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>

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

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

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

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 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.

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

Owllady Thu 18-Apr-13 16:54:00

I know I agree. When we were children my dad worked a manual job and my mum was a cook and they bought a 3 bed detached house!

HesterShaw Thu 18-Apr-13 16:51:05

But why should people who were able to afford housing before this RIDICULOUS housing boom, who are earning an averagely decent salary have to SHARE ownership? It's insane!

It wouldn't matter so much if we were like France where there are many more tenants for life, but in this country, property ownership has developed into the standard "security", and something which everyone aspires to. With it becoming so out of reach for so many average, normal people, they are constantly on the edge of risk, at the mercy of remote and profit-driven LLs who could evict them any time they like. In France laws protecting tenants are more thorough.

Owllady Thu 18-Apr-13 16:45:56

god sorry i seem to have lost the ability to type! blush

Owllady Thu 18-Apr-13 16:45:33

I will tell you what's on the shared opwnership scheme up for sale in my toen
2 bed apartment 200k
2 bed apartment 180k
1 bed apartment 135k
1 bed flat 130
2 bed apartment 50k

Owllady Thu 18-Apr-13 16:43:27

sorry the £182,000 is for a shared ownership 3 bed terraced. i don't think i was very clear. In my mind that is not at all affordable to alot of people

Owllady Thu 18-Apr-13 16:42:40

I think it's terrible selling leasehold farms as well to be fair, i was just saying what is happening

That said, they sold disused farmland to developers a few miles up t'road from here to build an urban village type thing so they are obviously flexible when they want to be. But yes, their affordable housing is laughable aswell for a 3 bed terraced it's £182,000. We have a household income above the national average and we cannot get a mortgage for that amount

YoniMaroney Thu 18-Apr-13 16:33:00

Affordable housing is ridiculous. They do a token half-dozen houses often with some stupid part-buy, part-rent scam scheme, and the rest are even more expensive than what's otherwise available.

HesterShaw Thu 18-Apr-13 16:30:43

I don't understand the current policy. On the one hand, the government are saying they will relax planning laws to make development easier fuck the environment. And on the other hand the Localism Bill will give more power to communities over what is built and isn't built. You will get some communities which will say no to everything because they don't want any ghastly poor people near them. The town I live in (population about 18,000) hasn't had ANY affordable housing built in over four years. And yet we have some of the longest housing waiting lists in the country.

I also take issue with the phrase "affordable" housing - now that to me simply should me "houses normal people can afford" not ones which are priced stupidly. It shouldn't mean HA homes, or only houses for rent, or part ownership schemes. People want homes of their own! It's the enormous deposits the banks are charging that is one of the main problems.

FasterStronger Thu 18-Apr-13 16:25:46

err no.

that's terrible selling farms. they make farming accessible.

what is the other land currently used for?

Owllady Thu 18-Apr-13 16:22:23

they are selling it! obviously you don't live in the country wink

they are also selling a lot of leasehold farms

FasterStronger Thu 18-Apr-13 16:17:59

owl - if they own lots of land, why don't they sell it rather than cut services?

YoniMaroney Thu 18-Apr-13 16:12:28

Lots of land available, you can buy a family home sized plot for £1k. The ONLY problem is that it's illegal to build on it without planning permission, which the government wouldn't give.

Owllady Thu 18-Apr-13 15:58:59

the council, they own loads of land

wink

FasterStronger Thu 18-Apr-13 15:56:50

from whom?

FasterStronger Thu 18-Apr-13 15:56:39

I think all taxpayers should be given the option of buying a plot of land from who?

Owllady Thu 18-Apr-13 15:51:45

I think all taxpayers should be given the option of buying a plot of land and then we could all put up our flatpack homes

Mondrian Thu 18-Apr-13 15:32:31

Yoni, I agree that more land should be marked for residential development. Also government should make self-built much easier, it's pretty much the norm in the continent but uk is way behind - it also makes housing much cheaper by some 20 - 30% but of course it doesn't serve the big developers or the big landlords.

I don't think the 2nd homers or the small landlords make that much of a difference it's the big players that set the rates - the owners of the company that owns our apartment block in london (the lease & 30% of the 200 flats) are the largest landlord in Europe (as a family) and 2nd in the world as they own loads of properties ... Yet you never hear or see their names as its a series of companies spread throughout the family. Incidentally they moved to uk after the war penny-less!

HesterShaw Thu 18-Apr-13 15:17:40

BE fascinated even.

HesterShaw Thu 18-Apr-13 15:17:22

Badger, elaborate? I'd fascinated to find out how you know what a stranger on the internet can afford.

YoniMaroney Thu 18-Apr-13 14:43:02

? The London Stock Exchange is our LOCAL stock exchange. It's where our LOCAL pensioners have most of their pension funds invested.

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