Affordable Homes Facing Demolition Because Of Bedroom Tax

[tomandlu]

Affordable homes facing demolition

In a letter to Alison McGovern, the Labour MP for Wirral South, Magenta says one such block of flats will be "emptied with a view to subsequent demolition" because of the inability to let them out, sell them or keep up with the costs of keeping them unlived in.

Yes, if people can't afford the rents, the only option is to knock the houses down. No other option available...

[bomberbrown]

http://en.wikipedia.org/wiki/Washington_Monument_Syndrome

[thombleached]

http://en.wikipedia.org/wiki/Washington_Monument_Syndrome

More like http://en.wikipedia.org/wiki/Wikipedia:Don%27t_throw_your_toys_out_of_the_pram

[@contradevian]

Sure I predicted this on one of the many bedroom tax threads. If anyone thought bedroom tax would bring down rents by freeing up social homes available, think again. Labour/Tory will always ensure that false scarcity in housing prevails.

[The Knimbies who say No]

This would make Milo Mindbender proud. If any better demonstration of the absurdity of UK housing costs exists, I'd like to hear it.

Inability to sell or rent them out. What absolute BS. Just not for the sort of sums that keeps a HA in the manner it is accustomed to perhaps. The housing association should give them away, saving them the demolition costs.

edit

Edited November 10, 2013 by The B.L.T.

[Frank Hovis]

Magenta Living, has admitted that "with changes to welfare benefits there is very little prospect of letting upper three-bedroom maisonettes in the current climate".

In a letter to Alison McGovern, the Labour MP for Wirral South, Magenta says one such block of flats will be "emptied with a view to subsequent demolition" because of the inability to let them out, sell them or keep up with the costs of keeping them unlived in.

Three bedroom flats have always been hard-to-let, they're family-sized but most families (not unreasonably) want a house with a garden, so often in the past they have been let under-occupied in order to get the rent in.

With bedroom tax meaning an end to under-occupation these will have gone from hard-to-let to near-impossible to let.

There aren't many about, it's not what gets built these days.

[Si1]

Three bedroom flats have always been hard-to-let, they're family-sized but most families (not unreasonably) want a house with a garden, so often in the past they have been let under-occupied in order to get the rent in.

With bedroom tax meaning an end to under-occupation these will have gone from hard-to-let to near-impossible to let.

There aren't many about, it's not what gets built these days.

Seems strange tho that with waiting lists for social housing they can't bung families that do need 3 bedrooms in there. Not ideal, but better than a b&b

Or if not that let them out as HMOs. There has to be a market given some imagination

Edited November 10, 2013 by Si1

[Si1]

This would make Milo Mindbender proud. If any better demonstration of the absurdity of UK housing costs exists, I'd like to hear it.

Inability to sell or rent them out. What absolute BS. Just not for the sort of sums that keeps a HA in the manner it is accustomed to perhaps. The housing association should give them away, saving them the demolition costs.

edit

Yes

[Damik]

Three bedroom flats have always been hard-to-let, they're family-sized but most families (not unreasonably) want a house with a garden, so often in the past they have been let under-occupied in order to get the rent in.

With bedroom tax meaning an end to under-occupation these will have gone from hard-to-let to near-impossible to let.

There aren't many about, it's not what gets built these days.

any 3 bedroom flat will rent for £10 pm and it will never rent for £10 000 000 pm

any 3 bedroom flat will sell for £10 and it will never sell for £10 000 000

so perhaps the HA should not play a political game and just reduce the rent or the price

[rockhopper]

why not just brickup the third bedroom door and window ?

Its got to be cheaper than demolition.

I think bomberbrown's washington monument syndrome and thombleached's

toys out of the pram theories are believable explanations ..

[Frank Hovis]

Seems strange tho that with waiting lists for social housing they can't bung families that do need 3 bedrooms in there. Not ideal, but better than a b&b

Or if not that let them out as HMOs. There has to be a market given some imagination

They have a choice, and most choose not to. So you get longer and longer void periods.

any 3 bedroom flat will rent for £10 pm and it will never rent for £10 000 000 pm

any 3 bedroom flat will sell for £10 and it will never sell for £10 000 000

so perhaps the HA should not play a political game and just reduce the rent or the price

Of course it will.

But every property has a net present value. If you have an older, poorly built block (as a lot of the council stock was) then the maintenance bills are high. If you combine high maintenance bills with lower rents then you end up with a negative NPV and it makes sense to demolish and rebuild with a house that will command a higher rent (because people actually want to live in it) and be built to a better standard so require less maintenance.

HAs have always demolished some houses; this has usually been on the basis of sky high maintenance costs. If you add in reduced income then the NPV gets much worse and it becomes a property you want rid of. Either by sale or by demolition and new build.

I'm not saying that this is a non-story but what the bedroom tax will mean in terms of housing stock is that unattractive stock, particularly three (or more) bed flats but also damp properties with structural problems, gets sold / demolished and replaced with property that people actually want to live in.

Is that bad news? I'm not sure that it is.

[SarahBell]

Seems strange tho that with waiting lists for social housing they can't bung families that do need 3 bedrooms in there. Not ideal, but better than a b&b

Or if not that let them out as HMOs. There has to be a market given some imagination

Indeed.

