A Question On Housing Benefit.

[wonderpup]

Ok- I am being provocative here- but also genuinely interested to get people's views on this:

Since most housing benefit is going to private landlords- most of whom are middle class- is it not true to say that in reality all that is happening here is that some middle class taxpayers are subsidising the living standards of other middle class taxpayers?

So those who seem so enraged at the very idea of cheap subsidised housing for the poor should in fact be demanding more of it, since it would be a cheaper option than the current one in which they pay taxes to ensure their neighbours Buy to Let remains in the black.

Let the lynching commence

[Butthead]

You're right on your diagnosis of the problem and I wouldn't say it's a particularly "trolling" viewpoint. It's been said on HPC lots of times.

I don't agree with your solution though. The solution is to stop paying housing benefit, that doesn't mean the government needs to provide alternative housing. Instead it just needs to stop preventing the provision of alternative housing (i.e. stop ridiculous planning laws, impose LTV etc).

[(Blizzard)]

Ok- I am being provocative here- but also genuinely interested to get people's views on this:

Since most housing benefit is going to private landlords- most of whom are middle class- is it not true to say that in reality all that is happening here is that some middle class taxpayers are subsidising the living standards of other middle class taxpayers?

So those who seem so enraged at the very idea of cheap subsidised housing for the poor should in fact be demanding more of it, since it would be a cheaper option than the current one in which they pay taxes to ensure their neighbours Buy to Let remains in the black.

Let the lynching commence

Er, yes.

There no advantage to privatising council housing, because land operates as a series of monopolies.

It is not a competitive market.

Privatisation works when there is competition, otherwise democratic control is better than private monopoly.

[Blue Peter]

Ok- I am being provocative here- but also genuinely interested to get people's views on this:

Since most housing benefit is going to private landlords- most of whom are middle class- is it not true to say that in reality all that is happening here is that some middle class taxpayers are subsidising the living standards of other middle class taxpayers?

But taxes are supposed to be paying for the public goods (legal system, police, roads, NHS, etc.) which it is more efficient to do generally, not subsidizing a particular section of society,

Peter.

[SarahBell]

If we had much much more social housing then private landlord rents would lower until they were about the same. And this would deflate the house prices.

Every £1 spent on rent is a £1 less to spend elsewhere in the economy by that person.

A massive social housing building program would ensure a kickstart to the building sector too and all the associated aspects of the economy.

[MongerOfDoom]

You're right on your diagnosis of the problem and I wouldn't say it's a particularly "trolling" viewpoint. It's been said on HPC lots of times.

It has. But that doesn't make it right.

I am middle class, so perhaps I am getting some of that "subsidy". No, can't find it, except on the tax return. But the sign is wrong. It must be because I don't have a BTL. OK, being middle class I can afford to buy one, and then I'll get the subsidy. Errm, no. Turns out the rent does not cover the mortgage. Maybe if I had a BTL before housing benefit existed, I'd be a subsidy for me. Or a house. Or some land with planning permission. Yes, that would have worked, it's just that I am decades late to the party.

So the reason that the middle class don't object to HB cuts is simply that they don't benefit from it nearly as much as the underclass. And they get the whole bill.

But maybe someone benefits other than the people who get free housing. It's whoever benefits from high property prices. I am pretty sure it's not the middle class, and especially not the middle class taxpayers who still have 20+ years to go before finding out they are the first generation not to get a meaningful state pension.

[happy_renting]

It has. But that doesn't make it right.

I am middle class, so perhaps I am getting some of that "subsidy". No, can't find it, except on the tax return. But the sign is wrong. It must be because I don't have a BTL. OK, being middle class I can afford to buy one, and then I'll get the subsidy. Errm, no. Turns out the rent does not cover the mortgage. Maybe if I had a BTL before housing benefit existed, I'd be a subsidy for me. Or a house. Or some land with planning permission. Yes, that would have worked, it's just that I am decades late to the party.

So the reason that the middle class don't object to HB cuts is simply that they don't benefit from it nearly as much as the underclass. And they get the whole bill.

But maybe someone benefits other than the people who get free housing. It's whoever benefits from high property prices. I am pretty sure it's not the middle class, and especially not the middle class taxpayers who still have 20+ years to go before finding out they are the first generation not to get a meaningful state pension.

Bt their home is their pension! All they have to do when they retire is sell it and live on the streets!

[goldbug9999]

They should scrap HB and spend the 20 billion a year building new social housing.

[goldbug9999]

They should scrap HB and spend the 20 billion a year building new social housing.

... which at around say 40k for a modest house (which is plenty when your building on a large scale) would equate to 1/2 million houses.

