To think some social housing rents should be tripled?

(259 Posts)
LondonMan Fri 16-Aug-13 13:49:43

First of all, please read the post carefully, this is not meant to be a benefits-bashing thread. It's meant to be a thread in favour of "economic correctness."

I want all rents to be set at the market rate, which apparently might mean tripling them in parts of London. I was watching the "How to get a council house" series, and in the program in which Tower Hamlets was featured, the rents seemed to be about a third of the market rate. (I have also watch the Manchester program, so realise there is less of a discrepancy elsewhere.)

I think it is wrong to price anything at other than a market rate, as it results in misallocation of resources.

I presume realistic rents would make no difference to those most dependent on benefits, it would just increase the amount of housing benefit they received. Obviously some other people would be affected. For example some working people who pay social rents with no help from benefits might decide that if their council house no longer had a subsidy, they might prefer private housing, freeing up their council house for someone else.

I know from previous threads that lots of people on here have a confused idea about what subsidy means. It simply means getting something for less than it would cost in a free market. If the owner could rent out a property for £300 a week to the highest bidder, but do in fact rent it for £100 a week to a social tenant, then the social tenant is being subsidised by £200 a week the owner is forgoing.

Essentially the point of "social housing" should be to provide secure tenancies, since the market currently doesn't do this. (Though possibly there should also be changes so that the market does.) It should not be to provide "cheaper" housing, since there is no such thing. Housing is worth what it's worth: when people talk about "affordable rent" or "low-cost" housing the correct economic view of what they mean is almost always housing with a hidden subsidy. I'm not against explicit subsidy, via higher housing benefit for example, but I am against the hidden subsidy in below-market rents.

(Before I saw these programs I was under the impression that central government had already introduced a rule that social rents had to be raised to realistic levels, so I was surprised by the size of the discrepancy in Tower Hamlets. Are Tower Hamlets just being slow in complying, or am I wrong to think there is such a rule?)

Wallison Tue 20-Aug-13 21:16:10

Instead of dreaming up more hair-brained schemes to keep property prices so high (ie the packages guaranteeing buyers' deposits), wouldn't govt money be better spent building more council houses, allowing a crash and then paying off the excess for people consequently caught by negative equity?

In some places rents are already going up. Our rent at the HA place we used to live in (no council housing where we live, all local HA) started out at about £85 a week. Then it crept up and up until two years later it was closer to £110, which is pretty much market rate around here.

Word locally is that our HA were basically forced to put the prices up by the council, though I have no idea how this would benefit them as it's the council paying out the HB in the first place confused

Wallison Tue 20-Aug-13 22:24:22

The govt has started on a new scheme of 'affordable rent' for tenants in social housing. Of course, by 'affordable' they mean 'higher'. All LAs and other housing providers are affected by this. Bastards.

georgettemagritte Tue 20-Aug-13 22:55:26

Fasterstronger are you sure you're not a HPCer trolling mumsnet? hmm

FasterStronger Wed 21-Aug-13 08:46:53

George are you avoiding providing any data? Oh and your reference to the OECD was a complete misquote

And hpcers want a crash - because they mistakenly think it would help their stupid selves. Whereas no banks would lend, so people with money could just hoover up properties and wait for recovery.

dirtyface Wed 21-Aug-13 09:43:33

galaxy yes thats what i don't get :S putting rents up will just increase the HB bill? and probably end up putting working people on part HB that never needed it before

madness

FasterStronger Wed 21-Aug-13 10:38:48

the extra money being charged for affordable rents goes to build more social housing

dirtyface Wed 21-Aug-13 10:56:16

yes am sure thats what they will tell people it does in theory....but whether that will ever happen under this government remains to be seen hmm

LadyBryan Wed 21-Aug-13 11:01:21

ilovemyself - Yorkshire.

We had the property valued at £500-£550 a calendar month.

But we're not interested in making a massive profit, it is a stop gap until such time as we can sell the property for an approrpriate amount.

And before anybody asks, no we won't evict tenants, once we put it on the market we will simply not find another tenant when the previous moves out.

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