Saturday, May 19, 2012

Housing shortage?

Wealthy tenants face crackdown

Ministers are looking to clamp down on wealthy families who benefit from tens of millions of pounds of subsidies for social housing.

Posted by mr g @ 10:29 AM (2932 views)
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22 thoughts on “Housing shortage?

  • “A No 10 source said: “It’s not right that high earners benefit from taxpayer funded housing subsidy.”

    Are the government also going to remove the subsidies from wealthy landlords, eg tax relief on mortgage interest, and impose a land value tax on wealthy villagers whose properties increase in value due to new roads and bypasses, flood prevention schemes etc?

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  • This crackdown is a good idea. Social housing should only be for people who cannot earn money. Perhaps whilst they update the rules they can also ensure there are fewer foreign nationals using this housing as well (http://www.frankfield.com/latest-news/articles/news.aspx?p=102452)

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  • miken,
    “Social housing should only be for people who cannot earn money.”

    So as soon as you get a job, you should be kicked out?

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  • mark wadsworth says:

    I love the way that the Home-Owner-Ist complain about high earners in social housing ripping off the taxpayer… surely high earners ARE the taxpayer, and if they live in social housing, not only are they NOT receiving a subsidy* but also, with their taxes, they are subsidising the Home-Owner-Ists along the lines explained by Stuart King but not getting any of the windfall profits.

    * The big subsidies are received by those in social housing but not in work and hence not paying rent; or those who do right-to-buy at a huge discount and then rent out to Housing Benefit Claimants – the usual bunch of Homeys, in other words.

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  • Swisscheeseplant says:

    Totally agree, now what would be the market rent for No 10 ?

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  • @MW “I love the way that the Home-Owner-Ist complain about high earners in social housing ripping off the taxpayer… surely high earners ARE the taxpayer, and if they live in social housing, not only are they NOT receiving a subsidy* but also, with their taxes, they are subsidising the Home-Owner-Ists along the lines explained by Stuart King but not getting any of the windfall profits.”

    Wrong yet again MW. This has absolutely b*gger all to do with home ownerists and everything to do with common sense which seems to have disappeared thanks to your hatred of anyone who owns even a modest property.

    You and others on HPC complain about a shortage of social housing yet conveniently overlook this type of abuse of the system, in other words making the facts fit your view of the world.

    I can even see some merit in applying SK’s comment “impose a land value tax on wealthy villagers whose properties increase in value due to new roads and bypasses, flood prevention schemes etc?” but to suggest that households with an income of £60k+ should be allowed to live in social housing, when according to you there is a housing shortage, beggars belief.

    Either there is a housing shortage or you are simply talking it up for your own ends.

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  • drewster, I think the individual circumstances always need to be looked at and also consideration needs to be made against the current economic climate. Right now the economy cannot afford spongers. If someone who was receiving a tax payer funded housing subsidy suddenly gets a high paid job then they should at least lose that subsidy. I.e pay market rates for rent. Why should they benefit with lower rents than anyone else?

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  • stillthinking says:

    Oops we effectively paid some people tens of thousands of pounds for decades. Don’t worry about it though.

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  • mark wadsworth says:

    Mr G, I’ve got nothing against high earners, I’ve got nothing against social housing. Why would I have anything against high earners in social housing? But the homeys hate high earners and they hate social housing, so I can see how this is a red rag.

    And I never said there was a housing shortage in absolute terms, I said it was woefully badly allocated, i.e. single pensioners in large houses, young couple in one-bed flats. The reason for building more is because of all the empty ones, the holiday homes, the poor widows in mansions etc. If we didn’t have this misallocation, then to be honest we wouldn’t need to build much. But the Homeys love this state of affairs – that’s why they hate Land Value Tax, that’s why they hate new construction, that’s why they hate social housing, because all of that SOLVES problems and the Homeys want to CAUSE problems.

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  • crash bandicoot says:

    Personally I find high earners in social housing less bothersome than anyone – no matter their circumstances – being allowed to buy thier social home at a discount. To me it’s a madcap scheme.