[alexw]

If we had much much more social housing then private landlord rents would lower until they were about the same. And this would deflate the house prices.

Every £1 spent on rent is a £1 less to spend elsewhere in the economy by that person.

A massive social housing building program would ensure a kickstart to the building sector too and all the associated aspects of the economy.

But that would screw up the nimby's views of beautiful countryside cabbage and potato plants. It'd also make it impossible for them to use their homes to fund a 10 year vacation. So it'll never happen.

Edited April 21, 2013 by alexw

[(Blizzard)]

It has. But that doesn't make it right.

I am middle class, so perhaps I am getting some of that "subsidy". No, can't find it, except on the tax return. But the sign is wrong. It must be because I don't have a BTL. OK, being middle class I can afford to buy one, and then I'll get the subsidy. Errm, no. Turns out the rent does not cover the mortgage. Maybe if I had a BTL before housing benefit existed, I'd be a subsidy for me. Or a house. Or some land with planning permission. Yes, that would have worked, it's just that I am decades late to the party.

So the reason that the middle class don't object to HB cuts is simply that they don't benefit from it nearly as much as the underclass. And they get the whole bill.

But maybe someone benefits other than the people who get free housing. It's whoever benefits from high property prices. I am pretty sure it's not the middle class, and especially not the middle class taxpayers who still have 20+ years to go before finding out they are the first generation not to get a meaningful state pension.

That's a very odd reading of the OP though.

It's obviously not all middle class people who benefit from BTL. I sure as hell don't.

Point is, it isn't the benefit claimants either.

Privatising council housing, which is what housing benefit is, has been an unmitigated disaster for everyone except the landowners getting the handout.

Edited April 21, 2013 by (Blizzard)

[alexw]

They should scrap HB and spend the 20 billion a year building new social housing.

Scrapping HB would have been completely impossible politically.

But.....

THIS is what they should have spent quantitative easing on. It almost certainly would not have been inflationary either, since new money would have been matched with economic activity, with lots of other societal benefits. Lower rents, lower house prices, reduced unemployment, substantially lower HB bills, etc, etc.

Edited April 21, 2013 by alexw

[gf3]

They should scrap HB and spend the 20 billion a year building new social housing.

Agreed

But I think may be housing should perhaps be given for two years the same as SMI. Two years to get anoher job.

[SarahBell]

... which at around say 40k for a modest house (which is plenty when your building on a large scale) would equate to 1/2 million houses.

And next year another 1/2 million.

[Confusion of VIs]

... which at around say 40k for a modest house (which is plenty when your building on a large scale) would equate to 1/2 million houses.

I am afraid the days of 40k houses have long gone, I looked at self build last year and to build a modern energy efficient house, under current building regs, you are looking at £110k minimum (ignoring the cost of the land) add in the builders profits its about £140k add in councils tax rakes offs for "infrastructure" and you are at £170.

[sombreroloco]

They should scrap all welfare benefits and give all the money to the honest and hardworking bank executives, who are the backbone of the glorious <insert country here>.

Edited April 21, 2013 by sombreroloco

[southall]

I am afraid the days of 40k houses have long gone, I looked at self build last year and to build a modern energy efficient house, under current building regs, you are looking at £110k minimum (ignoring the cost of the land) add in the builders profits its about £140k add in councils tax rakes offs for "infrastructure" and you are at £170.

And the average price in the uk is £163K including land.

163K was overpriced in the 2005 when prices were going up.

But 163K doesnt seem so overpriced 8 years later. your figures confirm this.

[wonderpup]

So the reason that the middle class don't object to HB cuts is simply that they don't benefit from it nearly as much as the underclass. And they get the whole bill.

If there's a bill to be paid there must be someone on the other end getting that money- right? So the tax you pay for housing benefit is being delivered to your neighbour to fund his BTL income.

Certainly the underclass benefit from having somewhere to live but the financial benefit is going to the people who own the houses. And most BTL houses are owned by middle class people- so all that's happening here is a transfer of money from some middle class people to some other middle class people- from those who don't own a BTL to some of those who do.

So not only are people paying rent to their landlords- they are also supporting other landlords via the Housing Benefit system.

[goldbug9999]

I am afraid the days of 40k houses have long gone, I looked at self build last year and to build a modern energy efficient house, under current building regs, you are looking at £110k minimum (ignoring the cost of the land) add in the builders profits its about £140k add in councils tax rakes offs for "infrastructure" and you are at £170.

Theres a big difference between a one-off house at retail building rates and building several hundred (or thousand) at once.