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to think high house prices are the problem?

(230 Posts)
benefitcapclaptrap Mon 15-Apr-13 20:23:08

Just watched a news item about the benefit cap being introduced today in some areas. Not sure I totally agree with it but I understand that the reason for it is that the welfare bill is too high. What I don't understand is how reducing housing benefit payments will solve the problem in the long term.

As I see it, the reason housing benefit spending is high is because the rents charged are also high. Too high in fact for the (mostly working,but low paid) tenants to be able to afford to pay without assistance. The usual reason given for high rents is lack of available properties, but I can't see the evidence for this locally (south east) or in other towns I have visited.

Instead, I would suggest that, the reason for high rents and demand exceeding supply is actually due to the cost of buying a house being far too high. A large proportion of people who would like to buy a house (and in the past would have been able to afford to) have been priced out of the housing market. Therefore they have no choice but to rent those same houses from a landlord that could afford to buy it. This means the rent is at a rate that not only covers the mortgage the tenant couldn't afford plus extra for maintenance and I presume some amount of profit. So it would follow that the tenant quite likely will not be able to pay the whole rent their self and must apply for housing benefit.

Am I being unreasonable in thinking that if house prices were lower and affordable to most people on an average wage there would be a lower demand for rental properties. In turn this would mean lower rents for those who can't or don't want to buy and mean lower bills for housing benefit. Also if people didn't have to spend such a high proportion of their income on the basic necessity of a home to live in, there would be less need for top-up benefits (e.g. tax credits) and people would be able to spend more which would get the economy moving again.

So AIBU? <dons hard hat and flameproof suit>

Owllady Thu 18-Apr-13 16:56:14

whereas my husband is an extremely skilled engineer and I worked in retail management until recently, haven't got a hope in hell of buying a house, not one we can fit the children into anyway

We did own before, but the prices dropped, dh lost his job and we relocated for work, out of necessity and we broke even. thankfully we sold though as we would be in negative equity now confused so maybe it was for the best

HesterShaw Thu 18-Apr-13 16:58:12

Your parents sound like mine in terms of income. Dad earned a decent-ish salary and my mum was a SAHM earning nothing and they bought an 3 bed house, and later a FIVE bed house on a naice estate after she got a job as well.

Madness.

YoniMaroney Thu 18-Apr-13 17:00:40

The country is fecked.

I want somewhere nice to move to.

Maybe I'll enter the Green Card Lottery.

HesterShaw Thu 18-Apr-13 17:05:06

I like this country. I like Britain. But I am fucking exasperated by it.

MoodyDidIt Thu 18-Apr-13 18:13:43

me too hester

i posted a despairing post the other week about never being able to afford to buy, as i said earlier i am "lucky" as have a council house but its in a dreadful area and who knows what the hell the govt are going to do to council houses? prob sell em all off to private landlords who will put the rent up and give us shit tenancys. actually thats my one of my biggest fears tbh sad

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