to ask why so many people think social housing is subsidised?

[butwhythen22]

Not a TAAT but inspired by a recent mention on here - one of very, very many.

I live in a council flat, FWIW.

So, so often I hear people say that it’s subsidised (the implication that someone else is paying part of the cost on my behalf).

This is not correct. The building is owned outright by a housing corporation. It’s a non-profit organisation that charges enough in rent and service costs to cover all its overheads, which are presumably many. This rent is, however, substantially lower than what the flat would fetch on the open market.

However, nobody is paying that “shortfall” on my behalf. It’s simply that the housing corporation’s mission is to provide affordable housing, so they are not charging more than they need to in order to keep everything running well.

(I don’t even receive UC or rent subsidies or anything like that, not that there would be anything wrong with it if I did. I support myself from paid employment.)

Why don’t people get this?

Next door is split into 2 flat and one of those flats pays over a grand in rent (don't actually know the cost because it's rude to ask, but when it was advertised a 2020 it was over a grand)
I'm assuming the housing associations don't have to pay income tax on the rent they receive like private landlords have too. So less taxes coming in to provide for social care for instance and those who benefit highly are those tenants who pay much less rent whatever their own income?

Notting Hill Housing Trust used to have wonderful charity shops - They probably own very valuable properties now, as when I was a kid, Notting Hill was quite run down- now it’s so valuable and gentrified.
NHHT was formed in response to slum landlord Rachman I think?

No not really. Because the original 10k wasn't funded by the government.

Social landlords are still building houses and they are building them at less cost to the organisation as they are partially funded by government grants. So subsided even if overall it's only a small amount compared to other ongoing costs such as repairs etc

You are correct but the ha in many cases do not own the land but do not pay rent for that land which belongs to the local authority. There's an opportunity cost in that if you weren't using the land for free, the council could make money. This isn't always the case, but subsidies, grants, free land all contribute towards your rent being lower and that is free

In the seventies, my partner was toying with the idea of renting. In those days you couldn't get a mortgage to buy a house to rent, you had to get much shorter term bank loan. The benefit of being a landlord is you could buy a second house as a vehicle for your savings, and get some assistance via the rent - you did not expect the rent to cover the full costs of acquiring the property.

As a result the deal was - you could pay rent, or you could pay more money in a mortgage but get your own house. Nowadays, in my area, you can pay rent, or you can pay less for a mortgage and get a house. That's the wrong way round. Rent shouldn't be more than a mortgage.

The lottery win couldn't have been that small!

There are more renters in private accommodation in receipt of housing benefit because the rents are higher. If you look at it that way the landlords are having their mortgages paid by the housing benefit of others. If there was more social housing it would actually reduce the housing benefit bill

My HA rent is £500pcm

Houses on the same street are £2500 private rent. It makes my eyes water!

Yeh it’s a piss take because the private rents aren’t capped or regulated. I know what I’d rather be forking out every month…x

I didn’t know that actually. I’ve learned something today, thanks.

This - the biggest subsidies are with private rentals.

I’m in a HA property - my rent is £900 per month, and I claim no benefits.

This is a lot cheaper than equivalent private rentals, in my area, but that’s down to the amounts private landlords are charging.

I don’t feel very subsidised lol 🙄

People see it as a subsidy because the “value” of the housing is market rate rent. By not charging market rate rent, the housing association is giving the difference between market rate rent and the rent they charge to their tenants.

The rents are not cheap or subsidised. The reason they appear as such is because private landlords are ripping the piss and charging what they like. All wrong

Subsidised is the wrong word but the rent is generally far more affordable than privately rented properties.

Also far more secure tenancies. In the private sector the LL can decide to sell up and tenants have to move on.

How do you get a social/housing association house? Are they open to everyone?

Not saying private landlords AREN'T ripping people off but their costs will be much higher as they'll have the much higher mortgage costs than social landlords. I know a lot of private landlords are selling up to bigger landlords because of both the increased interest rates as well as more legislation. Which is probably better in the long run for the renter from a safety aspect, but probably not financially.

Private renting is ridiculous I agree, been there too.

This. Economically speaking, they are subsidised. The difference between market rate and the HA rate is called the opportunity cost - i.e. it’s the money the council/HA is giving up by not renting it out for the most they can get. Any economist will tell you that an opportunity cost is equivalent to a cash subsidy, even if no money changes hands.

You have to be on the list and the list is very very long in places. You have to bide for them now, from what I understand.

The ridiculous cost of privates rents is a big factor in the cost of living crisis. No wonder people are struggling when they paying out out 2k a month on rent.

I'm another one living in a council house paying full rent. So yes council rents are a lot cheaper but that's cause housing costs have gone out of control and the government won't regulate them.

£10 billion a year goes on housing benefit to private landlords.

That's an actual subsidy, not an amorphous theoretical opportunity cost.

It increases every year too. Estimated to be £70 billion over the next five years. Happy days for landlords. 😐

Not a chance these days. Someone I know has been waiting 7 years.

I got mine 18 years ago. I was pregnant and waited around 14 months and was given a 3 bed house with a huge garden and drive. My partner had a min wage retail job and I worked previously but stopped to have my son. We lived comfortably on his min wage.

Just wouldn't happen today.

But what is the market rent if we're all subsidising private landlords with this £10 billion we're forking out every year?

Housing Associations charge the Local Housing Allowance rate for new tenancies where I live so they're sometimes more expensive than private rentals and private rentals come with carpets, fitted kitchens, etc. AND the rents go up each year where as many private landlords don't increase rents so I know several HA tenants who are paying considerably more rent than I am for a lot less in return.

I think there is some kind of criteria you have to meet, but you could be eligible and still never get to the top of the list as it's based on need, or you could get an offer fairly quickly. I do know people who have had offers and others who never got offers. I know it's based on things such as overcrowding and whether or not you're currently adequately housed, but you could check with your local authority what the criteria is. Where I live there are some really lovely HA properties. All the new build estates have to build a certain amount of affordable housing, so they look exactly the same as all the other houses on the estate except they all have a shed and they might be on a smaller plot or have a slightly different layout.