Thursday, January 31, 2013

The Rent is Too Damn High

Rising rents leave a generation caught in the ‘Rent Trap’

A new report from Shelter shows rents are rising by an average of almost £300 a year in England. A housing association friend of mine warned me of the time bomb created by the LibCons in Housing Association rent increases which will blow up the Housing Benefit budget and impoverish marginal renters.

Posted by pete green @ 08:39 PM (1879 views)
Please complete the required fields.



9 thoughts on “The Rent is Too Damn High

  • Guilt pleasure of reposting Jimmy McMillan:

    &b the funky version

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    “the time bomb created by the LibCons in Housing Association rent increases which will blow up the Housing Benefit budget”

    Well exactly not. HA’s are part of the government* and HB is paid by the government*. This is just a bookkeeping exercise whereby the government pays money to itself.

    * Or I could say “owned by the taxpayer” and “paid by the taxpayer”. Either way, this does not cost the taxpayer anything – it is only HB paid to private landlords which cost the taxpayer, it’s like negative LVT.

    Reply
    Please complete the required fields.



  • Not too sure I agree MW – insomuch that the Housing Associations have become private landlords, very separate to government. But I will think deeper on this issue and get back to you.

    Reply
    Please complete the required fields.



  • Whilst council tax payers subsidise local authority rents.

    Reply
    Please complete the required fields.



  • Further to my comment at 4.

    Would LVT do away with the iniquity of hard pressed working people who struggle to pay council tax, effectively subsidising local authority / social housing rents MW?

    That’s a genuine question and if the answer is yes, count me in.

    Reply
    Please complete the required fields.



  • I think the best way to contain pressures on rents is to restrain demand — by letting millions of new people into the country.

    Reply
    Please complete the required fields.



  • mark wadsworth says:

    PG, you can think what you like, Housing Associations are part of “the government” in the wider sense.

    Mr G, I don’t get you. “Rent” for a home consist of two elements:
    a) The cost of providing and maintaining bricks and mortar.
    b) The location value.

    By and large, headline council rents more than cover (a), although it is true that maybe half of council tenants (primarily OAPs and unemployed) pay even less than that (because of HB, which is effectively a discount).

    By and large, headline council rents do not include very much of (b). That is why it can be profitable to illegally sublet your council flat when you move out.

    Clearly, a coherent LVT system makes everybody (or as many as possible) pay for the location value of where they live. If you are a council tenant, your rent will go up. In most areas it won’t go up much, maybe by £50 a week or something, in London it might go up by £200 a week or something. So there is no incentive for illegal subletting – if you are paying market rent, then you can’t sublet for market rent at a profit.

    And “hard pressed working people” will quite simply pay a LOT LESS TAX under LVT, i.e. although LVT will be more than Council Tax (a lot more in some cases), it will be only half as much as the reduction in other taxes which “hard pressed working people” pay. If you are paying a LOT LESS TAX then before, it is far less of a worry how the government spends it.

    That’s basic maths. I have set up a spreadsheet and embedded it here for people to muck about with:

    http://kaalvtn.blogspot.co.uk/2013/01/o-land-prices-are-real-wealth-or-capital.html#3

    Reply
    Please complete the required fields.



  • Thanks for the response MW, I’ll study your spreadsheet when I’ve a bit more time.

    Reply
    Please complete the required fields.



  • Rather meaningless unless they express the rent increase as a proportion of current rents. About 3%? Still, a small increase in real terms. I doubt there is much room for rents to rise since other living expenses are also rising and incomes are static or falling in real terms. Rents are a kind of residual, right?

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>