    We’re now in the position that we have houses that have been sold under right to buy being rented back to local authorities. If anything shows the lack of long-termism in politics this does.

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  • miken, I agree, council housing should be let at market rates. Thankfully the present government is moving close to that, with their plan to set rents at 80% of market rates.

    The only problem is that in high-rent areas (i.e. London), setting the rent so high removes any incentive to work.

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  • mark wadsworth says:

    Further, how on earth does high earners living in council housing put pressure on housing? Each household has to live in at least one home, and the more people are prepared to move into smaller or cheaper homes, the more is left over for the rest of us, yippee!

    And this is exactly of course what LVT and a Citizen’s Income would achieve – live in a small home* and you get a cash rebate, live in a big home and you have to pay, live in an average home and you’re cash neutral.

    * Of course, where a home is is far more important than how big it is. As Drewster suggests, having LVT would mean that social rents in expensive areas would go up, and social rents in cheap areas would go down, which seems like a good idea to me.

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  • Mr G: Any perceived problem of wealthy people living in social housing – presumably those who’ve worked their way up in terms of employment because no one qualifies for social housing with an income in excess of £60,000pa – and a shortage of such housing is solved by creating more of it instead of the current policy which sees more sold off than built.
    The biggest barriers to housing associations and local authorities building more affordable housing are land prices, Nimbyism and lack of political will from the present government, which drastically reduced the amount of money for such schemes shortly after it was elected.
    With regard to the last point, a reduction in the availability of funds for publicly-owned social housing schemes has led to a growth in private buy-to-lettting, forced up rental prices (and the amounts paid in housing benefit – a big taxpayer funded subsidy to the well-off landlords), a reduction in overall tenant security (eg with fewer people in secured tenancies where they can plan their lives), and an overall deterioration in living standards for those in rental accommodation, as quite a few landlords let out substandard housing and local authorities are largely powerless to do anything about it – witness shanty-town style shed lets in parts of London.

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  • Mr G: Any perceived problem of wealthy people living in social housing – presumably those who’ve worked their way up in terms of employment because no one qualifies for social housing with an income in excess of £60,000pa – and a shortage of such housing is solved by creating more of it instead of the current policy which sees more sold off than built.
    The biggest barriers to housing associations and local authorities building more affordable housing are land prices, Nimbyism and lack of political will from the present government, which drastically reduced the amount of money for such schemes shortly after it was elected.
    With regard to the last point, a reduction in the availability of funds for publicly-owned social housing schemes has led to a growth in private buy-to-lettting, forced up rental prices (and the amounts paid in housing benefit – a big taxpayer funded subsidy to the well-off landlords), a reduction in overall tenant security (eg with fewer people in secured tenancies where they can plan their lives), and an overall deterioration in living standards for those in rental accommodation, as quite a few landlords let out substandard housing and local authorities are largely powerless to do anything about it – witness shanty-town style shed lets in parts of London.

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  • @MW and SK

    OK, we all have our own opinions on house prices, LVT, nimbyism etc. but the basic tenet of my argument in this particular case is fairness.

    Believe it or not even though I am a homeowner, NOT a homeownerist and generally hold right of centre views, I still believe in fairness but not the bullsh*t peddled as “fairness” by politicians who have no understanding of the lives of the majority of people in this country.

    I take note of your comments above but do we agree that an income of £60k is way above that of most households?

    If so, consider the following:

    2 families apply for social housing in the same area.

    Family A, 2 adults and 2 children, have a total income of £50k never mind £60k, from whatever sources.

    Family B, again 2 adults and 2 children, have a total income of £30k from whatever sources.

    I say “whatever” sources as I am not familiar with the benefit system therefore I will simply assume each family brings in the figures quoted wherever that may originate.

    Surely, basic common sense, decency, the housing “shortage” call it what you will, says that family B should have priority?

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  • mark wadsworth says:

    Mr G, yes – but…

    1. If you are the man in charge of allocating the last available council house and have to choose between these two families, you give it to the £30k people. There’s no suggestion that higher income families are given priority.

