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Kensington And Chelsea Council Statement On Housing Benefit


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So who would you ask, the local greengrocer?

Shouldn't they also ask private tenants, for instance? Just for an outlandish concept: balance?

Or, even better, get real contracts, real money changing hands.

Just think and plan a balanced and/or very objective system.

Is this too much to ask??

Do you honestly think that asking landlords and letting agaents how much money they think the central government should pay them is a fair/sensible/smart strategy?? Do you?

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Edited by Tired of Waiting
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OK, I'll believe you ( you sound reliable ;) )

So the main source of info for these VOA officers are landlords and letting agencies. Still a tad worrying, no??

And the VOA has "an extensive network of Rent Officers throughout the country"? I thought they were London based. Are they based "in the provinces"? Are they locals themselves? Or living there? Going native?

'cause, if you pardon my french, LHAs are a fecking loadsamoney.

LHA's are based on the local property market in privately rented property in Broad Rental Market Areas (defined geographical areas which have broadly similar rental markets). The only way to establish what the local market rates are is to gather information from the main people organising the local market, which are letting agents. They do gain info. from other sources such as private letting notices, newspaper letting notices, etc. but as the majority of the market is conducted via letting agents this tends to be the main source of info. How else could you establish a market rent without looking at the market?

In my opinion the main aim of the Rent Officer and VOA for the last fifteen years has been to keep rents low and if anything I believe they have skewed the data to bring in lower LHA rates to try to exert drag on the market via Housing Benefit.

With regard to the VOA and by extension the Rent Officer Service, they used to have a local service in every reasonably large town. As far as I know the offices have been rationalised over the last five years, but Rent Officers are still based throughout the country and work remotely with central admin being handled in the Newcastle area.

Given the immense rise in House Prices over the last fifteen years, the rise in rents over the same period is not comparable.

House prices in Brighton ( a hotspot admittedly) increased by 400% over that period, in the same period rents rose by 60%. Inflation alone over that period should account for 40% of the increase.

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Take into account everyting double in price over a 10 year period those numbers [HB cost rise from £14 billion to £21 billion] arn't too bad.

The main reason is the large number of people losing their jobs during the recession. Also a much higher propotion of these new HB claimants live in (relatively expensive) Private Sector Rental accommodation than earlier long-term claimants. In addition, there is a long-term trend away from social housing to private rentals resulting from Right To Buy. A decade ago less than a fifth of HB claimants were in the PSR, now it's around a third - see Appendix i) % of HB claimants in PRS in 'Impact of the changes to Housing Benefit announced in the June 2010 Budget':

http://www.publications.parliament.uk/pa/cm201011/cmselect/cmworpen/memo/hb/hb72a.htm

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Notice that 'housing benefit is out of control' but no one is suggesting that 'rents are out of control'.

Because if you say housing benefit is out of control = rents are out of control, then it is only a small step to conclude that rents are out of control = house prices are out of control. And because this is obviously a nonsense, then peoploe can't metnally make the connection between housing benefit / rents.

Why would anyone want to rent in the private sector, given that the differential in rents was so high, unless they had to?

What criteria do they use for letting people rent in the 'social sector'.

And if my understanding of markets and economics is anything, when you 'control' the price of something, you get too much supply or too much demand unless they happen to magically hit the market price, which no one, not even the Dutch, can ever do. So in that 'controlled sector', how is housing allocated? What restrictions are there in accessing it? Is it like the UK where you can have a 3/4 million pound apartment for £60 a week if you are Frank Dobson (or whatever his pitifully low rent was), or is there some income restriction upon it?

Housing benefit is a farce. I like the idea of a citizens wage, paid for by a land tax. That way, it lets the market decide the true value of everything.

