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?

A lot of people assume that people in council/ HA properties are also claiming housing benefit, which would mean they are being subsidised in that respect.

Housing associations also provide secure, well paid jobs for a lot of people. The one near me also reinvests profits into the community, providing activities and services for young people and other groups.
A private landlord is just looking out for their own interests and their tenants are usually getting their rent topped up with benefit payments.
We need more social housing.

I thought everyone knew this and it was more about 65-70 percent of social housing tenants are in receipt of housing benefit, so the state pays?

Actually that’s not right, it’s 25-30 percent of private renters get housing benefit and 65-70 of social housing.

In that case private rentals are subsidised too because the correct market value is inflated by HB, a government handout
Not to mention all the other ways that the government inflates the cost of housing, help to buy etc. The government do not protect the interests of ordinary people, the people who do the work that keeps the wheels turning. They protect the interests of the already wealthy, allowing them to exploit the rest of us

No not at all - stating that social housing is subsided is not the same as saying it shouldn't exist. Clearly state schooling and health care is heavily subsidised. Again I don't think they should be abolished.

Also you are mixing up several things - pay at point of use doesn't mean not subsidised. Free at point of use doesn't mean non profit.

Private schools are subsidised through tax breaks. Much if the NHS is now privatised and profit making although it is free to patients and subsidised. NHS dentistry is pay per use while being privatised and subsidised.

Two thirds of that 65-70% are on passported benefits though ie above pension age or unable to work due to disability/long term serious illness. Better to move money from one public pot to another for this particular group than to fund via private sector - more predictable in terms of budgeting.

Well this is the crux of it and what people are actually thinking. Rather than tie themselves up in knots banging on about profit not being made or other shite.

What I find interesting is the words subsidised housing always, always crops up on a SH thread but nobody says it on private rent threads. Not ever. Housing benefit is a subsidy that applies to all forms of housing. I'm sure even those with mortgages when on their uppers can claim benefits for a short time to pay their Mortgage. Happy to be corrected on that.

Yet subsidised housing only comes up on SH threads. It's weird.

Long ago people liked to look down on SH. They still would like to look down on it. But fact is, it's probably the only secure housing in the country.

I didn’t quote any stats ?

Obviously a lot of people living in social housing will be in receipt of benefits, because it’s given to people with the greatest need I.e. people with ill health , disabilities and older people etc. but not all of them and anyone can apply for it, it’s not a pre requisite to be in receipt of benefits.

I found out the other day that my colleague who is on around 37k and is married to a man who earns 6 figures, lives in a HA property. They moved in when they quite desperately needed it and have a lifetime tenancy. They were offered the chance to buy I believe and declined. It means that they pay a low rent and have a lot of very nice holidays and brand new cars. I was pretty surprised. This is not something she tells people readily. I've known her for years and she's only just told me. I don't necessarily begrudge her this because it's the system as it exists and it's her home and of course she has every right to feel secure in it for as long as she chooses. It made me think though. Presumably, stories like hers make people question the system. They won't know the situation that led them to being tenants in the first place and see only her lifestyle. It's easier to look at that than to consider the much wider picture of the problems with the private rental sector and the management of the council sector historically.

Clearly both are subsidised. One through rent and the other through not having to pay normal market costs and tax. It would doubtless be much better for everyone to be living in house A as it would work out cheaper overall as well as being less demoralising for those needing to claim . House B needs maintenance too don't forget and the landlord is probably paying a mortgage that is barely covered by the rent . They aren't necessarily getting rich through renting out a house

They aren't necessarily getting rich through renting out a house

Lol I'll bet that was typed out with a totally straight face

does the house get put back into circulation for free when it's paid off like, probably having increased in value over the years? That would be interesting.

YANBU

They don't seem to realise, either, that when your eldest hits 18, they stop a proportion of the rent paid as the adult child is expected to help with rent.
I think that's fair enough to be honest though

Youngest not eldest

If Housing benefit covers all the rent then of course it’s a free house. The landlord may be getting the money but they’re the one providing a service!
Everyone wanted the landlords to stop getting tax relief on their mortgages and that is why you have inflated rent today. No one will continue to do something if they’re not making money. You reap what you sow.

I've often wondered this. I live in a council house with my husband and child. We aren't entitled to a penny of support because we both work full time.

I'm completely housebound due to disability, and have been deemed unfit to work by the DWP. However, if I don't work, we still don't get anything because my husband works.

It does make me feel envious when other (fit and healthy) people can just choose not to work and get their house for free, yet I'm disabled and have to work full time from my bed so that we can afford our rent and bills 😔

The OP is right that there is a lot of misunderstanding around social housing and housing benefit etc, but this thread and the OP show that too.

There is absolutely a subsidy provided by social housing.

A subsidy is a financial advantage provided that is not available to all and provides a benefit over market terms. That is the case with social housing. It is not available to everyone and is provided at below market rates. The advantage and difference that the tenant benefits from is a subsidy. You do not need money changing hands for it to be a subsidy, a financial advantage is a subsidy.

The rent is provided at below market rate and there is a lot of financial, policy and legal reasons behind the set ups which enable that below market rent to be offered to select people, when otherwise a profit would need to be generated by higher rent for other organisations operating in the open market to provide the same.

Housing associations also provide secure, well paid jobs for a lot of people. The one near me also reinvests profits into the community, providing activities and services for young people and other groups
Yes, they get to pick and choose. Very nice indeed. Landlords are not given a choice, like any other businesses how the taxes they pay are spent. Housing Associations make a lot of money. Yes, indeed, I'm not surprised they pay their employers well, they can afford to do so.

It has been proven that the average BTL landlord buying in 2024 won't break even and will actually lose money. All this talk of inflated rents and greedy landlords seems a bit ridiculous in this context. People forget that landlords are subject to market pressures in a way that housing associations simply aren't, so they have BTL mortgages to service at potentially high interest rates and they have to pay tax on the rent received in a way that HA's simply don't. They generally aren't raking it in so the fact that HA can afford to charge much lower rates shows they have indeed been subsidised.

They are often subsided at the point of building by the government so have far less debt to service. This is really critical and is particular crippling for private landlords at the moment! HAs also don't have to pay tax on their rents which means that the government loses out on a revenue stream there and can actually recuperate some money back from private landlords.

The real test is could you theoretically build an unlimited amount of social housing assuming you could get planning permission etc? If the housing wasn't subsidised then this should be possible as they could raise the money through ordinary means and just keep building, but the fact is the association's rely on limited public funding and concessions to keep rents low.

No one is forcing anyone to be a private landlord. There must be financial gain in it for them or it’s pointless

To many people I dare say ‘subsidised’ just means that you - in this case the tenant - are paying less than renters of equivalent private properties.

Paying less than someone else would normally be seen as having found a great deal

A subsidy is a financial advantage provided that is not available to all and provides a benefit over market terms. That is the case with social housing. It is not available to everyone and is provided at below market rates. The advantage and difference that the tenant benefits from is a subsidy. You do not need money changing hands for it to be a subsidy, a financial advantage is a subsidy

That's not what people mean though when they use it. We've come a long way since people thought it was free housing paid for by the taxpayer mostly, but that's the thought in people's heads. That it's somehow coming out of their pocket and ongoing.

Why say it at all? It's just housing.

Council houses were subsidised, The council did not pay market price for the land and houses were better designed larger rooms and sturdier built. My friend had a drying room in her block and a pram shed in the yard.
Even now by insisting on affordable housing land is cheaper per plot than on open market.