mutuals that built housing stock rather than simply giving out extra credit like the misnamed 'building societies' did.

I would suggest they should also be able to take deposits. And that these mutuals could target whatever segment of the market they wanted...not just low cost social housing. That they would also improve tenants rights and building standards.

Another very good start in the kernel of the idea - let's now see how this pans out.

Agreed, it would be excellent if mutuals were the plan. But how many housing associations are mutuals? 0.5%? none?

Housing associations seem to me to be about lucrative non jobs for people who would otherwise be miking a charity.

[council dweller]

Laughing Gnome,

Council houses are subsidised. The value of the subsidy is the difference between what the council charge in rent for the property, and what the private sector would charge for the same item.

As I said on the other thread, the subsidy thing has been done to death on here! We're now getting to the implied subsidy bit...

Value means what? If you can catch this ghost please put it in a box and show us!

[Laughing Gnome]

Laughing Gnome,

Council houses are subsidised. The value of the subsidy is the difference between what the council charge in rent for the property, and what the private sector would charge for the same item.

You seem to think that just because a profit is being made on something, then it isnt subsidised. Wrong. Private sector actors are Profit Maximisers, not Profit Achievers.

If you dont understand this, I suggest you ponder for a while on why there are massive waiting lists for council homes? It isnt because they are going to get them at market rates is it?

It seems to me that if you have housing benefit, which is a benefit based on the 'needs' of people to afford a home, then you no longer need council housing. Let those with this benefit go into the market place and see what they can get.

I remain of the opinion that all council housing should be sold off to the highest bidder asap. Indeed I would go further, incorporate a housing benefit amount into a citizens income.

Council housing is a bad system in many ways.

1) It is a huge subsidy for those on low, zero, or fraudulently stated incomes. To qualify for this benefit you need to underachieve. Hardly a good advert for anything.

2) It encourages people to create the perception of need. People have children that they dont want and probably have little interest in looking after, just to secure housing. Children brought about solely for the purpose of enriching their parents, is hardly going to create a generation of well adjust adults. We are seeing the legacy of this already as children who were brought about to game the system grow up and have to make sense of their world.

3) The system is completely unfair. You only need to convince someone for a moment to obtain this benefit. Once you have your council house, keep you nose clean and you get to keep it, even if you become a millionaire. You can even buy it at a massive discount if you become a millionaire, and then sell it on to someone else at a massive profit. This means of course that someone who may be in real need cannot obtain a home from the council whilst someone less deserving occupies it.

4) Any system of allocation of council housing is bound to be subject to corruption. Just because they appear to have a points system for allocating houses, doesnt mean that people who run the system actually stick to it. They might do in many authorities, but there is someone somewhere on the take, there always is.

Council homes are just a huge disaster for the nation. Lets just abandon the idea and stop taxing people to keep this mess going. Things have to change.

Yes I can see how at cost housing destroys the purity of the market, like that's a good thing in itself.

And as for the need argument; if a council tenancy was an option, as it once was, for a trying working person there would be zero incentive to have insupportable children. That is the result of scarcity,

Unbeleivable really, that there is all this envy of council tenants!

[Tonkers]

Except it isn't cheap rents for workers. It's cheap rents for pregenent teenagers, druggies and dole scroungers.

tim

It's just not like that. How many council estates have you lived on?

[Laughing Gnome]

The problem you have here is that YOU are also trying to defend a system of priveliges and subsidy

Thanks Stars, well seen. I am not fast enough to formulate an adequate reply.

[leicestersq]

The difference between the market rent and what the tenant pays is not an extra subsidy paid by you or the taxpayer. What you are actually observing is the removal or transfer of a subsidy (either, epending on how you view it).

All that has happened is the tenant is collecting the advantages/ value which would have previously been otherwise collected by a landowner. There is no extra added subsidy.

The problem you have here is that YOU are also trying to defend a system of priveliges and subsidy

Stars,

I thought that you were in favour of a 'land value tax'?

If there were such a tax introduced, then there would still be a market for rented property. And in such a world we would probably have do gooders dishing out council houses at below the market rates of rent, which would still be a subsidy.

Your argument is saying that two wrongs can make a right. Well I guess if you are very lucky, and the subsidy given to the council house tenant currently would be equal to the reduced tax they would be paying if they rented the same house in the private sector under a regime of perfectly collected 'land value' taxes, then what you say is true.

