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fru-gal

London Council Sets Up As Private Landlord

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http://www.theguardian.com/money/2015/sep/16/london-council-sets-up-as-private-landlord?

The homes are being let out at 80% of market rent, but will still produce a surplus for the council. Two bedroom flats will be available for £940, almost half of what it would cost in neighbouring boroughs such as Hackney where the median rent for a two-bedder is £1,700.
The council aims to get 1,000 flats in its private rental scheme over the the next three years.
Edited by fru-gal

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Maybe a step in the right direction. At least tenants will have greater security of tenure to some degree as the council will not turf tenants out on a whim unlike speculating amateur landlords.

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Maybe a step in the right direction. At least tenants will have greater security of tenure to some degree as the council will not turf tenants out on a whim unlike speculating amateur landlords.

5 yr tenancies in fact

A good thing

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5 yr tenancies in fact

A good thing

now THAT could get interesting.

council does free market forces.

..decides to offer better quality housing+housing conditions for less money than private landlord.

private landlord now has to raise their game and compete on cost/quality to survive.

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council does free market forces.

..decides to offer better quality housing+housing conditions for less money than private landlord.

private landlord now has to raise their game and compete on cost/quality to survive.

Finally it looks like private landlords will face tough competition!

BRING IT ON!!!

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Its perhaps worth remembering that Barking and Dagenham was one of the homes of mass council house building.

In the 1930s - in just a few years - the London County Council built the Becontree estate which was the largest social housing development in western Europe for decades. All good quality solid homes and well built.

I applaud the council for its efforts - but given its forecast to have the biggest population growth of any local authority area in the next 30 years (cos its cheap) a few hundred homes is a drop in the ocean.

Shame we cannot use the models we used in the 30s and 50s to deliver the homes needed - but that was when the country was run for the benefit of ordinary people and not bankers, developers and big corporates.

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Wouldn't this also push rents down? If the council PRS homes are 80% of market rents then once there is enough of them they start to set the market price surely and this would continually push rents down (or is this wishful thinking?).

Edited by fru-gal

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Wouldn't this also push rents down? If the council PRS homes are 80% of market rents then once there is enough of them they start to set the market price surely and this would continually push rents down (or is this wishful thinking?).

Potentially - but this is 144 flats costing £45m million. As has been pointed out that is £312,000 per flat - which is actually way above the average house price in the borough where the vast majority of homes are houses. Seems a very poor deal - you can buy 'luxury' 2 bed flats in Barkng town centre (near the tube) for £250k. Even houses are still available for less than £300k

http://www.rightmove.co.uk/property-for-sale/property-51724423.html

Now maybe £312k will be the norm in 5 years there - but its actually above current market price.

Is this sustainable for councils with constrained budgets - and is it even their role to provide subsidised housing for people on triple local average median earnings?

Edited by MARTINX9

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Shame we cannot use the models we used in the 30s and 50s to deliver the homes needed - but that was when the country was run for the benefit of ordinary people and not bankers, developers and big corporates.

There is a vast 1950s housing estate in SW15, by Putney Heath. The flats are relatively spacious, certainly compared with the vast majority of new builds, all with balconies, and there is a large amount of green space, trees, etc., around the blocks. A while ago I met a woman who had bought hers under RTB - to be fair she had lived there from a young child - the family had been moved there when the flats were new, from what she freely admitted was a slum in Battersea. She said it was winter when they moved in, there was snow on the ground - they thought they had come to fairyland, and to have a modern kitchen and a whole, proper bathroom indoors, was amazing.

Very close to this estate is the latest development - 9 'luxury' family houses on what was presumably part of someone's huge garden, priced at anything IIRC from about £2.5M up. It might even be £3M+.

Changing times indeed...

