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High Earners Living In Council Houses Will Be Forced To Pay Market Rates Rent Under New Plans

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http://www.express.co.uk/news/sunday/588907/High-earners-council-houses-forced-to-pay-rent

George Osborne is likely to announce in Wednesday’s Budget that those on incomes above £40,000 in London and £30,000 in the rest of England who live in local authority or housing association homes will be charged a “market or near market rent” from 2017/18.

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you get what you voted for. thought high earners where those paying the 45p tax band £150,000 a year.not the lower band.

Edited by crash2006

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Shock horror! I have to pay for the stuff I use.... How outrageous!

The only 'victims' are the ones suckling on the governments pert little titties. Like little engorged piglets getting fat off other peoples work. Suck Suck.... Yeah suck it all in, but it comes at a price!

Oink, oink, squeeeeeeeeel!

Edited by XswampyX

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Why are such high earners in social housing anyway?

I would have thought a rule banning them from occupation once they move to say a higher tax band would be more productive. These people can afford to buy and it would free up social housing for those who need it.

I lived in London until 2007 and managed to buy a house and pay down the mortgage on earnings quite a way under the 40% tax rate. I was never a drag on the exchequer for housing costs....

Yet I paid tax which by the sounds of it went to people who earned a lot more than I did so they could pay the rent on their social housing. :blink:

I also wonder if this will have any effect on the huge sub letting problem which exists in the capital. Another nice little earner for the some scrotes that one

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Then the tenant should exercise the Right To Buy option.

Why pay "market rate" when you can buy the property at a discount?

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Then the tenant should exercise the Right To Buy option.

Why pay "market rate" when you can buy the property at a discount?

Heh. That bubble won't keep expanding by itself...

You have to hand it to Osborne. Few of us thought he could keep the Brown hpi going (or even restart it) but he's shown a master touch in inflation... Now even many here believe he can keep hpi going. Different this time you see!

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Then the tenant should exercise the Right To Buy option.

Why pay "market rate" when you can buy the property at a discount?

Also the "market rate" price won't be til 2017/18 - plenty of time to buy your discounted HA property.

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Well that's codswallop then!

"The move will build on the steps taken over the last five years that enabled housing associations and local authorities to charge market rents to those on those with incomes of more than £60,000."

Not one single LA or HA has asked its tenants to disclose what they earn. No one has begun charging 'market rates' based on pay differentials.

It just ain't going to happen folks!

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Very clever, this will force them to buy the property via the discount. Make the rent more expensive than a mortgage and it makes buying the property that much more attractive.

Although how many people earning these figures live in council or housing association properties?

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high earners forced to pay tax instead would be nice.

Or how about Right to Buyers forced to pay market price for taxpayer owned homes.

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Likely effects of this policy:

More people will exercise right-to-buy, as in many cases it may work out cheaper to pay a mortgage rather than market rent. Tinkering with council tenancies also weakens their percieved security, encouraging those who can buy to buy rather than living at the whim of the government of the day.

Some who cannot afford to buy or pay market rent will have to move out of the property, allowing it to be sold on the open market to fund the right-to-buy discounts for housing association properties.

People living in council houses will be discouraged from seeking to better themselves by improving their employment situation in order to avoid being caught by the cap. Better to stay on benefits or in low-skilled, low-paid work.

Edited by subspace

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Sounds fair enough, until you actually go look at how ridiculous 'market rents' have gotten. If rents were half what they are now then no-one would need a subsidy.

There is no market in rents - it's all propped up by government money.

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Those earning 60k+ were already paying market rent for social and HA properties. The threshold will now be reduced to 40k+ in London and 30K+ outside London.

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This demonstrates that govt thinking/policy is either very confused (High earners to pays higher rent VS selling off of social/housing association housing) OR they are manipulating the market...I think it is the latter:-

One, 'Force out' high earners into private rental sector and use their spare capacity for those who are on HB.

Two, bring in law that relates 'right-to-buy' discount to earnings....basically those who are on HB wont get a mortgage and so wont be able to buy, those who can afford to buy will not get a decent discount and so would prefer not to buy on a council estate.

Three, hope that after HA forced sell-off they (HA) will rebuild with the money and then take a similar line.

Result...increase social housing without need to rebuilt AND reduced costs of HB as more on HB will have access to social housing....a two-tier rental system AND an increase demand for house buying created by those current high earners currently 'sitting' in social housing.

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I really don't know where to start with this proposed policy?

Firstly, Council/HA rents are NOT subsidised! They are ring-fenced, at cost, not for profit. When will people realise this? The 'market' rent rate is the same PLUS, the landlords profit margin!!

Stupidly, there are shared ownership schemes in London where the MINIMUM salary you need to earn in order to qualify is £80k PA. Where does this fit in with the logic of £40k high earners in no need of 'government assistance' yet if you earn £80k you still need a help to get on the housing ladder.