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<br />Wow, I was doing some research and I came across this unbelievably honest page on the Kensington and Chelsea council website ...<br /><br /><a href='http://www.rbkc.gov....ingbenefit.aspx</a><br /><br /><br />

"Spending on housing benefit has risen from £14 billion ten years ago to £21 billion today. That is close to a 50 per cent increase over and above inflation. Costs are completely out of control"

House prices were allowed to inflate by 90% in those 10 years. Govt Allowed it deregulating the City.

Rents went the same way - Govt allowed it by removing sensible rent contols in Thatchers time!

Who is to blame?

It's a deliberate policy introduced by Elites to undermine and trash any civilised form of basic welfare & social cohesion.

They are doing exactly the same to the NHS (making it appear to be too expensive, Privatise it and thus fall into the hands of rip-off City Financials and medical insurance companies the rich have set up & have waiting in the wings!)

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"Spending on housing benefit has risen from £14 billion ten years ago to £21 billion today. That is close to a 50 per cent increase over and above inflation. Costs are completely out of control"

House prices were allowed to inflate by 90% in those 10 years. Govt Allowed it deregulating the City.

Rents went the same way - Govt allowed it by removing sensible rent contols in Thatchers time!

Who is to blame?

It's a deliberate policy introduced by Elites to undermine and trash any civilised form of basic welfare & social cohesion.

They are doing exactly the same to the NHS (making it appear to be too expensive, Privatise it and thus fall into the hands of rip-off City Financials and medical insurance companies the rich have set up & have waiting in the wings!)

Erranta,

rent controls deal with symptoms, not the cause. If you are going to make things affordable then you need to deal with the underlying supply and demand issues, not force the price to where you would like it, as that always creates greater problems elsewhere. Nice for the few that get the lower price of course, not so nice for the many who have to be excluded from the allocation of that resource though in order to make it happen.

If you are going to attack the elites, mucking around with supply and demand will achieve nothing. Instead you should look to what Adam Smith said, about small groups of men conspiring to fix prices, or gain from government handouts to the wealthy.

Markets operate much more fairly when you remove the unfair advantage people can gain from collaboration.

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Because if you say housing benefit is out of control = rents are out of control, then it is only a small step to conclude that rents are out of control = house prices are out of control. And because this is obviously a nonsense, then peoploe can't metnally make the connection between housing benefit / rents.

Housing benefit is a farce. I like the idea of a citizens wage, paid for by a land tax. That way, it lets the market decide the true value of everything.

Citizen wage is such a waste of time, it'll push up prices, homes used for investment purpose would be subjected to 80%CPT. Home rent via councils at council rates will be subjected to 10% CGT allowing everyone access.

Edited by crash2006
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<br />Erranta,<br /><br />rent controls deal with symptoms, not the cause. If you are going to make things affordable then you need to deal with the underlying supply and demand issues, not force the price to where you would like it, as that always creates greater problems elsewhere. Nice for the few that get the lower price of course, not so nice for the many who have to be excluded from the allocation of that resource though in order to make it happen.<br /><br />If you are going to attack the elites, mucking around with supply and demand will achieve nothing. Instead you should look to what Adam Smith said, about small groups of men conspiring to fix prices, or gain from government handouts to the wealthy.<br /><br />Markets operate much more fairly when you remove the unfair advantage people can gain from collaboration.<br />

Complete crap - Hundreds of thousands of council houses etc are/were rented out at a 'fair' rental price. They were paid off decades ago! The only cost to councils is upkeep.

This Govt and last Govt demanded that these rents rise to the local private rental levels (whilst shutting off all other council house development - wunder why?

Houses/flats that the poor have rented and paid for 10x over generations until their dying day - The poor are being targetted & made to subsidise Govt coffers.

If they have been slung out of their jobs by Govt allowing 'outsourcing' - the taxpayer then pays more as Govt/councils increase the rent.

Yet another of the elites 'escalating ladders' like fuel escalator/green 'energy' escalator taxes (affects poor far more than richer people percentage of income - housing ladder (all anti-biblical)

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Link please? :)

'Contact the VOA':

http://www.voa.gov.uk/corporate/contact/index.html

We have a network of offices, arranged in Groups, located in towns and cities across the UK.

