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.

"Firstly, many families on lower incomes don't create any social problems at all. Secondly, with housing costing what it does, the range of people who might prefer to rent public housing stock would I think be pretty wide."

I would argue that 99% of low income families create no social problems. I have never met a socially dysfunctional family which wasn't on benefits. Socially dyfunctional people are usually completely unemployable and end up in council housing. One problem family can make life hell for the 99 families in the street.

CaisleanDraiochta Tue 07-Jan-14 16:52:37

What an excellent post.

Really made me think and will definitely be useful in future debates, thank you.

"Trust me she knows exactly how to play the system and how to benefit from it Its totally unfair ( in my opinion ) she could have gone into rented - where she live the rents aren't that high so she could have afforded it through HB ect but she waited and played the system to get her flat "

If she is that much of a idiot with money I doult that many private landlords would have touched her with a barge pole. There needs to be a certain amount of social housing for people with poor credit ratings.

I believe that everyone deserves a roof over their head, but some people make life very hard for themselves. Prehaps we should put all the problem tenants on a desert island, but that would be immoral even by lowly standards.

There is no land to build new Homes on I can think of 4 areas straight away where Land has been bought, stripped/demolished and then left empty for the last 3/years. All within a few miles of my home. One of which I used to work in and would make brilliant flat conversions as used to an Office Complex. Why they've been left to deteriorate I will never know.

Hmm interesting. I had a look at property prices on Right Move last night. The cheapest rental apart from studios in my local area is a flat on a council estate. 2 beds unfurnished, basic kitchen and bathroom for £425 a week! How can the average person afford that?

reincarnated are you sure? Where do you live? I rent out a really nice property (3 bed house, quiet private estate, walking distance of great public transport, zone 2, solid wood floors), in a posh part of London, with a garage and south facing garden, for less than that.

No they are not comparable as things stand, but don't you think it would be better if they were? Don't you think having somewhere to live should be a basic entitlement? which would you prefer for you child if it really came down to it-

Well I haven't yet met a family with young children who are genuinely homeless (as in on the streets). There are plenty bunking up with family in totally overcrowded conditions. There are plenty of families in homeless accommodation. But I can't imagine there are many that are actually on the streets homeless with their children. There are plenty of single people without children who are actually homeless.
Families with children get priority for housing and if no local authority housing is available then accommodation will be found for them even if it's temporary.
Of course it must be horrendous for those families, I'm not even going to try and pretend that it isn't.
But having poor quality temporary housing means a roof is over the children's heads.
Lots of people are living in less than ideal conditions, but lots of children are attending less than ideal schools too. The simple answer to getting better is to pay for it.

No family earning 60k need to be paying subsidised reduced rent in a council home.

To me, it's quite simple. Couple earning low wage get council house. Lower sent gives them a chance. They work hard/get lucky with their careers and earn more, their rent goes up a bit. They get really lucky and one of them is earning £60k, they then either move to a new area and buy, private rent, or if they are really attached to their home, they pay the market rate rent for it. The extra income the council gets is used to build more council houses.

If £60k times 3 doesn't buy you a naice four bedroom family home in your area, then you either live in a less naice one, a smaller one, a different area, or you don't choose to have 3/4 children unless you are happy to have them share. You don't hog your council house on reduced rents, pocket the extra money and be the cause of someone in real need not getting one.

And to all those saying council houses aren't subsidised... There is an opportunity cost to the public purse of you being in a council house and paying below the market rent, the forgone rent them cannot be used for other public services that are in dire need. If people earning anything over the average wage for that area are made to pay market rate rent, then this would be fair.

It's not subsidised or reduced.

Why is it the council housing that is out of kilter not the fucking ridiculous free market housing boom and bust bollocks?

Really tired, yes I agree with you (and should have said " 99%" rather than "many")

It's rent set at a level that is below the going market rate, so how can it not be subsidised or reduced? It's reduced to a level below where the market would price it, therefore the taxpayer/council is subsidising it.