Would this rent tax (for that's what it really is) be progressive? i.e. Would a person on £39,950 PA be at a disadvantage taking a promotion/overtime at work to salary £40,005 thus taking their rent from an arbitrary £200 a week to £500?

I fall into this category with my salary being more than £40 (but less than £50k) and live in a HA I bed flat, but neither do I qualify for RTB (I wouldn't buy it even if I could - for other reasons I have stated in previous posts) and if ever there was a reason for wanting to go down to a 4 day week, for me this would be it.

If property prices/rent prices weren't so artificially high in this country, people would be naturally incentivised to move out of council tower blocks/slums rather than penalised for the 'privilege'.

This year was the second general election that I did not vote conservative (2010 & 2015) and I feel SO GOOD about myself for this.

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I really don't know where to start with this proposed policy?

Firstly, Council/HA rents are NOT subsidised! They are ring-fenced, at cost, not for profit. When will people realise this? The 'market' rent rate is the same PLUS, the landlords profit margin!!

Stupidly, there are shared ownership schemes in London where the MINIMUM salary you need to earn in order to qualify is £80k PA. Where does this fit in with the logic of £40k high earners in no need of 'government assistance' yet if you earn £80k you still need a help to get on the housing ladder.

Would this rent tax (for that's what it really is) be progressive? i.e. Would a person on £39,950 PA be at a disadvantage taking a promotion/overtime at work to salary £40,005 thus taking their rent from an arbitrary £200 a week to £500?

I fall into this category with my salary being more than £40 (but less than £50k) and live in a HA I bed flat, but neither do I qualify for RTB (I wouldn't buy it even if I could - for other reasons I have stated in previous posts) and if ever there was a reason for wanting to go down to a 4 day week, for me this would be it.

If property prices/rent prices weren't so artificially high in this country, people would be naturally incentivised to move out of council tower blocks/slums rather than penalised for the 'privilege'.

This year was the second general election that I did not vote conservative (2010 & 2015) and I feel SO GOOD about myself for this.

I hate to burst your bubble, but if you're being given something at cost price, that would cost you more in the open market, then you`re being subsidised.

Of course the market itself is rigged which has kept "market rate" artificially high :)

Edit to add: I wish the government would stop "picking winners", and just leave the whole mess to collapse and restructure itself.

Edited by SpectrumFX

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I now firmly believe that the government is here to maintain a particular economic speed, not to make it "as good as possible". Things become a lot clearer if you accept this. The "why" of this doesn't matter. It just matters to know that the government are seeking to hold a particular economic speed and the best way to put a brake on the economy is via increasing the cost of living for essentials.

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I really don't know where to start with this proposed policy?

Firstly, Council/HA rents are NOT subsidised! They are ring-fenced, at cost, not for profit. When will people realise this? The 'market' rent rate is the same PLUS, the landlords profit margin!! ...

Despite the hpc moniker much opinion here is as blinkered as anywhere else. If people want cheaper housing then 'social' is a solution (because private is never going to be mutually beneficial given our land and property rights system). If people don't then as you were.

Wadsworth - Economic Myths: Social housing in the UK is subsidised by the taxpayer

First...social housing is a break even; the rents paid by the one-third of tenants who are not claiming HB or CTB covers the full cost. The rent and Council Tax nominally demanded from claimant households is meaningless as it is equal and opposite to the HB and CTB nominally paid out ... On the other hand, the cost to the taxpayer of paying for claimants in the private rented sector is enormous.

PRC+v+S.png

Secondly...paying tenants in social housing pay about twice as much in tax (counting everything you pay to the government over and above the cost of services provided in return as tax) as owner-occupier households. They are not subsidised by the taxpayer; they are the ones effectively paying for the social housing for the other 3.0 million, and they don't get any tasty tax-free capital gains, interest rate subsidies and so on.

OO+v+PRN+v+SHN.png

Third...The ones who are being shafted are paying tenants in the private rented sector, on top of the £2,000 in housing and wealth taxes they pay each year, they pay on average £8,000 a year in rent, which exceeds the costs of providing that accommodation by £5,000 a year - so they are paying directly in cash for their landlords to scoop up £5,000 of national wealth each year for nothing in return.

Finally...the Homeys (Homeowners) then wail about paying tenants in the social sector paying "below market rents". What the Homeys really mean is that these tenants shouldn't just pay for the bricks and mortar running costs (which they are clearly paying two or three times over), but they should also pay for the "location rent" on top of that. But when invited to do the same (i.e. to pay LVT on their own homes instead of paying taxes on their earned income), the Homeys politely decline.

Edited by northshore

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I hate to burst your bubble, but if you're being given something at cost price, that would cost you more in the open market, then you`re being subsidised.

We clearly have different definitions of what constitutes a subsidy. I'm currently receiving neither a cash payment or tax reduction by the government. In fact, they're contemplating the opposite!

http://www.investopedia.com/terms/s/subsidy.asp

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