Our Group office boundaries align with those of the Government regional offices.

Members of the public are invited to visit our offices which are generally open between 8.30am to 5:00pm Monday to Friday.

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Why would anyone want to rent in the private sector, given that the differential in rents was so high, unless they had to?

What criteria do they use for letting people rent in the 'social sector'.

And if my understanding of markets and economics is anything, when you 'control' the price of something, you get too much supply or too much demand unless they happen to magically hit the market price, which no one, not even the Dutch, can ever do. So in that 'controlled sector', how is housing allocated? What restrictions are there in accessing it? Is it like the UK where you can have a 3/4 million pound apartment for £60 a week if you are Frank Dobson (or whatever his pitifully low rent was), or is there some income restriction upon it?

Good questions, can't answer all. I don't know much about the social sector. But all three sectors come from a general concept known as 'leverbaar Holland', more of an attempt at social engineering than market interference. The Dutch simply didn't want towns with vast differences between good and bad areas, and definitely not 'no go' areas. So the the zones are deliberately mixed.

Why would anyone want to live in the private sector? I have already explained, that the controlled sector associations want people on long-term lets who are committed to the area. High, permanent occupancy is profitable, and this helps to keep rents down. But you will have to kit out your controlled house and sign a contract for at least a year.

Anyone not thinking long-term, or undecided about the location or the investment in a kitchen, carpets and curtains etc, will opt for a private place. In the first year, the difference in the total amount won't amount to a whole heap.

I think restrictions/residency qualifications vary from place to place. Where there is pressure on housing, I believe there are restrictions . . for example, you won't be offered a four bedroom house if you are single. And there's the private sector for those people if that's their preference, or for people who want to live in one area only where there are no other options. And there's the choice of buying and becoming an owner occupier, if course.

To me, the concept seemed to work well. I got good affordable accommodation which I could never find here.

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Gosh, another example of governments interfering with markets, giving one section of the community huge subsidies, and squeezing supply in those excluded from that such that they have to pay exorbitent rents to make things balance.

I wonder if you could devise a more unfair system?

You do recognise the character in his avatar, right? Our Vladimir Ilyich?

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LHA's are based on the local property market in privately rented property in Broad Rental Market Areas (defined geographical areas which have broadly similar rental markets). The only way to establish what the local market rates are is to gather information from the main people organising the local market, which are letting agents. They do gain info. from other sources such as private letting notices, newspaper letting notices, etc. but as the majority of the market is conducted via letting agents this tends to be the main source of info. How else could you establish a market rent without looking at the market?

[snip]

As ToW suggested in post #102, and as I have said before, they should do it by collecting data from all rental contracts. Why the complex bureaucracy?

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You do recognise the character in his avatar, right? Our Vladimir Ilyich?

Yes, I recognise him.

He gave a very lucid explanation of how he sees the situation in Holland. It suggests to me that there isnt the same sort of housing pressure in the area that he lived/lives in as much of the UK. I know someone who has taken out a mortgage for half a million Euros for two floors of a house in Amsterdam. Mind you, it is two minutes away from the Van Gogh museum, you gotta pay to be near those works of art.

As he correctly said, you can offer a lower rent if you can be sure that the renter is going to remain in the property for a long time. That may explain some of the difference between that and short term rentals.

Problems stack up though, when there is simply not enough property. Like council housing in this country, price at below what the market would, and you get big queues forming. It doesnt sound as if there are any big queues in Holland from his description.

It would be interesting too to know how benefits are organised there. Do they give you a home, or housing benefit like in the UK?

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Dutch unemployment - lowest in Eurozone

4.2% of the labour force - seasonally adjusted - Apr 2011

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Yes, I recognise him.