It's clearly nonsense they can't let them out.

There would be a flood of people from the private sector wanting them!

edit: Letting upper floor maisonettes - is a problem if their housing policy states they wno't house families in them.

Manchester have been demolishing their maisonettes all across the city for years cos they are poorly constructed nasties from the 60s.

But blaming it on a tory rule change is always nice for a labour controlled council.

And lets be honest - they are all labour controlled really - the staff are all in unions.

Edited November 10, 2013 by SarahBell

[Damik]

They have a choice, and most choose not to. So you get longer and longer void periods.

Of course it will.

But every property has a net present value. If you have an older, poorly built block (as a lot of the council stock was) then the maintenance bills are high. If you combine high maintenance bills with lower rents then you end up with a negative NPV and it makes sense to demolish and rebuild with a house that will command a higher rent (because people actually want to live in it) and be built to a better standard so require less maintenance.

HAs have always demolished some houses; this has usually been on the basis of sky high maintenance costs. If you add in reduced income then the NPV gets much worse and it becomes a property you want rid of. Either by sale or by demolition and new build.

I'm not saying that this is a non-story but what the bedroom tax will mean in terms of housing stock is that unattractive stock, particularly three (or more) bed flats but also damp properties with structural problems, gets sold / demolished and replaced with property that people actually want to live in.

Is that bad news? I'm not sure that it is.

I am sure that if the HA charge only 50% of the current rent and put it all on the maintenance there would be enough money to repair the building and perhaps even start building a new one

but then their directors would not be able to pay themselves £200k pa or more

one would think that HA should provide some kind of cheap social service ???

[Frank Hovis]

I am sure that if the HA charge only 50% of the current rent and put it all on the maintenance there would be enough money to repair the building and perhaps even start building a new one

but then their directors would not be able to pay themselves £200k pa or more

one would think that HA should provide some kind of cheap social service ???

Sure they can keep it limping on short-term with patch-up maintenance but as soon as there is a major bit of work required like a new roof or something structural then that's demolition time. As these particular ones sound like they're in a block then if major works are around the corner and rents are already down it probably makes sense to plan to demolish and rebuild now.

The social service is in providing good standard properties on subsidised rents.

I agree about the obscene salaries at the top level in some HAs, it's like the BBC.

On the one hand you have this:

One in five housing association employees has taken on a second job to make ends meet, a new survey has revealed.

Research by trade union Unison shows nearly a fifth of people who work for housing associations have experienced a cut in their pay over the last year, with 18 per cent reporting they are more than £10,000 in debt, excluding mortgages.

The poll of 754 housing association staff reveals a growing strain on the workforce, with more than a third reporting ‘poor’ or ‘very poor’ morale. More than half are working longer than their contractual hours, and 19 per cent are working more hours compared with last year.

http://www.insidehousing.co.uk/regulation/one-in-five-housing-staff-has-a-second-job/6529386.article

And on the other:

The board of a small south London landlord which agreed a six-figure payoff for its former chief executive could be asked to pay back some of the package totalling almost £250,000 from their own pockets.

This is one of several options recommended in an independent investigation into Gallions Housing Association’s decision to award Tony Cotter £397,000 for his redundancy.

Carried out by consultancy Campbell Tickell on request of the social housing regulator, the report, seen by Inside Housing, also reveals that Mr Cotter was on ‘garden leave’ from the association since July before he left in September.

The inquiry was triggered by both the board’s decision to make Mr Cotter redundant and the reputational damage the scale of the payoff could inflict on housing associations.

The report alleges that the board may have breached charity laws when agreeing discretionary payments of almost £247,000 which they were not contractually obliged to award.

http://www.insidehousing.co.uk/careers/gallions-board-may-have-to-stump-up-for-payoff/6529383.article

[billybong]

McGovern said the government's welfare policy was failing on its own criteria of success: "The rhetoric coming from the government was that the bedroom tax was about cutting down the housing waiting list. But if that is the case why have we got empty homes in the Wirral? It simply hasn't worked."

Isn't it working exactly as intended? In fact wasn't it one of the purposes of the policy - to free up space?

If people are expected to move into smaller accommodation isn't there going to be a stage when the larger properties with more bedrooms are empty.

In some areas it was always going to have the problem of extra space at some stage.

The "problem" also seems to suggest that, at least in the areas affected, there is no overall shortage of property - but likely there will be if they demolish the spare stuff.

McGovern sounds like the spanner to spur the next (likely?) stage - demolition, sell the land and then for cronies to build private sector housing.

Edited November 10, 2013 by billybong

[gf3]

any 3 bedroom flat will sell for £10 and it will never sell for £10 000 000

Not sure about that

http://www.zoopla.co.uk/new-homes/details/30920642?search_identifier=4bde5b63c5456fba967e33b7a14ca053

[MattW]

Seems strange tho that with waiting lists for social housing they can't bung families that do need 3 bedrooms in there. Not ideal, but better than a b&b

Or if not that let them out as HMOs. There has to be a market given some imagination

Agreed. The Housing Association could even rent these out on a private AST basis if families on waiting lists aren't interested in them. This is how I'm renting my flat.

why not just brickup the third bedroom door and window ?

