To think some social housing rents should be tripled?

[LondonMan]

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?)

Can't see anything much wrong with that, joanofarchitrave. Or why not just do what the Yanks (bastions of the free market economy) do and charge a property tax every year? After all it's an asset, so why not tax it?

Ilovemyself, sorry again for the misunderstanding. I don't get what you mean by 'choice' though. In countries with more regulated and centrally owned rental sectors, there is plenty of choice. More so than in the UK, because rental properties are of higher quality due to regulations requiring landlords to actually do shit rather than just sit on their arse collecting rent paid for by taxpayers.

But surely renting privately has always been more expensive than council houses. The landlords in many cases are not making a huge profit but looking after their investment. I would imagine that having paid a mortgage, landlord insurance, and other misc expenditure, there isn't much left to profit from. If houses/mortgages were cheaper so would renting be cheaper. No?

The main thing that the government could do to reduce rents would be to dramatically reduce the amount of housing benefit that can be claimed. The consequence would be large numbers of people defaulting and being evicted leading to mass defaults from landlords on their mortgages. However this would cause mass homelessness and social unrest also so it can't really be done.

Well, they've already reduced the amount of housing benefit that can be claimed and the result is indeed more homelessness and debt. This is already happening.

I think the main thing the govt could do would be to re-introduce rent capping. It works perfectly well in other countries and it used to work here too. If you want rents to go down, then force rents to go down. Surely that is a more direct and effective means of doing so.

Wallison. No need to apologise. It's a lot harder than discussing face to face lol.

Having been through the torment of looking for a decent rentals operate a couple of years ago I found it a nightmare. Because I owned my own house I was not eligible for social housing. I needed to move as my wife was pregnant with our twins and our 1 bed shoebox of a house was too small.

I had a terrible credit rating and a number of pets. The pets would have been an issue with social housing.

We had to shop around and finally found a landlord that was fantastic and everything worked out, but we had to go through a lot of agents etc so the choice for us was vital. I am sure we are not alone in having trying situations.

That's why I like the wide range of choice. :-). Hope I made sense.

Oh yes and of course rents haven't actually gone down since the changes to LHA were introduced anyway. In fact, they have continued to rise since the cut - by 2% nationally and by 4% in London. So that doesn't work.

The problem with a blanket rent cap is that it is such a disincentive to invest in new housing which we urgently need (the idea to stop foreign investment in housing is absolutely bonkers). Capping housing benefit is a far more attractive option in my view as very few new housing is rented to people who claim hb anyway so we would not really harm new house building but the Government would also stop assisting the inflation of the housing market.

Sorry to hear about your troubles Ilovemyself, and I'm glad you've found somewhere now. Looking for a home is always stressful and it's good that things have worked out for you.

Surely you didn't really have that much choice though, did you? I mean, there were lots of avenues that were effectively closed to you because of the way that renting works in the UK - no social housing and having to jump through hoops for private rentals. I know I keep banging on about it but having seen how renting works in other countries where there is a massive healthy rental market that is properly regulated, where people are 'allowed' to have children and pets, where they can decorate and hang pictures and do everything to make their house a home, where they can stay for as long as they please and where what they pay is set centrally based on square footage, where having a landlord with proper repairing obligations and proper recourse for tenants should the landlord not comply with these - wouldn't that equal more choice, in terms of numbers of decent and suitable properties, than we have here at the moment?

Even though it hasn't actually worked seeing as how rents have gone up since the cap was introduced? And even though the only result has been more debt and more homelessness?

I'm with mumofweeboys and think the cost of rent in social housing should be linked to earnings. I know folks who were given council housing 20 years ago when they had small DCs and little income. Twenty years later they have plenty income, no children at home (so two empty bedrooms) and only pay £50 a week rent when they could easily afford to rent privately or pay a mortgage.

I don't think the cap has been set low enough but then to set it any lower is almost politically impossible my solution is more hypothetical then politically practical.