    2. But would £30k family rather live in social housing or private housing? The latter. Now, if £50k household is in social housing, that means there is one extra private home which is available for £30k family to buy or rent. That’s basic maths.

    3. What if you are in charge of allocating the last available council house and have to choose between £50k family and a bunch of shirkers who’ve never done a day’s work in their lives apart from a few hours a week as nail technicians or auditioning for X-Factor? If you are truly and coherent in your opinions, surely you’d allocate the last council house to the £50k family and tell the other family to get on their bikes.

    And I never said there was a housing shortage – that’s Home-Owner-Ist propaganda the same as the so-called “shortage of land” and “Britain is a crowded island” and so on. It is factually incorrect and useless as an argument to support any particular opinion or policy.

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  • @MW In response to your comments.

    1. I’m not suggesting that higher income families are given priority.

    2. Regardless of income, I guess that most people would prefer to live in private rather than social housing. However, if a family earning anywhere between say £30 and 60k lives in social housing they are depriving a family with a lower income the opportunity of social housing.

    3. I’ve never suggested that nail technicians etc are shirkers, I’m sure the majority work hard, what I am saying in that instance is that as a country we should be striving to educate children to a better standard whereby they hopefully will have more ambition to succeed and achieve the social mobility so beloved of our politicians. Yes, in the example you cite, I would be inclined to allocate the last council house to the £50k family. Unfortunately in the politically correct environment we live in, I would probably be dismissed for some form of discrimination.

    Finally, I will retract my comment that you personally complain about a housing shortage but there are plenty of contributors to HPC who do and they have been conspicuously absent from making comments on this post.

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  • If I may just butt in, mr g, #2 is not necessarily true. I would prefer a council flat in prime central London than a private flat in Dumpington-under-Mould.

    Secondly, people’s circumstances change. To give you one example: there’s a guy who is the son of a lavatory attendant from east London, he left school at 16, worked in basic track maintenance work for London Underground. Just your average working-class guy. Got himself a council house years ago. Today after many promotions he earns £145,000 a year. Should he be forced to move out? (Yes, I’m talking about this guy.)

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  • I can see marginal tax rates on people making 60k shooting over 100%. Do we really want people taking paycuts or working part time to keep their house?

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  • mark wadsworth says:

    Mr G: ” if a family earning anywhere between say £30 and 60k lives in social housing they are depriving a family with a lower income the opportunity of social housing.”

    Yes, agreed. But they are freeing up a private home for some other working family to move into.

    As to 3, yes, I’m not happy with the state of our education system either, but that is completely off topic. The wannabe celeb’s cause far less economic damage than the people who think they can live off endless unearned house price increases.

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  • @Drewster

    No problem butting in, no one has a monopoly on commenting on HPC!

    On reflection, I’m sure most people would not wish to live in Dumpington-under-Mould in any sort of housing.

    There is no way that Crow or anyone earning that sort of money should be living in social housing, full stop.

    @MW

    With respect, you raised the topic of nail technicians, I merely answered your comment by explaining my reason for using the nail technician analogy!

    And yes, I agree that those who think they can live off unearned house price increases are parasites who contribute nothing to the economy or society.

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  • @MW

    Admittedly off the topic of this specific post but could poor education be a contributing factor to high house prices and high levels of debt?

    If basic maths are badly taught does this mean that people are at a disadvantage in financial matters?

    This could manifest itself in a number of ways, lack of budgeting skills, not understanding the correlation between earnings and house prices and therefore how much you can afford to pay, not understanding how interest works never mind interest rates, etc.

    It could be argued that someone in this position is easily duped by the home ownerist propaganda that “you must get on the property ladder” and consequently pays over the odds for a property which in turn contributes to the increase in prices. Add to that a lack of understanding of how a mortgage works and you’ve got yet another element of why we have the current obscene house price levels and indebtedness.

    There, I’ve even agreed that home ownerist propaganda exists.

    Just a thought.

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