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?)

BrokenSunglasses Fri 16-Aug-13 14:03:30
"I agree with you if you're talking about London.

I don't think it's right that some people get such cheap rent in areas that the majority of people couldn't afford to live in. It's just plain unfair."

Even expensive areas need people to do badly paid jobs: street sweeping, catering etc. Commuting is hideously expensive. If we don't to pay them enough to either rent at market cost or to commute from a cheaper place, and if there is no subsidised housing, then they will not be able to afford to do those jobs. If the wealthier Londoners are not prepared to subsidise the less wealthy, then the infrastructure required to support them in their well paid jobs will not be available.

It is all very well saying poor people should move to cheaper parts of the country, but how are you going to cope when nobody is doing their work?

but how are you going to cope when nobody is doing their work?

you manage without the job being performed - or you pay more money to do the job.

Absolutely, FasterStronger. But I don't think people have necessarily thought this through and considered how many poorly paid workers are essential to the smooth running of their daily lives.

FasterStronger - we did go through the courts. (Actually first we tried to do it just as an eviction notice so he didn't have the record). From starting the court process it took almost 6 months to the day until the bailiffs came and threw him out.

Froubylou - I wish I'd known you last year

I have kept an eye on this thread over the last couple of days but apologise if I'm repeating points.

OP, the reason it would be so bad to suddenly triple social housing rates is because the people in social housing don't have the resources to cover the cost of either a rise or a sudden move and without any social housing have literally no where they can afford to go. Housing benefits have already been capped - there won't be any significant rise imo no matter what circumstances change.

Again imo, the only way to introduce meaningful and long lasting change is to invest in the stock of social housing available with the income going straight back to the council/charity who own the properties - a complete cycle that becomes self-funding and perhaps even profitable at some point.

Current changes have been made seemingly without a thought for what actually is available to anyone on low incomes (working or not) with the flimsy solution of 'the market will correct itself'. I'm skeptical that it will tbh, I'm also concerned about what happens to peoples lives whilst this supposed market correction is taking place. Wages aren't rising significantly, housing costs aren't suddenly dropping to affordable rates so what are people meant to do?

Move is not an answer. Moving takes time and money. I very much doubt there are thousands of people sitting in low paid jobs thinking they should now go and get that £30k a year job in Leeds where the rents are cheaper - they just couldn't be arsed before and you know, caring for dementia patients, portering, working in a warehouse 24/7, looking after their bedbound father is just so easy.

Never mind that I've never heard people talking about how easy it is to relocate your whole life and family - but people without money should just take it on the chin and tie up their possessions in a handkerchief and go off to seek their fortune?

On paper there are are so many solutions to housing, it's easy to forget that those figures represent actual people and their homes. The temptation to go not only for the solution with the lowest figure but one that generates private income is massive - it's also inhumane. We're all entitled to shelter, even with the economy the way it is, we are not a poor country there is no reason for people to be so stressed about one of the most basic human needs and it's a smokescreen to offer up the promise of profit to those who can get a toe in the water to get public support.

But froubylou, as I said to poor old LadyBountiful upthread, the process ends with the tenant getting evicted. Sure, the landlord might lose some money. But the tenant loses their home. I actually think the timescale is reasonable - going to court is never going to be a quick solution, but a few months is a fairly short time for due process to take place. The alternative would be to do away with due process, which I'm sure the lovely landlords on this thread (landlords on mumsnet are always lovely - I know because they tell us they are so it must be true) wouldn't want.

Oh FFS ladybryan. You are making out that the problem of poor tenants is a massive one and that poor landlords need protecting.

I am normally on the side of the landlord, but the way you talk about tenants I wonder why you bother to have a property that you rent out. After all, you are only going to get shafted by the tenant.

It is nowhere near the level you have suggested, so why do landlords need more protection

I'm not at all Ilovemyself.

I am talking about my experiences, if you can point me out where I said "all tenants" I'll happily correct myself.

It doesn't matter whether the problem of unscrupulous tenants (i.e. ones who can pay who won't) is one/ten/a thousand. It should be easier to deal with IN THIS SITUATION. I'm not sure how many times I am going to have to say before people actually bother to read that if there is a genuine situation, then I'd be happy to be lenient and allow the tenant some leeway. The majority of tenants are lovely, all my tenants have been great bar one.

I rent out because it isn't worth selling at the moment. But for your informaton, the rent I charge covers the expenditure. I make no profit on the renting. I have had many positive experiences.

Clearly the small words weren't working eh?

He lost his home through HIS choice. Absolutely. He wasn't destitute, out of work, struggling. He was CHOOSING not to pay rent. That doesn't make him the victim.