What am I missing?

The only thing that will lower the market price is more supply.

Prof plum - I live at the dreggy park of Portobello Road. Yes it is true unfortunately.

reincarnated Ah, yes, I can believe that rents are unaffordable in Notting Hill. I guess when you are on a low income, you live a little further out. Or in Sarf London, parts of which are actually lovely.

Billybanter of course CH rents are subsidised/reduced: The council owns housing stock worth, say, £200million. If they sold that housing stock, they could invest the money at, say, 3%. That would give them an income of £6m a year. Instead, if they rent it out at a below market rent that only covers maintenance and other running costs then they are effectively "spending" that £6m on a rental subsidy. The true cost of a CH has to include the cost of finance, just as a private company would account for it. Of course, the council may even have built the CH on credit, in which case their COF is even higher.

Or look at it another way. If the council let out its CH stock on a market rental basis, then it would have a lot more income which it could use to relieve poverty. That's fine if the subsidised/reduced rent are to those in need, but not if the reduced rent is given to someone who is relatively wealthy. Whether or not that is £60k income or £70k income, or whatever, may be a moot point, but there is a level of income above which it is simply wrong to be taking housing from those who need it.

Council /ha rent is subsidised. Of course it is, or it would be the same price as the private sector rents. People whose visas say they have no recourse to public funds are not eligible for social housing.
Where do people get the idea that it isn't subsidised? The fact that the rents cover the cost of maintenance is irrelevant.

I live in a council house, between me and DH we are nearing the £60K income. We've lived here a few years, we don't want to buy a house, don't want to get a mortgage. We don't have such a high demand for council housing (very rural northern). I've just had a quick look on right move for my area and there are a lot of houses that we could rent privately cheaper!
I always was of the opinion that we pay full rent to the council who built the property in the 30's so presumably don't have a mortgage/loan on now. If a person was renting who claimed HB then the council wouldn't be getting any monetary benefit as they'd effectively be paying themselves.

This is another example of the government's 'success' in making large numbers of the population believe that vast numbers of other people are playing the system or gaining unfair advantage at the expense of the 'honest hardworking taxpayer' . It's fair easier to encourage everyone to point the finger at those who are deemed less deserving of a basic human right than it is to deal with the fact that there isn't enough affordable , good quality, secure housing .

Anybody with a secure tenancy would be foolish to give up it for moral reasons, because the rest of the housing market won't apply the same morals to those who have altruistically made a HA/ council home available by moving into less secure, more expensive private rental.

We seem to now view council housing as emergency accommodation which should only be available to those in most dire need- surely it would be better to view it as the most efficient and cost-effective way to provide significant amounts of housing, and enable local authorities to actually build enough of it? The RTB scheme underpins the current shortage- it's a bit disingenuous to blame the councils for not re-investing the money in new housing stock; part of the policy meant that they weren't actually allowed to use the money in this way.

far easier, not fair.

Onewomanandherdog

I am really confused by your post. Its interesting that in your area council property is on a par in rent with private rental. I suppose that is why there is no serious shortage of council housing. The people who cannot get private rental (due to poor credit) are able to get a council/ housing association house. Other people who simply need somewhere to live are able to rent privately and get their rents topped up with housing benefit if need be.

"If a person was renting who claimed HB then the council wouldn't be getting any monetary benefit as they'd effectively be paying themselves."

HB is means tested and its the tax payer who is paying that person's rent rather than the "council". In many ways its makes sense for large landlords like the council or housing associations to take people on benefits as they can cope if there is an issue with rental payment far better than a small land lord.

Blimey, do you loons think Sainsbury's is subsidised if it sells bog roll cheaper than the corner shop?

Rather than having a different business model or overheads?

Sainsbury's may even be making more profit on each lower price bog roll.

