Thursday, October 1, 2009

Sounds perfectly fair to me!

‘Tories will quadruple council rent’

Council house rents would quadruple under a Conservative government, a union leader warned yesterday. Unite deputy general secretary Jack Dromey said housing would be one of the areas hardest hit by Tories. He said they were studying plans by Hammersmith and Fulham council to raise rents to “market levels”. “It would mean a two-bedroom council flat that currently costs £85 a week would go up to £380 a week,’’ said Mr Dromey.

Posted by drewster @ 04:11 AM (1741 views)
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29 thoughts on “Sounds perfectly fair to me!

  • mark wadsworth says:

    That sounds fair enough to me as well, provided that they build a bit more social housing further out for those that really can only afford £85.

    But what you really have to think about is Housing Benefit – what’s the point in one branch of The State (the local council) jacking up the rent and the out of work then just claiming an additional £295 in HB from another branch (the DWP)? The result would be is that the out of work can afford to stay in that block, but lower earners who don’t qualify for HB would be forced out.

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  • So whilst there are waiting lists of 3 or more years for council houses, with private landlords getting housing benefits from the councils, there are council tenants who can afford to pay £380 a week. It’s a disgrace, those unfortunate people on benefits should have a right to state housing, and those who can afford it should be forced into the private rental sector. This is a step in the right direction. I’m not sure, but don’t people on benefits have there rent paid for them? if so, then the £380 weekly rent will not be an issue.

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  • phdinbubbles says:

    Sorry to intrude on your post with something completely irrelevant Drewster, but…. where are the Nationwide stats for September? They haven’t released their house price index on a day that doesn’t begin with the letter T since Wednesday 30th April 2008. Are we going to have to wait until Tuesday of next week or can we expect a counter-trend move tomorrow or Monday? Or are they just teasing us and releasing them later than the usual 7:00am embargo time?

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  • phdinbubbles says:

    erratum: May 2009’s figures were released on a Friday, but that’s the only month since April 2008. I need to go to work and do something more useful.

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  • mark w,

    It makes perfect sense from the council’s point-of-view: they get more money while passing the tab onto central government. This allows them to lower the council tax, which the councillors hope will get them re-elected.

    I agree that it would be bad locally & socially to have estates full of unemployed; but if they are disabled or elderly then it’s not such a problem. Besides, the same poverty trap already exists for people on benefits living in private rented housing.

    With the low wage earners forced out of inner London, companies might have to actually pay cleaners a decent wage. More likely though is that they’ll continue to rely on cheap migrant workers who don’t mind living six-to-a-room.

    Hopefully by passing the bill onto the DWP, it will raise the issue onto the radar of Westminster politicians. They actually have the power to do something about it.

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  • Incidentally, the article quotes £380 a week for a two-bedroom flat, but the Local Housing Allowance is just £300 a week for Hammersmith & Fulham.

    For comparison here are some Local Housing Allowance figures from around the country, for a two-bedroom property per week:
    – Central London: £495
    – Inner South West London: £300
    – North West London: £220
    – Outer East London: £200
    – Crawley: £183
    – Southampton: £155
    – Swindon: £132
    – Peterborough: £120
    – Black Country (Wolverhampton): £110
    – East Lancs (Blackburn): £90
    – South Wales Valleys: £86
    – West Pennine (Burnley): £85

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  • where I live in London there are 100’s of people that live in the private rented sector, where their rents are paid by the governement. In Kingston upon Thames the allowance for a 2 bed flat is £1100 a month. Most immingrants claim this and work full time as well, plus sub let their living room for a bed in the evening. Most can save up a deposit in their home country off the back of this and because its so easy don’t even think it is illegal.

    Because my wife is a foreign national she meets a lot of such people and is staggered and angry that they get away with it. However, if these people didnt claim and just worked full time on low wages, they wouldnt be able to afford to pay the rent and food, council tax, etc. So as we know the wider issue is housing and the cost of running housing. All housing is too expensive from the housing you buy to the housing your rent and because of it it has created anomomolies all over the economy that dont exisit in a lot of ther parts of the world

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  • So let me get this right, some HPCer’s think paying over the oods for a home is wrong but for a council home rent that’s just fine and

    dandy. The words losing the plot springs to mind.

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  • it_is_going_with_a_bang says:

    What a rubbish headline “Tories would quadruple council rent”

    All that has happened – if anything – is that options would have been investigated. No doubt other options were in the study but would not have been quoted as they don’t meet the criteria required by Union leaders and the Mirror for propaganda grabbing headlines.

    As far as the fraud committed by people in this country regarding state benefits of one kind or another it is a system open for abuse – more so now than ever.

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  • Crunchy – getting Council rents to “Market levels” is fine and dandy. Its the market levels we have a problem with.
    If the market level could be dropped by 75% rather than quadrupling council rents I reckon most on here would be pretty happy.

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  • Crunchy – getting Council rents to “Market levels” is fine and dandy.

    So “Market levels” are fine and dandy. I hope I am making my point timmy.

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  • I get your point timmy but increasing council rent is just plain wrong.

    Did you know that if a tenant cannot afford the new rent, the housing agency can evict them for not agreeing to the rise.

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  • “where I live in London there are 100’s of people that live in the private rented sector, where their rents are paid by the governement. In Kingston upon Thames the allowance for a 2 bed flat is £1100 a month. Most immingrants claim this and work full time as well”

    Could you expand on this, what do you mean their rents are paid by the government, what allowance, the local council may pay to house them and they go where they are told surely ?

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  • Mark Wadsworth says:

    I’d also like to second what TImmy T says: “Crunchy – getting Council rents to “Market levels” is fine and dandy. Its the market levels we have a problem with. If the market level could be dropped by 75% rather than quadrupling council rents I reckon most on here would be pretty happy.”