He gave a very lucid explanation of how he sees the situation in Holland. It suggests to me that there isnt the same sort of housing pressure in the area that he lived/lives in as much of the UK. I know someone who has taken out a mortgage for half a million Euros for two floors of a house in Amsterdam. Mind you, it is two minutes away from the Van Gogh museum, you gotta pay to be near those works of art.

As he correctly said, you can offer a lower rent if you can be sure that the renter is going to remain in the property for a long time. That may explain some of the difference between that and short term rentals.

Problems stack up though, when there is simply not enough property. Like council housing in this country, price at below what the market would, and you get big queues forming. It doesnt sound as if there are any big queues in Holland from his description.

It would be interesting too to know how benefits are organised there. Do they give you a home, or housing benefit like in the UK?

I don't know how it is there now but about 10 years ago a friend moved there, to Amsterdam, and the waiting list for a housing association was 4 years. He stayed there just 1 year, high rent, cr@p tiny studio flat, shared facilities (!), gave it up, and came back.

I don't know now, but I think Germany has sorted its housing issue much better, AFAIK.

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You do recognise the character in his avatar, right? Our Vladimir Ilyich?

Yes, I recognise him.

He gave a very lucid explanation of how he sees the situation in Holland. It suggests to me that there isnt the same sort of housing pressure in the area that he lived/lives in as much of the UK. I know someone who has taken out a mortgage for half a million Euros for two floors of a house in Amsterdam. Mind you, it is two minutes away from the Van Gogh museum, you gotta pay to be near those works of art.

As he correctly said, you can offer a lower rent if you can be sure that the renter is going to remain in the property for a long time. That may explain some of the difference between that and short term rentals.

Problems stack up though, when there is simply not enough property. Like council housing in this country, price at below what the market would, and you get big queues forming. It doesnt sound as if there are any big queues in Holland from his description.

It would be interesting too to know how benefits are organised there. Do they give you a home, or housing benefit like in the UK?

You both make very good points.

First, did you know that the right to basic housing is still written into the Russian constitution? Like education, I believe it is a priority of any country and one of those things that the Soviets excelled at. Soviet Russia had the highest literacy rates in the world . . . still has, statistically in terms of male literacy but only just . . the IMF closed a lot of schools during the dark loan ages of the 90's. 3000 kindergartens went at a stroke with the first tranche.

OK. Most Russians live in awful pre-fab concrete blocks. But then so does everyone else. Here everyone is now going to live in awful, ever-downsized slaveboxes . . . if they're lucky. What's the difference? With affordable basic accommodation, you can actually get a life and make choices.

leicestersq wrote:

It suggests to me that there isnt the same sort of housing pressure in the area that he lived/lives in as much of the UK. I know someone who has taken out a mortgage for half a million Euros for two floors of a house in Amsterdam.

You are correct. I got a really good job in Amsterdam while I was in Brussels . . . all relocation expenses paid . . . but once I moved I found the costs mindbending. The Dutch Government's policy has been a reaction to this. It worked well in a provincial town like Groningen. But it is, as in London, very difficult now to reverse-engineer a situation that has got out of control. Amsterdam is taking a bit longer. I worked in Amsterdam in the 80's too and even then those trendy canalside warehouses were 9 million or so unconverted.

You may not like the idea of regulation or controlled rents, but you can't stop excesses any other way. Everyone here seems to accept the need for it in banking, why not in housing and rental costs? Everyone accepts the need for Telecom and Energy watchdogs . . . ok they do screw all, but the idea is not taboo. Basic rights, like somewhere to live, should be protected.

So why is Dave's housing benefit thingy only dealing with one side of the problem? That won't solve it.

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You both make very good points.

First, did you know that the right to basic housing is still written into the Russian constitution? Like education, I believe it is a priority of any country and one of those things that the Soviets excelled at. Soviet Russia had the highest literacy rates in the world . . . still has, statistically in terms of male literacy but only just . . the IMF closed a lot of schools during the dark loan ages of the 90's. 3000 kindergartens went at a stroke with the first tranche.

