To think dh is winding me up when he says some people on benefits are getting £500 a week?

[angelos02]

I'm pretty sure he's talking bullocks? Otherwise why the fuck would anyone do a minimum wage job?

No social housing is not subsided, they make a profit , the rent is not inflated.
In the same way you can buy a t shirt for £3 at Primark or £30 at Hollister. Neither t shirt is subsidised.

No social housing is not subsided, they make a profit , the rent is not inflated.

making a profit doesn't mean it's not subsidised. they are making a smaller profit than they can by charging market rent.

The council, like everyone else, can't just inflate rents. LL can't charge 10x the rent they currently get because no one will pay it. They can't charge higher than the market rent.

In the same way you can buy a t shirt for £3 at Primark or £30 at Hollister. Neither t shirt is subsidised.

everyone can by either t-shirt. business decisions to bring in customers, and providing below market rents to certain people are very different things.

My rent on a tiny one bedroom flat in south east London is £1,100 and is the cheapest I could find in the area. Have recently become and a single mother so applying for HB. Not sure how much help I will get.

"If the council let places at market value they would make more money. Hence it is a subsidy to those getting below market rent (the subsidy is equal to what they could have let the place for against what they do let it for). Oh and letting social housing for market rates? Doesn't that defy the point of social housing?

"There is no such study stating that."

From the Government's own data, in the private rented sector, the average Housing Benefit is £107.28, meaning £5578.6 per year.

The size of the UK private rental market in the UK is worth about £88bn in rent per year.

1.2 million x 5578.6, is six billion six hundred ninety-four million three hundred twenty thousand pounds per year, now give a billion or so on top of the average this equates to 10%. Don't need no study, got an economist with the data at their fingertips right here.

"We could use the money for HB to actually build houses and sell them."

Not going to happen, one it steps on the toes of those in the market building houses, not politically expidient, not going to happen. Two, what happens to those that can't afford deposits? Where do we put them?

"Hmmm. perhaps 16% is small in your world, but it's actually a fair amount."

Proves my point, you think if it isn't paid you'll get it.

Greed and the green eyed monster are at the heart of your reasoning. Not logic.

it's going back a bit now but apologies yes, i took you to mean the rent was that not the HB contribution to the rent. was just shocked at the idea of council rent being that cheap - but i see it doesn't mean that as the average would include those who get £20 a week to top up income as well as those who get £200.

There are already housing benefit caps. I don't understand why they don't separate the caps.... x amount for housing based at the 30% median for the area you live in. And x amount for living costs?
Seems nuts to make it one figure.

In most areas the cap is under what the average rent per property is in on the private market.

There are already housing benefit caps. I don't understand why they don't separate the caps.... x amount for housing based at the 30% median for the area you live in. And x amount for living costs?
Seems nuts to make it one figure

This way, the emphasis is on the claimant not on the ridiculously high rents, so it fits the 'scrounger' narrative. THAT is why the government have done it this way.

i 'think' they would say it is so that benefit recipients, like other households, would have to, and could in theory, budget and make decisions about what they could afford based on their total income which would be paid to them.

rather than a situation where rent is paid for you to a landlord and the rest of the money is seen as disposable income.

whether that is the motivation really or the spin is up to you.

i suppose it does mean a family goes, right we've got £500 how do we make this go further? could we consider moving into a smaller place? when HB is paid separately and rent seen as separate to income you don't have the same.... motivation to look at your overall costs as those who live on right x goes in my bank account each month and that's what i have to live off of so no we can't afford to live in a 4 bed house, the kids will have to share for another couple of years till i'm earning more.

however i agree that it is a handy way to disguise the problem of rent prices and make it look like a pure budgeting issue.

i'd like to see rent controls or some kind of real effort to deal with the out of control housing prices.

i 'think' they would say it is so that benefit recipients, like other households, would have to, and could in theory, budget and make decisions about what they could afford based on their total income which would be paid to them.

But that's, bluntly, bollocks, because many, many working families receive top ups, especially in expensive, areas for exactly the same reason that non-working families do; because rents have spiralled out of all proportion with average incomes.

So a large number of 'other households' DON'T 'have to do anything of the sort; They CAN'T unless they choose to live in a shed.

And yet time and time again, the WHOLE of a non-working households income is compared to the earned portion of a working household's income. Which for people on average-low incomes isn't the reality.

There are a lot of posts on here which frankly don't understand the way benefits work.

1.2 million x 5578.6, is six billion six hundred ninety-four million three hundred twenty thousand pounds per year, now give a billion or so on top of the average this equates to 10%. Don't need no study, got an economist with the data at their fingertips right here.

that's your calculation not a study. and of course doesn't account for regions with high vs low demand. so, really, that's just not going to give you the conclusion you want.

