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?)

I think the govt should work to build more public housing so that all disabled, elderly and low income people are able to rent these homes from the government at an affordable price. I don't like the housing benefit going towards paying a private landlord's mortgage/investment.

Once the low income people are all housed by the govt then the market rents should naturally fall as there would be less competition for housing. This would in turn benefit the middle income people who also have high housing costs currently.

The only people who wouldn't benefit from this plan would be the private landlords, but they can sell up if they choose to. And this will help in lowering house prices as well.

What benefit will there be to you OP, if others rents are hiked up so as to be unaffordable? The satisfaction of poorer people being priced out of decent housing so areas can be deemed 'nicer', me thinks. Cant have them lowering the tone of TH Docklands/Olympic areas when there could be nice, rich people living there, can we?

A couple of people have said that social housing isn't supposed to be for poor people.

I don't really understand this, I thought it should be for those who don't have any other choice due to their financial circumstances.

Can someone explain?

About building more public housing. What if they build it and sell it off at knock down prices into private ownership again.

bugster it was never intended to be for 'poor' people.

Originally all kinds of economic backgrounds lived in them. Then it became the big thing to buy...I think from about the 1930's.

They were well built and for everyone to use...

A fantastic thing.

As they were sold off, and not replaced ...there had to be a criteria for allocating it. As the rents are fair it now makes sense to offer them to lower income households.

There is a terrible pressure in this country to own a property. It shouldn't be...it should still be a choice where we spend our money!

but now they are absolutely needed for people on low income...

I still think a big (and probably painful) reformation is needed.
to level out the sometimes huge discrepancy in rent levels and to make the laws/regulations clearer and better for both landlords and tennants.

IMO the rental system needs better regulation but that should be for BOTH Landlords and tenants.

You have not really thought this through have you? Housing benefit is paid by the council. Council house rent is collected by the council so someone on full housing benefit, in effect, contributes zero to the council.

And that's the same whether rents are £50 or £500 a week.

So the only people this will affect are those paying their own rents.

And if they cannot afford their own rent what happens?

a) the council start paying HB to pay the difference, so no nett gain to the council but more paperwork, more people to process so council tax may have to rise.

b) they have to move somewhere cheaper, which means they might have to give up their job.

BTW it is only council housing that is cheaper, housing associations and other social landlords do have to charge market rent.

That's why my 2 bedroomed, one bathroomed, one living room bungalow is twice the rent of my neighbours', who back on to me, with 3 bedrooms, 2 bathrooms, 2 'reception' rooms.

What further regulations would you like to see apply to tenants? They already have to pay their rent, pay a deposit, pay for any damage caused, get out when told to, allow inspections etc. What else would you have them do?

Wallison - make it easier to get rid of those that are unscrupulous.

Our situation was our tenant stopped paying rent (he was still working, still spunking huge amounts of money on weekends away etc). We served a severance notice on him so we wouldn't have to take him to court. He wouldn't move out. He stopped all contact (was a friend) and so we had to take him to court.

It took 7 months to get him out, including a bailiff. When we got in the property it was absolutely wrecked. To the point of thousands of pounds of damage.

Our insurance wouldn't cover it because the policy was invalid because he wouldn't allow access to the boiler service man which was a condition of our insurance.

You got the property back though, didn't you? I mean, he isn't still there. You lost money, he lost his home. And yet still you want more.

Your gripe about lost rent and insurance is pretty illustrative of the shortcomings of expecting private individuals to provide something as important as homes for people to live in - most private individuals just don't have the capacity for when things go wrong, because they're doing it on such a small scale. Also, they take it personally, which is no way to run a business.

And why didn't you just take him to court in the first place? Would have been much easier and quicker. Again, a shortcoming of having unregulated, untrained and unsavvy private individuals providing an essential.

Wallison how about medicals...and perhaps a forced eating plan?

WTF Wallson - he didn't lose his home. He went on to live 6 months in a 5 star hotel. He could easily have afforded to pay us, just chose not to, wrecked the property in the meantime and that's ok?? It was absolutely his choice to get kicked out.

I didn't take it personally. I took it as someone who wasn't upholding their part of the deal and therefore it should be easier to deal with. Especially given it wasn't a situation where he couldn't pay the rent (which would have been a completely different situation) he just chose to live there for free.

You see the thing is I am a good, fair landlord. I undertake repairs to the property immediately. It is always maintained, I only ask for access when absolutely essential.

Renting is a two way agreement - both parties should play by the rules or suffer the consquences

A lot of council housing was originally built to house people from slum clearance schemes.

To give people safe decent affordable secure houses.

Which worked quite well until Thatcher sold them off.

Yes ladybryan. Well said. Because everyone that rents is not trustworthy and will default.

Well, he did suffer the consequences, didn't he - I mean, he lost his home. What else would you have him do? Be placed in the stocks perhaps? Or paraded through the streets naked while small children threw stones at him?

Feminine - I think that would not go far enough. I propose that tenants should promise their first-born to the poor put-upon landlord in perpetuity, as grateful recognition for their largesse.

I'm going to explain in small words as you're obviously not getting the concept Wallison.

(a) he clearly wasn't bothered about the home given the state of it.

(b) he COULD have paid the rent. He CHOSE not to. What would you have me do - allow him to live there for free perhaps?

You know what the consuequences are? I have a much tighter contract, I charge rent much higher to cover for such issues.

I am 100% all for unscrupulous LLs being dealt with. But people seem to be under a common misconception that all tenants are scrupulous. And that is absolutely not the case.

I get it. You want to make it easier to make people homeless. Fair enough.

People who don't pay their rent when they can absolutely yes.

People who are struggling due to circumstance I can/do help out

Well. And this is the kind of person that politicians have in their infinite wisdom tasked with the job of housing the rental population. Lovely.

Interesting that you make the judgement on the first part of my statement and not the last.

A LL who is flexible with people who are struggling and DOESN'T evict them - yes I'm the devil.

But I won't allow people to take the piss and spunking £3000 on a holiday whilst choosing not to pay £300 a month rent - should I have just smiled sweetly and said "ok"

if someone does not pay rent for 7 months, whether the house is social or private rental, they need to be evicted, unless there is are extenuating circumstances, which is why the process can only be actioned by a court.

Wallison I work with landlords and help them deal with issues caused by tenants like the one that LadyBryan had.

The law is very much on the tenants side. It protects the tenant at the detriment of the landlord. A tenant needs to be 2 clear months in rent arrears before a LL can serve notice. The notice then stands for a further 14 days and only then can the LL apply for a Possession Hearing via the courts. This may take a further 6-10 weeks for the date. Even if the LL is sucessful at the first hearing (and a clever tenant can make sure they aren't) they then have to apply for court appointed bailiffs to remove the tenant which can be a further 10-12 weeks depending how busy the courts are. In the meantime the tenant can apply for a further 42 days stay of execution.

So in theory a tenant can be in a property without paying a penny of tent for around 8-10 months. And trash the place.

Once the LL gets possession of the property in whatever state it is in they can then begin to try and recover arrears. Those tenants on low incomes or benefits can use their low income as a reason not to pay the debt. Which can be expensive and time consuming to even begin recovery on.

So although it is right and just that the tenant be protected at the moment this is at the detriment of the landlord.

Some professional LL's with a good sized portfolio of Buy to Let mortgages can absorb the costs. Smaller landlords or accidental landlords can't and risk loosing the property because of the actions of the tenant.

There are good and bad tenants and there are good and bad landlords. Rarely is the good tenant at the mercy of a bad landlord as they can choose to live elsewhere in most cases. Once a bad tenant is in your property as a good landlord all you can do is try and minimise the damage.