Its got to be cheaper than demolition.

Or get rid of the 3rd bedroom completely and increase the size of the 2 other bedrooms (if feasible)?

[SarahBell]

Agreed. The Housing Association could even rent these out on a private AST basis if families on waiting lists aren't interested in them. This is how I'm renting my flat.

Or get rid of the 3rd bedroom completely and increase the size of the 2 other bedrooms (if feasible)?

They could rent them out as is.

It's how they manage their waiting lists that's the issue.

Do they really have no people living in B&B or overcrowded accomodation?

[alexw]

They could rent them out as is.

It's how they manage their waiting lists that's the issue.

Do they really have no people living in B&B or overcrowded accomodation?

I'm sure they do. But if any of those families accepted these flats they'd be stuck there, since they'd now be housed and so drop to the bottom of the list.

It just would not make sense for them to accept even if their current accommodation is worse.

As mad as it sounds it would make more sense to wait for a house with garden to become available.

Edited November 10, 2013 by alexw

[SarahBell]

As mad as it sounds it would make more sense to wait for a house with garden to become available.

By which time their kids will have left home and they'll only be eligible for a one bedroom place...

The answer isn't to leave properties empty.

HMO them if needs be.

Take them off HA who can't let them.

[wonderpup]

Do they really have no people living in B&B or overcrowded accomodation?

Many people will not take a flat or house that is defined as larger than their needs due to a recent innovation by government that means you are charged for rooms you do not need- what we call 'the bedroom tax'. This impacts even families with children in some cases as depending on the ages and sexes involved they will be deemed to be able to share a room rather than needing a separate one.

So we end up with the comical situation where families are trapped living in single room B&B's while three bedroom flats cannot be let as social housing because the people who need more space can't quite meet the criteria for inhabiting that space without incurring a financial penalty they cannot afford to pay.

This nonsense was brought to us by the people who make a serious claim to be able to govern the country- in reality they cannot even manage to foresee the entirely predictable outcome of their own ideologically driven policies. And let's not even talk about Universal Credit- another triumph of social welfare innovation- or not.

[Goat]

So, reading between the lines, these are the HA's oldest and s***iest properties that in a free market would've been pulled down years ago.

The flats have been economically viable because the HA has been able to let them to people who have no need for 3 bedrooms but were able to pay the 3 bed rent thanks to the generosity of the HB system.

Now that HB has been reformed so that the benefit is now related to the actual need they've lost their supply of singles able to pay the 3 bed rent and willing to sacrifice the poor quality for the extra space.

Families with an actual need for the space won't live there because they're s***holes and moving in would eliminate their chance of ever gettting a decent property, the private sector isn't interested because it's their money and they'd rather spend it on something smaller but better.

So the HA is annoyed because their nice stream of income from dilapidated 1960s council stock is drying up and rather than getting rich by giving crap oversized housing to people who don't need the space they're going to have to spend money rebuiiding the places into something that people actually want.

Crap oversized housing demolished and replaced with more and better quality stock that people might actually want to live in, sounds like the policy is achieving exactly what it should.

[Frank Hovis]

So, reading between the lines, these are the HA's oldest and s***iest properties that in a free market would've been pulled down years ago.

The flats have been economically viable because the HA has been able to let them to people who have no need for 3 bedrooms but were able to pay the 3 bed rent thanks to the generosity of the HB system.

Now that HB has been reformed so that the benefit is now related to the actual need they've lost their supply of singles able to pay the 3 bed rent and willing to sacrifice the poor quality for the extra space.

Families with an actual need for the space won't live there because they're s***holes and moving in would eliminate their chance of ever gettting a decent property, the private sector isn't interested because it's their money and they'd rather spend it on something smaller but better.

So the HA is annoyed because their nice stream of income from dilapidated 1960s council stock is drying up and rather than getting rich by giving crap oversized housing to people who don't need the space they're going to have to spend money rebuiiding the places into something that people actually want.

Crap oversized housing demolished and replaced with more and better quality stock that people might actually want to live in, sounds like the policy is achieving exactly what it should.

Yes, that's a good summary.

It's too balanced and sensible for a newspaper story though.

[wonderpup]

Families with an actual need for the space won't live there because they're s***holes and moving in would eliminate their chance of ever gettting a decent property,

Maybe in some cases this is true- but in other cases their need for space does not quite match the extra space they would gain- leading to a bedroom tax charge they cannot afford.

The rules on occupancy under housing benefit are quite precise regarding at what age children can no longer share a bedroom ect- so the number of families that might be a good fit with a three bedroom place may be quite low.

What the bedroom tax has done is introduce a whole new strategic dynamic into the mix- so it's no longer a case of do you need more space- it's a case of can you afford to pay the cost of additional space that the system says that you don't technically need- and for many people the answer to that is no.

So they will stay in their affordable B&B single room rather than move into a bigger place they can not afford.

[gf3]

As mad as it sounds it would make more sense to wait for a house with garden to become available.

Ahhh yes

What we really need is a garden tax