Unbelievable. Tenants in this country are at the mercy of unregulated, unlicensed individuals, have no rent controls, no security of tenure and consequently no real way of enforcing the very few rights that they have, but the real problem is the fact that you have to go to court to kick one out of their home.

There is more protection given to tenants than to landlords. And that is the way it should be. A tenant has more to lose than the landlord in that the tenant can become homeless whereas the landlord only can lose an investment property.

However a small percentage of tenants know this and manipulate the system to their advantage. Because of this it causes landlords to be more particular about who they let to and less likely to be lenient in genuine situations.

From speaking to landlords this is one of the main reasons the majority won't consider housing benefit tenants and why many use letting agents to manage their property.

Because there are then extra costs involved when using an agent the costs of rent go up.

If the rent on the property is £600 pcm and a landlord has lost 6k in rental income and legal costs that is 6k they don't have to spend on the property if it could do with a new kitchen or bathroom etc.

So bad tenants don't only cause issues for the landlord but also for other tenants.

And because of the demand for rental property the landlord can afford to be picky.

This debate irritates me more than any other. It has such a simple solution. Build more social houses of various different sizes. That way, those who want to downsize can, families can live in affordable homes which will then remove some of the demand for private rentals which will result in lower rents in that sector, making buy to let less attractive and thus creating more cheaper homes for first time buyers. I've got it all wrapped up, me.

Ahahahaha! You're joking, right?

Outside of the six months shorthold period, landlords can give two months' notice at any time for no reason, which completely negates any of the few sparsely-defined 'rights' that tenants do have.

Social housing was built to clear slums, as low-income people could only afford rents in these areas. Now people want the garden sheds in Slough back because that's what poor people in low-paid jobs in high cost cities deserve to live in.

Be careful what you wish for.

It's all very well calling for lots of new social housing, but where is it to go? There is no spare land in the cities. You can either build tower blocks that no one wants to live in, or houses miles away that mean expensive commuting.

Well, aren't there something like a 300,000 houses that are long-term empty around the country? Give councils the power to compulsorily purchase them, for starters. There is also a load of old housing stock already in the public sector that needs renewing/replacing. No need for find land for that either.

No need to build on land in central London either - isn't One Hyde Park Corner pretty much completely empty as the flats were bought up by overseas investors? Compulsorily purchase that as well and give them to council tenants - at least they'll make use of the bastard place.

but are the 300,000 empty properties where anyone wants to live/work?

also - we don't want to increase the national debt. so where would the money come from to buy the extra houses?

and the answer is not scrap trident etc - because you might think that's important, but most people don't want that, so you need to come up with a populist way to get the extra money.

I think part of the problem is that the properties that are empty aren't necessarily the ones that there is demand for. Around here there are plenty of what I would have classed as "first time buyer/renter" houses available.

But I think the demand is for the larger, family properties of which there aren't as many.

Building publicly-owned houses is an investment, not a debt. It's an investment that pays for itself through rent revenues. Or we could just carry on as we are spunking £20 billion a year on housing benefit, and say that we can't afford to build houses because doing it this way is so much cheaper.

There are 170,000 houses in London and the SE which are empty - 55,000 of which are classed as long-term empty. If people were living in them, that would help at least a bit, wouldn't it?

wallison Building publicly-owned houses is an investment, not a debt.

only if you fudge the maths and ignore the opportunity cost of letting property at below fair value.

Council rents are at fair value. It's private lets that aren't.

I suspect the amount we rent our house out for is less than council house rental.

Back following phone call. What I was intending to say was: -

We never intended on being LLs. And certainly not with the house we rent out. But when we made that decision I made the decision to do it well, do it properly and treat my tenants well. And we do.

There does seem to be a mentality that it is always the LL that is at fault - throughout this debate my point is that is not the case.

Barrett homes seem to have no problem finding land to build on?

Perhaps instead of the government cooking up new ripoffs schemes to encourage people who haven't got the money to buy and prop up their voters housing prices, started putting the same energy into building a social housing portfolio that could gradually help the market correct itself and stabilise without crossing their fingers and hoping for the best.

It's long term thinking that's needed not 'next election' flirtations.

People like LadyBryan (and do correct me if I'm wrong this is all presumption) shouldn't find themselves as landlords simply because of the state of the market. Most people get on the housing ladder with the intention of it being a personal investment not becoming landlords. I've lost count of the number of people I see saying they only rent because they can't sell - they should be bloody angry at being forced into the position of a business person selling a fundamental need because government policy dictates their investment should now be counted as housing stock. They're effectively keeping you from selling your property and moving up the ladder by not sorting out the mess that is social housing.

X-posted with you there LadyBryan.