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Market rent and Income thresholds

(22 Posts)
queencori Thu 09-Jul-15 17:42:55

Can someone explain to me how people in social housing who pay their full rent are being subsidised by the tax payer?. My understanding is the rent is set by the local authority , housing association etc and the person pays it. The govt dont hand out the differnece between the L/A rent and the market rent to the council - where is the saving?

caroldecker Thu 09-Jul-15 18:07:52

The 'subsidy' is the council not getting the maximum value for the property, thus depriving other residents of services or having a higher rate of council tax.

queencori Thu 09-Jul-15 18:36:44

My undestanding though is that a 'subisdy' is finacial aid though.
Most social housing is owned by housing assoication which are non profit organisations or charites so no loss in services there

caroldecker Thu 09-Jul-15 19:02:15

Plenty of loss of services - additional rental income would allow them to build more homes quicker and provide more social housing.

queencori Thu 09-Jul-15 19:19:58

Are there that many people in social housing earning over the threshold that it would have a significant impact on services or house building?

caroldecker Thu 09-Jul-15 21:23:46

no idea, but if not, then not many will have to pay extra, so no issue with charging it - if lots, then its a win for people who are homeless and need social housing.

DrHarleenFrancesQuinzel Thu 09-Jul-15 21:32:31

additional rental income would allow them to build more homes

Yeah cos that's going to happen hmm Not a dig at you BTW carol but more of the crap government we have making the rich richer and the poor poorer.

DrHarleenFrancesQuinzel Thu 09-Jul-15 21:34:10

Oh and no homeless are going to win. People aren't going to give up their secure tenancies, if anything they will just use their RTB instead leaving less homes.

DrHarleenFrancesQuinzel Thu 09-Jul-15 21:35:40

Oh and queen they aren't subsidised either. The rent is an affordable one not the extortionate rate that LL charge (albeit at times through no fault of their own)

tabulahrasa Thu 09-Jul-15 21:36:35

It's not directly subsidised, there's just no profit being made.

It won't go towards housing stock because I believe it's not to be kept by the council or HA.

caroldecker Fri 10-Jul-15 00:32:48

So instead of more homes, it goes to general govt funds to provide welfare paymenst to those that need them.
Private LL do not charge extortionate rents, this would happen if there was no competition. Rents are the market rents that people pay, social housing is priced below this and there is no reason higher earners should benefit becuase they used to be lower earners or they inherited a family tenancy.

RedandYellow24 Fri 10-Jul-15 00:48:15

Agree it sounds good in theory but in London where I am market rates are so high you could be on £30k and still need housing benefit to pay market rates.
A 3 bed house could cost £1600 month that's over £19k year that didn't leave you much to live on.

If the extra income was flooded into building more homes for cheaper rent for low wages-better. But the money will disappear.

If you have to pay full market rent tigers far nicer places to live than many run down estates so the only reason you would choose to stay was if you were buying. So then the poor person who can't afford full rent still can't have cheaper place to live

caroldecker Fri 10-Jul-15 13:01:04

So, if people would prefer private rentals, they will move out, freeing up the social housing. I see no downside except for people earning more than £30k in social housing and a large upside of either freeing up homes, providing more money for social housing or providing more money for benefits, all benefitting people who earn less than £30k

tabulahrasa Fri 10-Jul-15 13:24:19

Why would they prefer private rentals?

Unsecured tenancy, raising the deposit and moving will not free up housing stock.

It doesn't do anything positive except as taxation, and I don't agree that families on a combined income of 30k are high enough earners to be taxing to the tune of an extra two or three hundred pounds a month.

A single person on 30k isn't doing badly, a family of 4 with two people working and a combined income of 30k is a very different prospect.

In April 2 parents with 2 children working full time for £15k each and living in social housing will lose all tax credits, be given a rent increase and won't benefit from the new minimum wage (because they're already earning it).

Meanwhile thousands of people have been moved out of the 40 pence tax bracket and people can inherit million pound houses tax free.

caroldecker Fri 10-Jul-15 15:08:12

redandyellow said they would prefer private rentals, as all social housing are 'run-down estates'.

gamerchick Fri 10-Jul-15 15:14:04

The leaving the house for private actually makes me laugh.

That is not going to happen!

Nobody is going to give up a secure tenancy just to pay the same for an unsecure one. this is a fact no matter how many times people think it.

We're going to buy ours now. Which was probably the real intention all along.

Howcanitbe Fri 10-Jul-15 15:16:47

Message withdrawn at poster's request.

Howcanitbe Fri 10-Jul-15 15:24:43

Message withdrawn at poster's request.

BathtimeFunkster Fri 10-Jul-15 15:47:48

There is something so perverse about forcing an organisation to charge more for something than they want or need to, and calling it "market" anything that I'm amazed at the stupid "oh yes, what a brilliant idea" responses.

Or I would be if the vindictive stupidity of English voters wasn't now a matter of record.

How can you want everyone to charge "market" rents in a housing system that is completely dysfunctional?

The possible only reason is to remove any remaining competition from the "market".

TidyDancer Fri 10-Jul-15 16:33:36

I posted about this on a thread the other day, but there's just not enough info that I can find on this. This has been the one part of the budget that's been the talking point at work. Does anyone know exactly what income will be taken into account when calculating what the level of rent will be? Will pensions be included, or will there be an exemption? And will it make a difference what rent rates tenants are currently on? My colleagues relative is on a social rent rate, which is lower than the affordable rate, so I wonder if this policy would be applicable to them.

Some clarification is needed, people are entitled to know how badly screwed they are going to be.

DrHarleenFrancesQuinzel Fri 10-Jul-15 17:50:54

I live in a council house and have no intention of moving to private rental ever. I'd rather buy even though I don't agree with it. So if we become a apparently high income family, because £30K is loads isn't it hmm I will just buy. At least then I can provide the repairs that is needed, not what the council can be bothered to do.

TidyDancer Fri 10-Jul-15 18:18:15

I don't blame you DrHarleen.

As an aside, anyone know when this dreadful policy will come in?

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