Proves my point, you think if it isn't paid you'll get it.

I am not sure what that means. I don't expect a tax reduction, but I'd prefer we spend that money on growth expenditures like education.

Two, what happens to those that can't afford deposits? Where do we put them?

they rent because prices have come down significantly, or, like everyone else, move to a cheaper area and rent there.

if your happy with the current train wreck we call a housing system, that's fine. it's clearly not working, and more of the same isn't going to help.

I should have said, you don't know that 10%, even if uniform, which it isn't, won't affect the market.

I still think the caps are stupid. We already cap rents. Then previously income was made up of x amount per child and x amount per adult. So the only people getting crazy amounts as stated have a lot of children or live in very high rent areas.

You can't say x amount per child is required to cover their basic costs and then cap it once the children are already born. Its too late by then. They need feeding and clothing either x amount per child is required or its not.

Its expensive to move house. These people won't have access to a deposit on a new place or moving costs. Its too simple to say move.

And what about people who are only on benefits short term? It takes so long to sort out that often people are in debt before they have even started.

Ah but the "high and low areas of demand" are evened out by the average, so to get as accurate as we are going to get of the cost of private rent is to multiply the number of people renting privately on HB by the average, it takes into account the higher and lower demand areas because the level in low areas will be lower than average and in higher demand areas higher.

"they rent because prices have come down significantly, or, like everyone else, move to a cheaper area and rent there."

I'll address two points here, the "move to a cheaper area" argument doesn't count at all because its not always possible and frankly doesn't work for those in low rent areas anyway.

Secondly your point about the market, I think its fairly logical to conclude that as 90% of the private rental market are not on HB, and that HB has been lowering as private rents have gone up 5.1% outside of London and 7.7% inside London, that it isn't driving rent increases.

I'm not happy with the housing system, but suggesting that cutting HB is going to correct the current market failure is not a solution, as I said before the cost of HB is an effect of the housing market failure, not a cause.

" I'd prefer we spend that money on growth expenditures like education"

That's a cop out statement, a platitude designed to make your argument more reasonable, which it isn't and unlike mine is not evidence based.

Ah but the "high and low areas of demand" are evened out by the average, so to get as accurate as we are going to get of the cost of private rent is to multiply the number of people renting privately on HB by the average, it takes into account the higher and lower demand areas because the level in low areas will be lower than average and in higher demand areas higher.

I am not disputing you took the average correctly. I am saying that claiming that because HB is only 10% the market it won't affect prices isn't right. So, first, you don't know that. 10% could indeed affect the prices in the market. Second, the affect of high and low demand will create a heterogenous distribution of HB. So, HB may be collected more in some areas than not, and demand itself may make a difference.

HB is mostly collected in areas of low rental costs, by definition where most people living in the most need are.

I've demonstrated above how you can say that HB isn't influencing the market, when caps and specific rules are put in place to lower it as they were in 2011, but rent rises continue to go up, even as the number of people claiming falls from its highest point in 2012, you can accurately say that it isn't determining rental costs.

Lets round it up, HB payments have been limited and are lower than market average rent, HB claimants in the private sector are overwhelmingly located in areas of low rental costs, HB claims have fallen since 2012, HB only makes up 10% of the private rental market.

Yet since 2012, with the limits, the falling number of claims, and the small percentage of the market, rents have risen inexorably, which would indicate that HB isn't a determinant of rent prices.

Its a firm rebuttal.

HB is mostly collected in areas of low rental costs, by definition where most people living in the most need are.

except London.

I've demonstrated above how you can say that HB isn't influencing the market, when caps and specific rules are put in place to lower it as they were in 2011, but rent rises continue to go up, even as the number of people claiming falls from its highest point in 2012, you can accurately say that it isn't determining rental costs.

no you can't. you don't know there aren't other factors at play, and we know there were. house prices (as well as rents) rose crazily in that period. you don't know they wouldn't have risen faster if HB wasn't capped.

there were, however, studies that before 2011 that HB rose faster than people without HB.

Its a firm rebuttal.

sorry, it's just not.

That's a cop out statement, a platitude designed to make your argument more reasonable, which it isn't and unlike mine is not evidence based.

no it's not. we have a generation of young people with no job prospects, no chance at home ownership AND massive student loan debt.

"except London."

Especially in London the overwhelming majority of HB recipients are in lower cost rental areas. The largest mount of HB recipients are in social housing in London and not in the private market. Its ridiculously hard to get into the private market on HB.

"you don't know they wouldn't have risen faster if HB wasn't capped."

But HB was capped and rents still rose at far above inflation levels.

