£55000 to give up my council house?!?

[Edenviolet]

AIBU to be in complete shock that the council offered me the above amount today to buy a home in the private sector if I relinquish my secure tenancy three bed council house?

It seems like an awful lot of money? Just for one house. Why don't they just build more social housing instead of paying out grants like this?

Bedroom tax only applies to those who get housing benefit.

And not at all to anyone 62 or over, HB or not.

The poster above me wants it rolled out everywhere.

It always seems to be those who put subsidised into their post seem to be the most ignorant about how it all works. It's fascinating shit really.

Rents that are lower than market rent (i.e. rents where others are willing to pay more) are subsidised.

Not really.
Market rents are inflated due to supply/demand ratio. If all rental housing was suddenly raised to market rents then market rents would fall. Mostly because the biggest payer of rent, the council, would no longer be able to pay the rents.
Also, just because something is cheaper in one place than another doesn't mean it's subsidised. Do tesco subsidise their produce because it's cheaper than the corner shop? Of course not.

Yeah and that... thrashed it out with those who were adamant that social housing was subsidised by the taxpayer over and over till its sunk in and now its subsidised because it could bring in more rent money than it does .

So they cling on to social housing = benefits and everyone pays bedroom tax.

It's weird man.. even dogs learn tricks quicker.

Housing Associations get state subsidy i.e. we tax payers pay. There have certainly been moves to consider if people like the late Bob Crowe and his partner earning well over £100k should get social housing or instead should pay full market London rents like most people on that level of income.

"Subsidies for new homes (often termed 'social housing grant') amount to sizeable public investments. In its 2008–11 prospectus, the Housing Corporation stated that in the three-year period to 2011 subsidy would be "at least £8 billion".[5] The majority of this would go to housing associations for use in development projects. Since 2003, in an effort to seek greater value for money, much of the funding by the Housing Corporation for new house building has been channelled to fewer than 80 "developing housing associations" that have achieved "partner status" through Partner Programme Agreements.

Housing associations borrow money to pay for new homes and improvements. After the Housing Act 1988, the proportion of the cost of new homes met by capital grant was scaled back by the Government, so borrowing became the primary source of funding for investment. Much of this was simply borrowed from banks and building societies, but after the late-2000s financial crisis these institutions ceased to offer long-term loans, so developing associations are increasingly turning to corporate bonds to raise funds for expansion.[6]

The HCA implemented a new Government policy of "affordable rents" for its 2011–15 funding round, requiring associations to set rents at up to 80% of market rents, so that less up-front capital subsidy would be required. In September 2013, a group of London Boroughs initiated a judicial review to challenge this policy.[7]"

@Ehric

the first part of your post agrees with what I said, even though you seem to be claiming it doesn't.

Tescos doesn't differentially price goods for different customers. that's what they charge and it's a business decision. customers can take it or leave it.

now its subsidised because it could bring in more rent money than it does .

that's what it means to be subsidised. a public asset is being let to certain people at a discount. if we were talking about land and the person was tescos, it would be obvious.

yanbu

OMG

keepitsimple0 JillyR2015

Something is subsidised if it is sold/provided at a lower prices than it costs to provide it, not if it is provided at below market rates. Sometimes in practice that means the same thing, sometimes not. Sometimes the market rate is far in excess of the cost of provision- this will be very true in any sector where private operators are making a profit. In fact, you could argue that the places most suitable for state backed (but not subsidised)/third sector intervention, are those areas where private individuals and entities are making a profit- it shows there is a gap between cost of provision and market value.

So it is quite possible for a someone to supply something at below market cost, still make a profit/surplus to re-invest, and not need subsidy.

There are additional ways to governments/authorities could support the social housing sector without direct subsidy i.e. backing loans, bulk letting in advance for housing benefit recipients thereby guaranteeing an income stream, allowing people on work related benefits to volunteer there without stopping benefits (although this should be voluntary, not some workfare slave labour scheme as currently proposed). Basically removing/offsetting some of the financial barriers to entry to a market, in just the same way private firms look for investors and partnerships to meet the same challenges.

Something is subsidised if it is sold/provided at a lower prices than it costs to provide it, not if it is provided at below market rates.

Why? Let's suppose the government has a piece of land and tescos is willing to pay 1m for it, but it gives it to sainsbury's for 1/2 m, without any reason. if it's a piece of land that is unmaintained, what wrong with giving it to a lower bidder?

land and council housing is a public asset, and if some people benefit from them disproportionately, then they are being subsidised.

that doesn't mean it's a bad idea to do so. sometimes, even in this case, subsidies can be a good thing. But it's a subsidy nonetheless.

Your family have health problems your husband might need to give up work in the future if his health gets worse it IS a lot of money but not enough for a deposit I think I would think very carefully before you decide if it was me I would stay where I was.

that doesn't mean it's a bad idea to do so. sometimes, even in this case, subsidies can be a good thing. But it's a subsidy nonetheless.

I'm always bemused by those who think that renting a public asset at less than market value is not a subsidy.

indeed. What moustache described is providing a service at cost rather than market value.

Don't give up the security whatever you do. The money will be earmarked for this as a grant from the government or from money raised from rents which they can't use for other council functions. But don't do it.

keepitsimple goodbyetoallofthat

Those kind of interventions can reset the market value, just as any increase in supply can.

So no market operators undercut competitors to win market share, thereby increasing revenues, enabling more investment and therefore increased market share, possibly even driving competitors out of business? Maximising profit isn't necessarily maximising margin.

keepitsimple

Oh and I specifically said providing it at cost plus some profit (somewhere in between cost and the market value as perceived before the increase in supply)- that profit to be reinvested to further increase supply, so I was definitely not describing provision at cost.

What happened to the government taking a chunk of the surplus profits from social housing? You dont see it mentioned much.. or does that not fit in the pigeon hole or something. Or doesn't happen anymore?

*genuine question

Gamer chicken - doesn't happen now. Councils keep all the rents now (localism act I think ) but don't get housing subsidy now either. So are self funding. And the rent income can only be used for housing purposes.

So no market operators undercut competitors to win market share, thereby increasing revenues, enabling more investment and therefore increased market share, possibly even driving competitors out of business? Maximising profit isn't necessarily maximising margin.

Sure. You see this in grocery stores all the time. I doubt it's prevalent in the rental market, where you enter into relatively medium-term contracts. I'm happy to be proven wrong, though.

Thank you stripey I was wondering.

Those kind of interventions can reset the market value, just as any increase in supply can.

they will have an effect on the market value, sure, but the main benefit of the lower market value will be given to a small number of people. Any big player can effect the market value, but by not having an open bidding system, you give certain people privileges denied to others.

your comment about business isn't apt. business don't prefer certain customers. they are out to make profit. the benefits of subsidised housing go to a minority.

As I said, I am not saying it is bad. but call it what it is. there are opportunity costs for the government. that's taxpayer money.

See its weird.

A lost or not taken opportunity costs the taxpayers money.

The mind boggles man.