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Bland Unsight

Renewal Think Tank: Living Rent

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Via the Guardian (more at the link):

Theresa May should oversee a huge revival of government-funded housebuilding by constructing 75,000 homes a year for rent by low-paid workers, according to an influential Tory thinktank.

Under the proposals from Renewal, after two years of paying a “living rent” – no more than a third of the average low pay in a local authority – occupiers would have the option of buying their home.
The scheme would allow low-paid workers to make substantial savings on private sector rents and let them save for a deposit. The thinktank says lack of housing is the UK’s biggest domestic policy challenge.

Source

As my interest in the UK housing bubble has reduced to amusement at the ever worsening fate of high-leverage portfolio landlords I am of course all in favour of this, as it might soften rents a bit in some markets, or fear that it might may prompt a bit of panic selling.

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IF (big if) they do chuck up anywhere close to 75k of these little badboys I make no apologies for saying I'll be camping out all night to be first in the queue for as many as I can lay my hands on.

Below market rents is music to my ears, I'll be the judge of what the local market can bear thank you very much Mrs May. And I know for a fact many of my lot could afford higher rents as it is if I ever feel the need to maintain margins etc.

Based on the amount of booze, takeaways and skytv most of them seem to enjoy etc. and if they can't someone else will gladly take their place I'm sure. Simple supply and demand, innit? Like candy from a baby.

Make no mistake, one way or the other, rents WILL rise.

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What is 'low pay'? Is it based on hourly rate, or annual salary?

For instance, I'm happy to work 7 hours per week instead of 22 @ £30 p/h if it means I pay a much lower rent.

Hell, can I pay myself out of my warchest? Start a little plc, seed fund it myself, pay myself 8k pa for the rest of my life to taking photographs I like. I'll pay the NI on that, qualify for this and live a life of Riley in my proletariat box clearing my steam library in my spare time.

This is like tax credits all over again...stop meddling or beware of unintended consequences.

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More meddling but didn't Brown push up "social" rents towards private rents? Seems that worked out well, if social rents had been left alone rather than continuous increases which naturally funnelled more money to council housing via housing benefit we might now not need a living rent!

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IF (big if) they do chuck up anywhere close to 75k of these little badboys I make no apologies for saying I'll be camping out all night to be first in the queue for as many as I can lay my hands on.

:lol:

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It's the Grauniad. More of the same. Be seen to Do Something, create some more lucky winners at the expense of everyone else. Every time they do it, the cost-per-new-winner goes up, but that's not the Grauniad's concern.

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It's the Grauniad. More of the same. Be seen to Do Something, create some more lucky winners at the expense of everyone else. Every time they do it, the cost-per-new-winner goes up, but that's not the Grauniad's concern.

It's Renewal, a Conservative think tank - http://www.renewalgroup.org.uk/

And if Theresa May is serious with her repeated mantra of "a country that works for everyone" (e.g. this story in the Telegraph http://www.telegraph.co.uk/news/2016/07/13/theresa-mays-pledges-to-fight-injustice-and-make-britain-a-count/)she will have to listen to Renewal and its ilk.

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There's a report Homes For All on the Renewal website that is worth reading:




"This paper argues that housing should be a central priority for the new Government and the new Prime Minister. The European referendum showed that many ‘left-behind’ voters are now rebelling against a system that they believe is no longer delivering for them. This re-emphasised the importance of creating an economy in which everybody feels that they have a genuine stake and an economic and political system that genuinely works for everybody. The alternative is increasing division and disengagement. Tackling the housing crisis for those at the lower end of the income spectrum would be one way of tackling this."


Figure 9: Indicative average savings from a ‘Rent to Buy’ model vs existing private rent18 19


Area: Camden


Region Monthly ‘Conservative Living Rent’ £556


Current average monthly private rent (2 bed) £2,080


Difference between a ‘Conservative Living Rent’ and average private rent, pcm £1,524

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"Building 75,000 new Rent to Buy homes would therefore cost £4.5bn a year. This could be delivered through greater taxes on Buy to Let landlords. The Government has already signalled its willingness to tackle the excesses of Buy to Let and the generous tax breaks many landlords enjoy. Going further would have the benefit of further levelling the currently uneven playing field between Buy to Let landlords and aspiring first time buyers. A scaling up of Rent to Buy could also be partly funded through ring-fencing the receipts from the Chancellor’s recent 3% rise in Stamp Duty on Buy to Let landlords. This money would then be channelled to housing associations on the strict instructions to build these homes" :D:D:D:D:D

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Figure 9: Indicative average savings from a ‘Rent to Buy’ model vs existing private rent18 19

Area: Camden
Region Monthly ‘Conservative Living Rent’ £556
Current average monthly private rent (2 bed) £2,080
Difference between a ‘Conservative Living Rent’ and average private rent, pcm £1,524

Those figures seem to me to show just how out-of-touch the report is.

Relative to pay, £2080 would've been unlikely to get even an HMO room in Camden 1983. A bit further out from central London - and obviously excluding posh or aspiring areas - would be more realistic. If that gets a self-contained flat today then prices have fallen a lot.

Whereas £556 today would be a market rent for a 2-bed flat out here in West Devon (nothing exciting or posh, but perfectly adequate). Introduce a million of those in Camden and you'd unearth demand for another million. Plus another two million who just wouldn't even bother to register because they know they're not priority cases unless they lose their bedsit and get pregnant.

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