    Although a 75% drop looks a bit unrealistic, I think equilibrium prices would be about half what they are now, rather than a quarter, but there’s only one way to find out …

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  • stillthinking says:

    The fewer “I’m all right Jack” tenants in the UK the better. If they don’t like it they can vote for more social housing.

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  • This is just part of the pre election war of words that seems to have erupted yesterday with Murdoch’s ‘organs’ portraying Brown as a raving madman in that Adam Boulton interview. The Tories won’t do this, they aren’t suicidal.

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  • I agree with timmyt: everyone should pay market rents, and the government should work on lowering those market rents. The present situation of giving 75% discounts to the lucky/chosen few who win the council lottery is ridiculously unfair.

    As a possible solution to the housing benefit conundrum, I’d suggest only awarding the full Local Housing Allowance for six months; after which the rate would fall to a more basic level; thereby encouraging people to either get a job, or to shop around for cheaper accommodation (possibly in a cheaper area). I can’t say I’ve thought it through perfectly though.

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  • fubar – actually this article is a couple of weeks old, nothing to do with the Sun’s change of allegiance. The Mirror has long been proudly left-wing.

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  • Hammersmith, a two-bedroom council flat that currently costs £85, that is too cheap…

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  • tenant super says:

    This is the brainchild of Stephen Greenhalgh of Hammersmith and Fulham (who looks remarkably like Mr. Creosote from Monty Python’s “Meaning of Life”) who has been trying to sell the idea to top tories like Grant Shapps. I don’t think he’ll go for it as the conservatives can’t afford the loss of the entire social tenant vote as well as the fact that it could disincentivise work and cause ghettoisation.

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  • 17. mander said…Hammersmith, a two-bedroom council flat that currently costs £85, that is too cheap…

    mander, I somehow think if that was the mortgage repayment it would be quiet reasonable.

    Some true colours shown here today I see!

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  • crunchy,

    I don’t understand your beef with this. Do you think it’s fair that some people should be paying 1/4 of the rent of their neighbours, simply because they happened to be lucky and get on the council housing list? Or possibly (as in a case I know of) because they once worked for the council’s housing department?

    Or are you simply saying that it’s unfair to change the rules for people already in the system? That I would agree with.

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  • tenant super says:

    The sensible solution to me is to have rent set at a proportion of net income with a cap set at around 75% of market rents. The discrepency between rents in different sectors is most acute in London. In Southwark where I live, a 2 bedroom council property is on average £110 (£90 + £20 service charge) and for what are mostly run-down properties, I wouldn’t class that as too cheap. I don’t think a hospital receptionist on £18k would find it too cheap.

    It is true that those who secured their tenancy decades ago have won the lottery of cheap rents but due to social housing shortage, now only the vulnerable are housed. That may include those deemed ‘scroungers’ but I wouldn’t consider them ‘lucky’ whatever other moral judgment I may make. And there are still the deserving poor; I wouldn’t think of a person given a council flat after losing their job and home after being left semi paralysed by a stroke as ‘lucky’ because they’ve got cheap housing.

    However, all that said, I am less in favour of subsidised housing and more for sorting out the housing crisis, deflating the bubble, regulating income multiples for mortgages, more housing cooperatives, and more secure tenancies for private tenants.

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  • 20. drewster This madness is all part of the general lunacy of britians property crisis.

    Like the luxury apartments article. My beef is that they will do anything to continue this ever deepening spiral of denial.

    Uk property has gotten too big for it boots of which this is yet another crazy example of.

    Never did I think a bloody property would have so much social impact of the likes we are seeing today.

    I do get the feeling that we are all being played and hoodwinked into this madness. I ain’t playing!

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  • tenant super says:

    “It makes perfect sense from the council’s point-of-view: they get more money while passing the tab onto central government.”

    I thought councils did not get to keep rental income? Changing the system to allow them to do so was debated in the commons in July and Healy was in favour of this. As soon as this was proposed, Greenhalgh suddenly decides raising rents is the thing to do.

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  • tenant super,

    I did not know that. Thank you for correcting me.

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  • Councils won’t be able to increase rents substantially, its limited by law. They are already being increased anyway by 4% above inflation PA for the next ten years.

    Another rubbish article.

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  • Fair enough drewster – didn’t realize that. I’ve switched off paying attention to anything that might be electioneering – need to fine tune the filter a bit.

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  • “Councils won’t be able to increase rents substantially, its limited by law”

    That was the point of the discussion. Mr Creosote was campaigning for a change in the law to remove rent controls. Last year, there was another suggestion from the LGA that wealthy tenants have rents hiked and are encouraged to move out. Ideally, the councils would like to be able to boot out tenants once their circumstances improve but it would be harder to change since ‘home for life’ is contracted into the legally binding tenancy agreement and can only be implemented for new tenants. Far easier to force them out with rent hikes. If private housing was secure and affordable, many would leave voluntarily anyway – the bedblocking occurs because even so-called wealthy tenants can no longer afford to buy.

    The LGA research showed that a few thousand tenants nationally have a household income of over £50k per year but they were in a tiny minority and 50k pa (£25K each for a couple) is hardly ‘wealthy’, at least not in London. Social housing tenants have a much lower median income that private sector counterparts. There are a tiny few smirking with an ‘I’m alright Jack’ attitude but these are so few and many of the proposals (usually involving severe rent rises) would create far more problems than they’d solve.

    Just because private renters are being hung out to dry, resenting those who have security and a fairer rent seems a little strange to me. Wanting their rents hiked isn’t going to help private renters, and their situation hasn’t caused the bubble or general cruddiness in the private sector- so wanting to see their rents hiked looks suspiciously like schadenfreude.

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