2buyornot2buy Posted February 25, 2011 Report Share Posted February 25, 2011 Do they. And how is housing benefit worked out. why is HB higher in most other city's in the UK. Perhaps the rents there are higher. If a family present themselves as homeless to the HE the HE first looks at its own stock. If nothing is available/suitable(?) they turn to the 37 registered H assoc'. Again if nothing there tickles their fancy they look to the private market. If the private landlord is looking, say £500 it is kind of irrelevant as the HB is calculated on the family unit (number of kids etc) and on rates of the average market price. In many cases this falls short of the market/asking price. In some cases these people manage to make up the shortfall or the landlord, if he cant rent his 2 bed apt to anyone else, takes the offer. Rents are not linked to house prices. They didn't double when house prices did. They didn't half when house prices did. They are a purer reflection of demand and supply. I agree alot of that demand is coming from people on benefits. In the 60's this was much higher and only reduced with the expansion of HE build during the 70's. There was a rent fix, of sorts then (cant remember the exact phrase). There is a fine line here. People here argue that the HB props up the average rent price. To an extent yes. If the private tenants all clumped together and all said they were only paying 90% of the rents from now on rents would come down. Similarly with HB. If they reduced there firstly would be turmoil as people are turfed out, particularly of good houses and then a equilibrium would be found. Two things this is a major market intervention and secondly we cant have families places on the streets. What I imagine will happen is the old rent freeze, and the stopping of other free handouts ie money for the family to do the garden up or replace the wooden floor. (I have a HB tenant and over the years it is amazing what she has got grants to do to the house. She always gets me to tip in and I know I am being foolish as there is no way she would do it if she didn't get a full grant) You forget that a decision was made, by the gov that it was cheaper to pay £400 in rent to the private sector than to build their own stock. I can't see that decision being reversed in the near future. Even though land is for nothing they haven't got the money to commence on a massive build program. They have been approaching us to see if we would fund and rent back new stock for them on a 25 year lease. Thats where they are trying to take it. They see a bigger reliance on the private sector going forward. They know they haven't the capital themselves and they also know they are totally inefficient in the way they build them. HB is market intervention on a massive scale. How do they set the market rate you ask? They get the figures from EAs if I'm not mistaken. At the end of the day it sets an artificial bottom on what a landlord has to accept. This benefit means that individuals like me subsidize these rents and then get hit again by having to pay over this minimum rate. Let's not even get into the amount of vacant property we subsidize through rates relief which is coming to an end. Quote Link to post Share on other sites
yadayada Posted February 26, 2011 Report Share Posted February 26, 2011 You are right of course. There is nothing to stop the Gov decreeing that the HB is to be halved. Or to announce that the GOV will only pay 1/2 price for the electricity it uses or the food it buys for its hospitals or schools. They can do it. It will be fun to watch and heads would role. A truly nonsensical attempt to make a comparison There electric may be cut off, people in hospitals may have to go without food for a while and thousands of people may be forced to the streets as the banks Rubbish( Let's see if we can get a bet going on this. HB rents are a fine example of a lack of fungibility, and they are coming down significantly. Well before the end of the year, is my prediction. Quote Link to post Share on other sites
BelfastVI Posted February 27, 2011 Report Share Posted February 27, 2011 HB is market intervention on a massive scale. How do they set the market rate you ask? They get the figures from EAs if I'm not mistaken. At the end of the day it sets an artificial bottom on what a landlord has to accept. This benefit means that individuals like me subsidize these rents and then get hit again by having to pay over this minimum rate. Let's not even get into the amount of vacant property we subsidize through rates relief which is coming to an end. I agree the Gov will commence bringing these down by a mixture of -freeze, cap (wont really effect NI), tighting of the rules and perhaps a review of actual rules to actually bring the rates down. what I don't agree with is the notion that the GOV paying the market price (which in many cases they don't and the tenant has to make up the difference)is considered Market intervention. I dont know what % of the rental market the HB block is. I would guess 30%, but could well be wrong. My example of electricity was not appreciated but, how about airfare. I am not sure what % of business class airfare tickets are purchased by the Gov (or if they are allowed any now). Again I will guess it is, or was 30%. Now is the fact that the Gov pays the going rate considered market intervention in this case? If the Gov withdraws there will be less demand and the price should go down (although hard to know with airlines) but is it market intervention? The same can be said for anything else the Government requires and pays open market price. Legal services, catering, fleet cars, hotel bookings etc etc. The Government may well attempt to intervene and bring the prices down by lowering their grant aid. I imagine there will be quite a bit of fuss (Just thinking of Alex Atwood etc). However, aside from the rights and wrongs of it, I believe that such action would be considered market intervention, whilst paying the market rate would not. We need to look past the fact that this has something to do with our specialised subject and look back to our days in commerce class. A block group, paying market rate will sustain demand and ultimately increase that rate but is not in itself market intervention. The remainder of the demand for that product needs to be able to sustain that value. Quote Link to post Share on other sites
R + R Posted February 28, 2011 Report Share Posted February 28, 2011 I agree the Gov will commence bringing these down by a mixture of -freeze, cap (wont really effect NI), tighting of the rules and perhaps a review of actual rules to actually bring the rates down. what I don't agree with is the notion that the GOV paying the market price (which in many cases they don't and the tenant has to make up the difference)is considered Market intervention. I dont know what % of the rental market the HB block is. I would guess 30%, but could well be wrong. My example of electricity was not appreciated but, how about airfare. I am not sure what % of business class airfare tickets are purchased by the Gov (or if they are allowed any now). Again I will guess it is, or was 30%. Now is the fact that the Gov pays the going rate considered market intervention in this case? If the Gov withdraws there will be less demand and the price should go down (although hard to know with airlines) but is it market intervention? The same can be said for anything else the Government requires and pays open market price. Legal services, catering, fleet cars, hotel bookings etc etc. The Government may well attempt to intervene and bring the prices down by lowering their grant aid. I imagine there will be quite a bit of fuss (Just thinking of Alex Atwood etc). However, aside from the rights and wrongs of it, I believe that such action would be considered market intervention, whilst paying the market rate would not. We need to look past the fact that this has something to do with our specialised subject and look back to our days in commerce class. A block group, paying market rate will sustain demand and ultimately increase that rate but is not in itself market intervention. The remainder of the demand for that product needs to be able to sustain that value. so you as a large buyer of building supplies dont look for a wee bit of discount? rock on! Quote Link to post Share on other sites
BelfastVI Posted February 28, 2011 Report Share Posted February 28, 2011 so you as a large buyer of building supplies dont look for a wee bit of discount? rock on! If placing a large order with a single vendor - yes Quote Link to post Share on other sites
Recommended Posts
Join the conversation
You can post now and register later. If you have an account, sign in now to post with your account.