AIBU to question Reform's plan to prioritise married couples for social housing?

I don’t understand how the maths is the same. Who subsidises housing associations when they don’t use government grants? They borrow from banks, and repay the interest from their income.
maybe I’m misunderstanding what you mean.

cross subsidy is certainly still working for the 2 HAs I’m on the board of.

The maths is the same whether council or HA. It’s true that historically new build social housing has been subsidised by open market sales but that doesn’t work any more because there’s no profit to be made in most open market newbuild these days. And from a corporate finance perspective the spreadsheet doesn’t change: if you’re renting out an asset for less than your cost of capital that’s a subsidy whether you have loans or got it cheaply or not.

They’ve announced another £16bn of newbuild social housing subsidy this morning, for this reason.

Then people would need their rent topped up. Better for councils to own assets which generate income.

That’s not actually the case though because the vast majority of social housing (for decades) has been built by housing associations, not councils.

They borrow money on the financial markets to build new properties, and then cross subsidise the social housing by building and selling open market sales/ market rent properties.

the rent (at a company level, not necessarily for individual properties) covers the cost of capital for the housing association.

there are a small, limited number of capital grants available to housing associations, the mayor of London probably being the most active in providing them. IMe of >20 years in social housing I would estimate less than 5% of housing association new builds are able to utilise this funding.

I’ll explain the subsidy question because there’s a lot of confusion on this thread. The answer to “is social housing subsidised?” depends on whether you account for the cost of capital. Social rents are set by a formula and this generally (not always) covers maintainance and admin costs with a bit left over. Social rents average about 3-4% of open-market equivalent property values (which in today’s world roughly equal construction costs). So after costs the rental yields to the landlord are probably 2-3% of property value, sometimes less. A typical private sector landlord would be looking for a c5-6% gross yield and maybe 4% after costs (but before tax and mortgage).

So social rents are lower than open market private rents but normally higher than maintainance costs. But that doesn’t cover the cost of capital. Suppose the council borrowed the money to build the properties using perpetual (ie non-repayable) debt. The cost of that debt is likely 5-9%. Remember, the rental yield after costs is maybe 1-3%. So borrowing money to build social housing does require subsidy. Thats why it’s essentially impossible to build more social housing without subsidy today, and why the government has a £39bn new social housing subsidy scheme.

So you can sort of argue that existing social housing doesn’t require subsidy, if you don’t believe it’s appropriate to account for the cost of capital. But to build new social housing definitely requires a lot of subsidy.

Subsidised = provided at a loss and needing financial input from the subsidiser to break even.

Market = provided for (often considerably) higher sums than needed by the provider in order to make a profit for the provider.

Not for profit = provided for a sum that enables the provider to break even without loss or profit.

Social housing is the third one. Its purpose isn't to generate profit for the local authority. Its to provide affordable housing to keep people safe and well, and which they can use as a foundation to build lives and contribute to society. Thus saving money for the tax payer because well housed people are more likely to have jobs, have less need of the NHS and social services, to raise healthy well adjusted children and who don't drain the public purse through extortionate rents to private landlords requiring benefits, or extremely costly temporary accommodation.

Well then you are in luck @likelysuspect because Reform are going to build loads of houses.🥳

For free.

Not a single tax payer penny.

Not a brass farthing.

Not even a sausage.

Yay for all the free houses and sunlit uplands ahead.💃💃💃

I live in a council house on a council house street. All of us, apart from the half a dozen or so elderly pensioners, work and pay full rent and rates.

No one is subsidising my living expenses.

Social/council housing is not for profit. The rent covers their costs.. they "wash their face" so to speak.
Private landlords are a business and want to make money, so charge more. Their costs are also higher.
Council/social landlords have their own teams of staff for fixing things/maintenance etc. Landlords usually get a contractor in.

Who sets market rent?

We just need a huge social housing building programme like there was after the war. Forget these 'luxury flats' which are basically one room with a corner kitchen and a bedroom and high service charges.

Build social housing, bungalows, 2 bed houses and maisonnettes.

I think that social housing is subsidised because councils could rent them out for closer to a market rent, thus maximising their assets.

Social housing allocation should be based on need, not the relationship status of the applicant. Survivors of DV and care leavers are usually higher priority already- quite rightly- so I suppose the most positive thing about this latest idea of theirs is at least that is correct.

The more plans that Reform put out there the more it feels like we’re going back in time to, quite frankly, a much grimmer part of history. This proposed policy appears to be stigmatising unmarried people, single parents, etc. the other day it was attacking the disabled. They don’t seem to like the LGBTQ community at all, people who aren’t white and British, and I’m pretty sure that Farage has mentioned restricting access to abortion in the past. Which I’m sure has nothing to do with him being at least partly funded by crazy American Christians anti abortion types.

I agree. None of this "British born married couples with British kids" getting priority.
It should be based on need.

It should be allocated on the basis of assessed need, not what people are.

So they're prioritising everyone?

What about the vast number of care leavers who were not born in the UK, which category do they fall into? The care leaver category or the non prioritised 'not born in Britain' category?

Its a puzzle.

Yes I agree - it feels as if it could be abused. I’d really like to know if this is a properly researched proposal with any evidence to suggest what problem exactly it might solve and how, or just someone’s sudden inspiration with nothing behind it.

Sadly for you, social housing is not subsidised. Well, not by landlords. Tenants' rent pays for it to be built/bought and maintained so perhaps they are doing the subsidising?

Yeah, all those people getting £5m hand outs.

Oh yes, mentioned the c-o word again. Thanks MN for taking a perfectly usable term out of use.

Basically I said Electoral Calculus predicted Reform's chances of forming a majority government at the next GE at 2%. Forgot to add, this was pre- Farage humiliation at his tantrum throwing by-election. Could be even lower now.

So no need to worry about Reform's stupid, unworkable crapto-fascistic Farage wank fantasy "policies". If there was an election tomorrow they'd be c 200 seats short of a majority.

I don’t know details. We moved from the south east to a much less well off part of the Midlands and I’m just really surprised how many of the kids are brought up by mum (generally a superstar) and dad not in the picture. This was far less common where we were before. Not saying it didn’t happen there but was like two people out of two classes worth of kids. Not a good proportion of my kids’ friends like here.

Thank god you’re not in charge or we’d be back in Victorian times