to think if you earn over £60,000 and still rent your council home

[RedHelenB]

that in fact it is a lot better than if you had bought it cut price? At least it will go back into the general housing stock when you no longer need it.

^Council rents are not subsidised.

OK, in that case it's easily possible to create huge amounts of extra council housing. Councils buy up every private property that comes on the market, borrowing money to do so. They let the properties at typical council rents, out of which they pay for the loans and for maintenance, just like private landlords.

Clue:- if above doesn't actually work, when you run the numbers, it's because the premise was false.

Further clarification for the really hard of thinking: the premise is false.^

Between 2008 and 2011 the Treasury made a £712 million Profit from LA housing providers ,thats in addition to the 25% that LAs are allowed to keep .

Clue:- the word PROFFIT & £712 million

I got my last sentence completely the wrong way round. A single mother on benefits needs cheap rent. Someone on 60K can afford to pay a realistic rent. They might not like a rent increase, but its not going to make them homeless.

sadly, fraidycat, that doesnt work now as people can buy their council house at 70percent or so of its value. so if the council bought for 100 000 and then had to sell 2 years later at 70000, they will run at a loss

they are not subsidised

they are not rented out for the maximum amount it might be possible to make. in the past this was because the role of govt was not to screw over its subjects to the max. instead, it used to provide cost price gas and electricity, and cost price housing

dont worry, the private sector makes a killing off the taxpayer from housing benefit to private landlords instead. yay for the private sector.

apparently my local council has bought back a large number of ex council houses

so maybe your argument is right

Okay whilst I think (and have already stated) that council house rent should be on a sliding scale reaching similar levels to private rents according to earnings, I seriously think that only letting poorer families live in council houses houses is going way too far. I really can't understand why some posters think that only the very financially needy should have a council house.
Can you imagine if new legislation was brought in stating that only higher earning working households could be given council homes from a defined date because the govt have decided that too many estates are overrun with unemployed households and it is damaging society. Can you imagine what social uproar that would cause? It would make the bedroom tax look like a generous policy (I detest the bedroom tax as it targets the most vulnerable). It isn't okay to have council houses reserved only for the higher earners, nor is it okay to reserve them solely for the poorest few %.

I think raising rents slightly for those on higher incomes is less harsh than the bedroom tax has been. Anybody with any income should be eligible to get a council house, subject to availability, and stay there as long as they wish so long as they pay rent according to their income.
Nobody should be turfed out of their home just because they have worked hard and earn more than their neighbours. But I do think that a percentage of tenants would move on willingly if they are paying the same as what they would as a home owner and then new tenants could have those houses for as long as they need them.

Rubbish, fraidycat.

The part of the premise which is false is your part:

"borrowing money to do so. They let the properties at typical council rents, out of which they pay for the loans"

The councils are not buying the houses now. They bought before, at significantly lower real prices, and have long ago amortized the cost.

Though as it happens, it may also be the case that councils could afford to buy now and still cover costs out of rent. Their capital, credit rating and costs are going to be reyther different from Ms Petit Landlady going down the Halifax for a BTL.

Shame about those central government restrictions on them doing so, and particularly in using their rental income. It's almost as though once-upon-a-time someone in central government didn't like the idea of council housing.

Norudeshitrequired

I 100% agree with your post. Raising rents for those on higher incomes could generate income to help people who are unfairly affected by the bedroom tax. (Ie. disabled people or those who can not get a smaller council house)

Urgh, talk about going round in circles.

Some councils may be making a profit on some council houses because the houses are old and the financing from them has now been paid off, so it would be like a landlord buying a flat outright with cash, rather than a mortgage, or maybe someone inheriting a property with no mortgage. Most of the income they make, less maintenance (and taxes etc) in a net income.

This does not mean than it would make good sense to rent a £1000 a month property out to someone for £300 because that is your fixed costs. The opportunity cost of this, the income that you would forgo, is £700. Especially if it means that the lack of that £700 means that the landlords family can't afford food or heating.

Which is effectively the position that councils are in. People who can pay a market rate of rent for their council house should do so.

yanbu

Exactly. People who has sufficient income to pay market rent should do so.

Whatever the semantics of the words you choose to use, council rents are far cheaper than current market rents. That's why those in need should be able to get a place where rent is less to reflect their need, and those who are in need shouldn't benefit from it or be allowed to take up the finite numbers of social housing available.