To not understand how social housing is subsidised?

[Lighthouseturquoise]

I live in a housing association rented house.

My rent is £420 pcm, the house is valued at around £120,000. The house was built 15 years ago and was worth nowhere near £120,000 at that time and I doubt it cost near that to build.

I've lived here for 10 years so I've paid around £50,000 in rent. If I lived here for 25 years I'd have more than paid for the value of the house. Over 50 years the rent will have doubled the cost of the house.

In what way are these properties subsidised?

If a large private landlord were to put X number of rentals on the market every month, the price would be set at a level that only the X richest tenants were willing to pay. There would be no waiting list for the properties, because the price gets set at a point that causes supply to match demand.

The same would be true for a social landlord, if they set rents in the same way, but they don't. Because they don't set rents at a rate high enough to deter the surplus tenants, a waiting list develops of people who want to get something by paying less than the market price.

If there is a waiting list for social housing, that shows there's a subsidy. People wouldn't queue for something if they could get overall similar value from a private landlord, immediately.

Three, I work in this sector also, and also have a high level of understanding, in fact I work in G1/V1 graded HA, and we are a chartible status. I'm also a higher level than you!

You ignorance is shining brightly on this thread! "I understand it better than you"

Shockingly you cannot belittle people just because you work in this sector! And think you know better

As the rent in HA is generally lower than private rents, it allows tenants to save for a deposit to buy their own property - as the OP is doing. Sky high rents in the private sector preclude this 'luxury' and effectively trap tenants.

What ignorance Jamie? I'm not the one who doesn't know who owns the land my properties sit on

Aye, I understand economics perfectly. Your point does not apply to social Housing.

Your old school Three, because as of this year most HA and Councils tenants who are not in receit of benefits will be paying full market value on them properties!

Your properties? Do you own them?

I was more specifically talking about councils tbh, rather than HA, however HA are largely controlled by the government, as over 50% of there tenants are in receipt of some kind of benefit!

if they weren't most HA and councils would not have just been forced to make XXX redundancies and restructure their whole business!

if your house was built by a Housing Assocuation, then a portion of the money for the initial development comes from the Government and the rest is raised through private finance by the HA. Borrowing money obviously comes with a cost. The HA sets a rent which includes the repayment cost of that loan

Also, it could easily have cost more than £120k to develop your home. You have to consider land acquisition costs, infrastructure development etc. etc. Not just the build bricks and mortar to build your house.

Then the HA relies on the money they take in from rents to carry out their response maintenance and their investment in stock improvement programmes. Oh, and they have to pay their staff, suppliers etc. That all comes out of rental income too.

Jamie we seem to live in a different world. youre saying as of this year social tenants will start paying market rent? What are you referring to? I can assure you this isn't the case.

i don't believe you are CEO of a HA at all.

I am surprised about people complaining about Living and paying rent in Housing Association, if you are not happy move out?

There are huge waiting lists where I am.

Im a social tennant and i havent heard this! We dont receive benefits but could no way afford full market value!!

It's not happening sadmummy

I can assure you this is the case! My HA is doing it now, our full paying tenants are paying upto £200 more in rent pcm!

Who said I was a CEO

The usual bleaty sheepy landlord bashing.

Private landlords are in business to make a profit. Do you work for free?

Anyway, you will be pleased to hear that I have been providing free housing for several months and no end date yet. Aren't I nice?

AyeAmarok is completely correct, I will throw my hat in to the ring as the director of a housing research company. We work with councils for housing projections and if there is not market rent being charged (and market rent is not 'inflated', it's created naturally by demand), then it is considered subsidised.

Jamie- there is only one job higher than mine, and you said you were at a higher level.

Under why guidence have you increased your social
Housing tenants rent to market rate? That's not legal unless you're missing something huge out of this story....

I had understand what you're saying red rose and it's a point that can be made, but also disagreed with. I do think many parts of social housing are subsidised (council housing for example) but for a HA it "should" just be a product- who is subsiding it?
As I said in my first post I think the subsiding comes from the grant which built it in the first place, not the value of rent changed.

There isn't an opportunity cost In the true sense because you can't just decide to rent your social housing properties at market value. It's not an option (you can of course change tenure but it's not straight forward and is very unlikely to be approved en mass for all your units)

No there really isn't one job higher than yours Three.

Why don't you look at the summer budget of 2015, I'm sure that as a Finance Director you should know this, because ours certainly does.

Jamie under what directive or legislation? can you explain what you're talking about?

And no, look at your organisation chart.

I'm Really fascinated to know what jobs are higher than finance director actually (as well as why on earth you've put all your social tenants on market rent)

You must be mistaken, or very small and acting illegally.

If you owned it you would pay for repairs.

When I lived in council housing in London my rent was 500 the house down the road was being rented for 1300pm

It's very simple op

You likey would be paying double or triple what the council are charging you

Even %80 of market rate is still much cheaper

Aye, I can't see any way around it other than more intervention by the state to regulate tenancy rights and ensure employers fulfill their obligations to pay fair tax. Even the Victorians understood the benefits to their business of philanthropy and ensuring employees were decently housed in stable communities. Bournville is a prime example of this and the legacy is still their through the work of the Joseph Rowntree foundation.

Still there not there! Why do I keep doing this on Mumsnet!

I've looked at my organisation chart! We are 4 more titles above this and then our board members on top of this!

it may be how your sector works but ours does not. I never said all our tenants are on market rent either.

To give out this information I would be naming my HA, we are not acting illegally and neither are we a small business!