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just about right for a council isn't it?

it presumably owns some land on which it could build

instead it buys a whole block from a developer - a move that one might think would attract a discount, but no - the council pays a premium to local average house prices in the deal

and then rents it at below market rent (which is OK)

all on the back of a subsidised loan from the european development bank, the terms of and fees associated with I would be interested to have a look at

I like the idea, but the execution seems open to question

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There is a vast 1950s housing estate in SW15, by Putney Heath. The flats are relatively spacious, certainly compared with the vast majority of new builds, all with balconies, and there is a large amount of green space, trees, etc., around the blocks.

Having grown up on a post war housing estate I concur that these types of homes are very spacious indeed. :) This is what needs to be built now - not slave boxes with a row of kitchen cabinets and white goods along one wall of the living room.

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just about right for a council isn't it?

it presumably owns some land on which it could build

instead it buys a whole block from a developer - a move that one might think would attract a discount, but no - the council pays a premium to local average house prices in the deal

and then rents it at below market rent (which is OK)

all on the back of a subsidised loan from the european development bank, the terms of and fees associated with I would be interested to have a look at

I like the idea, but the execution seems open to question

The cynic might ask who the developer shook hands with.

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£45m for 144 flats = £312,500 per flat

Surely the council could have had a block built for it for far less?

Perhaps that figure includes maintenance for [n years] (provided the developer doesn't do a runner)?

How is the Grauniad's claimed surplus on overpriced flats from today's heirs to Poulson and T Dan Smith calculated? I suspect it might be based on zero-interest, zero-repayments, and zero-maintenance after the initial contract period. When that runs out and the scheme goes bust works nicely in not-on-my-watch terms and becomes the problem of future councillors.

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just about right for a council isn't it?

it presumably owns some land on which it could build

instead it buys a whole block from a developer - a move that one might think would attract a discount, but no - the council pays a premium to local average house prices in the deal

and then rents it at below market rent (which is OK)

all on the back of a subsidised loan from the european development bank, the terms of and fees associated with I would be interested to have a look at

I like the idea, but the execution seems open to question

It is other people's money so they don't care.

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just about right for a council isn't it?

it presumably owns some land on which it could build

instead it buys a whole block from a developer - a move that one might think would attract a discount, but no - the council pays a premium to local average house prices in the deal

and then rents it at below market rent (which is OK)

all on the back of a subsidised loan from the european development bank, the terms of and fees associated with I would be interested to have a look at

I like the idea, but the execution seems open to question

Indeed - bid up local prices and then offer subsidised rent :blink:

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Blimey.

Are some of you youngsters waking up to the fact state house building is actually one of those "good" socialist things?

Bring it on.

Build build build.

I owe much of my entire life (and ability to own privately) to state house building in post WW2 Britain.

It benefitted my generation (I'm late 60s now) HUGELY even when we didn't actually live in it ourselves.

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Blimey.

Are some of you youngsters waking up to the fact state house building is actually one of those "good" socialist things?

Bring it on.

Build build build.

I owe much of my entire life (and ability to own privately) to state house building in post WW2 Britain.

It benefitted my generation (I'm late 60s now) HUGELY even when we didn't actually live in it ourselves.

I am not so sure. I live in a privately built house from 1890s and have seen many state build flats demolished. I know this is not a perfect argument but I would love to know how long privately built homes and state built homes last on average from the date of their construction.

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now THAT could get interesting.

council does free market forces.

..decides to offer better quality housing+housing conditions for less money than private landlord.

private landlord now has to raise their game and compete on cost/quality to survive.

How hard was that? Not very. It's about time landlords were forced to be competitive. Hopefully this will set a trend. :P:lol::lol::lol:

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How hard was that? Not very. It's about time landlords were forced to be competitive. Hopefully this will set a trend. :P:lol::lol::lol:

dead easy for the council to use taxpayers' money to pay 30% over the odds for the flats to then rent them out at 20% below market value....

as I said before, I think the idea has legs, but the implementation in this particular case looks to have been very poorly executed

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Finally it looks like private landlords will face tough competition!

BRING IT ON!!!

Landlords aren't businesses. They do not face competition.

When the council bought houses it got rid of existing landlords, or it made some new tenants. Either way, remaining landlords are not affected.

Edited by BuyToLeech

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