Your point about the studies showing HB causing rent to go up.

I assume you refer to the govt data on the market, which shows that between 2001 and 2010 there was a 45% increase in the value of private rents. However as CPI infliation averaged 3% within this time, it can likely be concluded that a year on year increase in average rent of abut 4.5% is in keeping with overall trends within the economy at the time.

Also during this time, spending on HB only increased by 2.5% which would indicate that HB was not keeping up with the market, nor causing the increases. The largest increase in expenditure actually occured around the time of the financial crash, the largest increase happened here in two years, spending went up from of between 0.2 and 0.3 %, between 2001 and 2007, to 0.5% in 08/09, and 0.9% in 09/10.

Thus further demonstrating my point of the disconnect between the two.

"sorry, it's just not."

It really is, you keep telling me I can't say other factors are at play, when I've firmly linked the trends in the market, you use no analysis, no data, just make woolly assertions.

I on the other hand can clearly link market based data, with government statistics to prove my point.

Easy :)

"no it's not. we have a generation of young people with no job prospects, no chance at home ownership AND massive student loan debt"

Hyperbole, we don't have a generation who have no job prospects. We have a generation who may struggle to buy homes in the South East and London, however blaming this on HB is conflation.

Its more to do with chronic under supply of housing for nearly 30 years, which of course is the main determinant of rental prices too. We've under built by about 200,000 homes for over 30 years, so are around 6 million homes short.

But blaming housing benefits for these issues is complete conflation and it totally undermines you're arguments.

Especially in London the overwhelming majority of HB recipients are in lower cost rental areas.

no, they aren't low rent. they are lower rent, and demand is still high.

But HB was capped and rents still rose at far above inflation levels.

again, how do you know there aren't other factors? You keep saying that, yet you haven't addressed the idea that rents may have risen faster if HB wasn't capped. You just keep saying that is if someone is claiming it's the only factor in rent rises. If there are multiple factors, removing one may still result in rents rising, albeit slower.

I assume you refer to the govt data on the market, which shows that between 2001 and 2010 there was a 45% increase in the value of private rents.

nope. a study comparing rent rises in private rentals in homes that didn't collect HB to homes that did. Rent rose faster in homes that did, which makes complete sense.

It really is, you keep telling me I can't say other factors are at play, when I've firmly linked the trends in the market, you use no analysis, no data, just make woolly assertions.

you are definitely giving a lot of data, but that doesn't mean you are interpreting it correctly. it's commonly known that it is difficult to make conclusions when changing one of several causes to something without controlling the others.

Its more to do with chronic under supply of housing for nearly 30 years

I absolutely agree that's one, of many, causes.

"a study comparing rent rises in private rentals in homes that didn't collect HB to homes that did. Rent rose faster in homes that did, which makes complete sense."

Link please. It would be really intersting to see that study as it goes against a number of others, and the governments own data, and I haven't been able to find one stating otherwise.

Demand doesn't involve the setting of social housing rent btw, that's why its lower, because its aimed at getting people housed who wouldn't normally be able to be housed.

"yet you haven't addressed the idea that rents may have risen faster if HB wasn't capped"

But it was capped, and the number of recipients fell, whilst private rents rose, so this therefore indicates that HB isn't a determinant of price in the private rental market.

"May have" doesn't come into at all, that is what happened, it demonstrates a trend, and easily identifiable one.

The chronic shortage of housing is the driver of increasing rents, anything else is going to have marginal effects. It comes down to a simple supply and demand situation.

I can't find the study, but here is an article in the economist with the same claim.

I just read the article. A lot of the numbers are dire (like HB recipients make up 40% of the private rental sector. if that's not the sign of a dysfunctional market, I don't know what it), but that might be better now because of the cap.

But it was capped, and the number of recipients fell, whilst private rents rose, so this therefore indicates that HB isn't a determinant of price in the private rental market.

I don't know how else to explain it, but I will try for a final time. Simply changing one of multiple causes doesn't give you that conclusion. For example, you don't know that rents wouldn't have risen faster without the cap. It's entirely possible (and likely in my opinion) that caps DID make a difference by slowing rapid the rent rise. You are just repeating yourself, and not addressing my point, no matter how much you think you are.

The chronic shortage of housing is the driver of increasing rents, anything else is going to have marginal effects.

oh, so it's gone from not having an affect to having a marginal one? How do you know how marginal it is?

It comes down to a simple supply and demand situation.

Yup. what do you think giving a huge portion of the population extra money to pay for rent does? Perhaps increase demand?

Anyway, getting back did angelos and her faux-innocent goadiness for a moment; Why?

Undercover viral marketer for the Tories?

Or just recreationally disingenuous?