"Yes, you read that right, every single person in that family has been entirely dependent on benefits since before the First World war. They found this out by doing internet gynaecology."

Some things are too important to be left to poxy fucking market forces. A roofs over heads is one of them.

Yes you are being unreasonable.

Next.

Of course landlords are receiving huge profits potatoprints as they will eventually end up owning properties that have been entirely bought and paid for by tapayers.

A buy to let landlord round here who owned just 3 or 4 bog standard flats could end up with a million in his pockets he'd done nothing to earn.

I'd call that a decent profit meself.

Yes,tethers that post made me weep too.

Well actually it made to laugh tbh.

You couldn't make it up.

Oh wait..

Me laugh*

Not only politically impossible but I would argue pretty much practically impossible. It is already set at the third decile of all rents in any given locality. Just how much lower would you have it go?

If I do internet gynaecology, will I stop getting reminders about my smear test?

I honestly think that's one of the best things I've ever read on here, usual

As a Tower Hamlets resident living in a HA flat, I was all poised to make an incisive and well thought out comment and then I read that and just split a kidney laughing instead. Brilliant

Wallison. To be fair I am ip only used to the UK so no I haven't seen how other markets work.

There was lots of choice - just a lot of it was closed to us for one reason or another. What I was getting at was we finally found somewhere through that choice. Had there only been 3 or 4 avenues open to us and they had been cut off things would have been different.

I agree that more social housing stock is required - in my area locals do not want it built for fear of damaging their house values and the wrong sorts moving to the area. Even if I was eligible I would have to move out of the small town I live in as there have been no council houses on the published list for over 2 years now.

And stop apologising. I can come across as an arse, but at the end of the day I just get carried away with my passion for subjects I am posting about

I understand why it annoys people that social housing is so cheap in areas where some people are paying extortionate rent/mortgages for their properties, however, as has already been said, increasing rents would merely mean that high housing benefit is paid, not making any difference to the people actually living in the houses, but increasing the benefits spend further.

Agreed you could put all social housing in areas where rent is cheaper, however I am sure that people living in those more expensive areas use gyms, shops, public transport, refuse collection services and lots of other services delivered by people earning low incomes. Moving social housing tenants out of the local area, as they are priced out of the market, then means that everyone working in these low paid jobs has a long commute to work each day, at a high cost (even £5 per day commute would be more than 10% of a low wage (say £1000 a month - over minimum wage), which would then make it too expensive - and then who would do the jobs in these areas?

You need a mix of people in all areas to make a community work. Increasing rents just means shuffling higher amounts of money between the government, councils and landlords. Moving people out of more expensive areas has it's own problems too.

Afromom. As someone that is paying a lot more in rent than someone in the equivalent sized house does on a mortgage and certainly more than someone in the same sized social housing accommodation I am not annoyed with anyone who is paying less, and I certainly don't want to move.

I just want cheaper housing in this area!

I'm with mumofweeboys and think the cost of rent in social housing should be linked to earnings. I know folks who were given council housing 20 years ago when they had small DCs and little income. Twenty years later they have plenty income, no children at home (so two empty bedrooms) and only pay £50 a week rent when they could easily afford to rent privately or pay a mortgage

No you don't stop exaggerating. Someone with 2 spare rooms in a house then your talking minimum 3 bedrooms.

I'm fairly sure (but will check first thing in the morning) that the cheapest you can get a social housing 3 bedroom house anywhere in the uk is £70 pw but most areas have a minimum of about £90w.

If HB covered any portion of there rent then they don't have "plenty income" they will have income below the HB threshold.

Quite aside from social housing never being intended to be just for the very poorest.

Oh and because some people don't realise this.

If a sh tenant does not pay there rent they get evicted, just like private tenants even if they qualify for full HB.

Its the tenants responsibility to pay it there liability and contract is with the landlord not the HB dept even if they are council tenants.

An error in HB that they delay fixing is enough to get you evicted,the courts always take the view that the rent is down to you no matter what contributing benefit factors come into play.