OK. Most Russians live in awful pre-fab concrete blocks. But then so does everyone else. Here everyone is now going to live in awful, ever-downsized slaveboxes . . . if they're lucky. What's the difference? With affordable basic accommodation, you can actually get a life and make choices.

leicestersq wrote:

You are correct. I got a really good job in Amsterdam while I was in Brussels . . . all relocation expenses paid . . . but once I moved I found the costs mindbending. The Dutch Government's policy has been a reaction to this. It worked well in a provincial town like Groningen. But it is, as in London, very difficult now to reverse-engineer a situation that has got out of control. Amsterdam is taking a bit longer. I worked in Amsterdam in the 80's too and even then those trendy canalside warehouses were 9 million or so unconverted.

You may not like the idea of regulation or controlled rents, but you can't stop excesses any other way. Everyone here seems to accept the need for it in banking, why not in housing and rental costs? Everyone accepts the need for Telecom and Energy watchdogs . . . ok they do screw all, but the idea is not taboo. Basic rights, like somewhere to live, should be protected.

So why is Dave's housing benefit thingy only dealing with one side of the problem? That won't solve it.

I think you can tell, I like to approach any solution from a market perspective. Markets allocate resources, but they can be brutal.

But is any other solution any better? Lots of land in Russia to build on of course, but little incentive to work hard and innovate, because you rarely got a better life if you did. The dacha's went to the party leaders, not the best workers.

In Zimbabwe, they tried fixing prices. They should have learned from every other attempt, failure, always makes things worse. Try to make prices low, supply shrivels up, demand is way too high, and you get a corrupt system of allocating what there is.

Here in the UK you can see that with council housing. Frank Dobson clearly doesn't merit a three quarters of a million pound apartment for sixty quid a week, but he is allocated one. If I were to offer the council that owns it, a tenner a week more, I would be shown the door, despite the benefit to council tax payers. All social housing is great for those that get it, but terrible overall because of the cost paid by those that don't, and the unfairness of those excluded from it. It only works politically if those paying don't realise they are.

So why should we not let the market sort this out? the best housing would go to those working, learning and saving the hardest on average. Don't we want to encourage such things? At the moment, those paying privately have to pay way more to subsidise others, that is not right.

As another poster said, a citizens wage and a progressive land value tax works. Let's sell off all social housing, end HB, and use these tools instead. Encourage hard work, and empower people through choice and self reliance. I expect that those who would fare worst in such a change, might be the ones that need to change.

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To receive £2000.00 per week HB in central London last year you would have to require a five bedroom property under the LHA rules. This means you would need to have a minimum of four children, but due to the rules about sharing bedrooms and age and gender AND NOTE THAT THESE RULES DO NOT APPLY TO PEOPLE NOT RECEIVING HOUSING BENEFIT it would be more likely that the average household qualifying for that rate had seven or more children. Alternatively the household could comprise five adults or more who each required a bedroom. AGAIN, THESE RULES DO NOT APPLY IN THE NON-HOUSING BENEFIT WORLD.

These kind of households are very uncommon in the UK.

It is very unlikely that anybody receiving Housing Benefit at that rate found the accommodation themselves as they would have required at least a £10,000.00 deposit. More likely they were a household evicted from their former home and placed by the homeless team of the Local Authority in temporary accommodation until a suitable Council property became available.

Local Authorities have a statutory duty to house those who have not made themselves intentionally homeless. It is a very expensive process and due to the lack of social housing a great drain on Local Authority resources. ON TAXPAYERS.

Corrected. I hope that helps.

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Because markets are rigged. Come on, you know that.

in this case, bubbles are particularly pernicious because the housing market seems to be the only market that allows amateurs to get their mittens on eye-watering leverage

and made worse by the fact that the speculative asset is homes

I can see the case for more market intervention, but perhaps on the financial side - to limit leverage - and the planning side - to limit NIMBYISM - if I am to be true to my conservative instincts

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