What I say is, dont muddle those things up. Go for a Land Value tax, I would support it if you could tell me the mechanics of how it would be calculated and raised. I imagine collection would be easy enough, so it may be a great idea.

Separate to that is the idea of council housing and its associated subsidy. However you look at it, there is a taxpayer subsidy to those lucky enough to be tenants, and that will remain even under a 'land value' tax paradigm.

I still say get rid of it.

As for defending a system of privilege and subsidy, I dont know how you could allege that based on my comments? I would like to end the system of privelige and subsidy associated with council housing. I would like rich people to endure a system whereby they pay their taxes fairly. And I think also I would like a 'land value' tax system too. I would also like a system that rewards people for their own efforts, but not their failures.

Where is my defence of privilege and subsidy?

[leicestersq]

Yes I can see how at cost housing destroys the purity of the market, like that's a good thing in itself.

And as for the need argument; if a council tenancy was an option, as it once was, for a trying working person there would be zero incentive to have insupportable children. That is the result of scarcity,

Unbeleivable really, that there is all this envy of council tenants!

Laughing Gnome,

incredible as it seems, there is envy of council tenants. That is why the waiting list is so long.

It has also been brought about by the right to buy rule. That basically gives anyone lucky enough to be in a council house a massive bung.

And there are many council houses worth over £150,000 if allowed to be sold on the open market. Many get these for free, as they have no income.

Meanwhile, I see many hard working people, in places like Asda, Tesco, MacDonalds, for whom I have nothing but admiration. They work for low wages, and have to pay tax so that others may enjoy greater access to good things than themselves, though they are the ones who truly deserve those things.

It would be great if somehow we could interfere in society, to change all of this. Alas, government interference in most social issues almost always makes unfairness far worse, at huge cost to everyone.

[erranta]

You seem to view, paying huge amounts to house yourself in the UK's carnival-of-thievery-housing-market, as some kind of moral imperitative

exiges is one of the freakiest, weirdest posters on HPC - you're right!

Their posts/points of view are ambiguous & usually totally at odds with each other!

(and that's coming from me )

[Laughing Gnome]

Laughing Gnome,

incredible as it seems, there is envy of council tenants. That is why the waiting list is so long.

It has also been brought about by the right to buy rule. That basically gives anyone lucky enough to be in a council house a massive bung.

And there are many council houses worth over £150,000 if allowed to be sold on the open market. Many get these for free, as they have no income.

Meanwhile, I see many hard working people, in places like Asda, Tesco, MacDonalds, for whom I have nothing but admiration. They work for low wages, and have to pay tax so that others may enjoy greater access to good things than themselves, though they are the ones who truly deserve those things.

It would be great if somehow we could interfere in society, to change all of this. Alas, government interference in most social issues almost always makes unfairness far worse, at huge cost to everyone.

Good to find a lot of stuff we agree on.

However it seems to me that the deliberate prevention out of councils from having enough stock to offer to the low waged is right at the root of where we find ourselves now. That has lead to a real actual subsidy to the private sector via Housing Benefit.

[non frog]

.... Alas, government interference in most social issues almost always makes unfairness far worse, at huge cost to everyone.

Yes, that's often true.

This change will force up council rents and so force up the market price and give the BTL mob a breathing space to stay in the bottom 30% so making their investment safer. The Tories have (at last) found a way to prop up house prices while they look as if they are doing something for the poor.

This is really good news for the private rental sector. Bad news if you are waiting for capital value falls in housing. I am beginning to regret selling my London house at the top of the market, we discussed renting it out and that clearly would have been the better option.

[N1AK]

Explain why you think high rents are good.

Explain why subsidising peoples rent regardless of their current financial situation is good? I've worked with people who got council houses 20 years ago, still live there paying negligible rent while earning ~£30k a year. Either you kick people like this out of council housing (unpopular) or you stop subsidising it (by charging below market rate).

[Laughing Gnome]

Explain why subsidising peoples rent regardless of their current financial situation is good? I've worked with people who got council houses 20 years ago, still live there paying negligible rent while earning ~£30k a year. Either you kick people like this out of council housing (unpopular) or you stop subsidising it (by charging below market rate).

FFS! COUNCIL RENTS ARE NOT SUBSIDISED!

And if tenants want to remain when their circumstances improve, whyever not, if a shortage has not been artificially created that is? Wouldn't be for me, but at least that's one less competitor in the market.

And having succesfull working people on council estates is a welcome stabilising factor.