(Could be any two businesses with vastly different overheads or model, so don't bother with any "Ah but Sainsbury's specifically..." squirmification.)

ProfPlum, your little piece of financial wizardry is pretty much the model which caused Southern Cross care homes, to close, leaving the industry scrabbling round to find new providers for 31,000 vulnerable residents. It's also what caused the failure of endowment mortgages, IIUC.

That's because those clever calculations fail to include or properly understand risk. Which, surprise surprise, is the same failing which caused the banking crash in the first place.

Anyone who approaches very, very long term financial matters (as housing is) with statements like "invest the money at, say, 3%" has so many red flags waving over them they look like the Red Army.

"Blimey, do you loons think Sainsbury's is subsidised if it sells bog roll cheaper than the corner shop?

Rather than having a different business model or overheads?"

Neither Sainsburys nor the corner shop have to ration toilet roll.

Anyone has the choice whether they go to Sainsburys or the corner shop to buy bog roll. Most people do not have the option of council housing because they don't have enough points. (Ie. they are not a single mother on income support who has been kicked out of their previous accomdoation.)

I am happy for the state to provide cheap accomodiation to those who need it. However if someone's financial circumstances increases then surely they can pay the same rent as someone in the private sector.

It stinks that there are families in povety in private rental. It stinks that these families are getting less help than in the past when there are better off families enjoying cheap council rent. What is so f*cking difficult to understand.

Nice try, but I'm dealing with the claim that if A sells a product cheaper than B, then A must be subsidised.

It ain't true.

^Council /ha rent is subsidised. Of course it is, or it would be the same price as the private sector rents. People whose visas say they have no recourse to public funds are not eligible for social housing.
Where do people get the idea that it isn't subsidised? The fact that the rents cover the cost of maintenance is irrelevant^

Just because something is cheaper from one supplier than another doesn't mean its being subsidised.The difference between a public and private landlord is that the private land lord is running a business and is out to make a profit !!

I own a house that I rent out,I actually charge less rent than the equivalent council rent would be(family member) and I still manage to make a nice little profit on it.
The rent more than covers the cost of maintenance and management - its the same for social housing.

Most council houses were built decades ago,building costs were lower and are therefore making a profit as the building costs costs have long been recouped.

There is also the fact that Most public Housing is now being run by housing associations which are "not for profit organisations" and therefore not allowed to make a profit which of course makes rent more affordable.

The analogy of sainsbury and a corner shop does not really work. Both Sainsburys and the corner shop are businesses and they charge as much as they can get away with. The corner shop charges a premium for convience and if sainsburys was not cheaper than the corner shop no one would drive there.

Councils and housing associations are closer to charities than businesses. Even social enterprises are different from normal businesses in that their primary aim is not to maximise profit. I see nothing wrong with someone in need having a charitable handout as I don't want anyone on the street. However charitable handouts (ie. accomodiation with incredibly low rent) should be allocated on need.

People with high income should not be allowed to sponge of charities/ social enterprises or the state. If council or housing association is a social enterprise then it should be maximising its income to help those in true need.

Still repeating here: A and B charging different prices does not mean A must be subsidised.

It doesn't even mean A is making less profit in the long term.

(RT, I could give you a list as long as your arm why sellers charge different prices, starting with to "charge as much as they can get away with" isn't necess their aim. But actually, the first sentence is all I want to say.)

*Still repeating here: A and B charging different prices does not mean A must be subsidised.

It doesn't even mean A is making less profit in the long term.

(RT, I could give you a list as long as your arm why sellers charge different prices, starting with to "charge as much as they can get away with" isn't necess their aim. But actually, the first sentence is all I want to say.)*

I agree,nobody seems to be able to provide any credible evidence to prove that social housing rent is subsidised.

I thought that generally Mnetters were an intelligent breed and could actually work out that it doesn't cost anywhere near the amount that is charged in rent for council houses to maintain them and they do in fact make a profit for the treasury !!!