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?

It would serve many right if they all pulled their houses from the market at once.

It would be very foolish. Market forces would mean prices would plummet.

Subsidies aren’t subjective. They’re an objectively ascertainable fact. We live in a capitalist, market economy. Social housing is subsidised because it’s lower than market rate. That’s all there is to it - “feelings” are completely irrelevant. You’re living in a communist fantasy if you think social housing rates are where rents should truly be. That’s not the country you live in. If you want that, found a political party that will win enough votes to make that happen. And good luck.

I also think housing/shelter is a basic human right. We are not a civil society if so many people with so much (going by GDP) do not meet the basic human needs of all.

I would dearly wish for all who wish to be housed, to be housed in adequate, sanitary and safe homes. Period.

It’s also a fact that there isn’t enough subsidised housing to go around. Demand has increased greatly, supply has fallen dramatically. We need a combination of:

• higher taxation on those who, utterly immorally, hoard the most for themselves in order to build or buy more social housing (councils buying back BTL properties, construction where there’s no supply, higher taxes on second and third homes, tiered SDLT
• a radically altered housing policy to ensure that those who need it have access to subsidised housing that exists, and those who don’t, don’t have such access
• housing subsidies should be based on ability to pay. If a family starts unable to pay 90% of market rates, it pays 10%. As income rises, that percentage rises too. It’s unacceptable for the taxpayer to continue to subsidise to 90% if there’s more money coming into the family pot at time goes on

You've missed the point by the lack of understanding of what social housing is these days. And that's what my point was and you have illustrated nicely.

There's no profit in it that's all.

There’s nothing untoward about this. The pension fund is just acting as a lender to the council. I don’t see the problem.

I was having this discussion with DH today. We live in a HA house. It's adapted for our disabled children. When we got married we brought a flat, then later when we started a family a 2 bed house.
However, we needed to be closer to family because of my children's disabilities and my mum needing more support with my dad. Problem was where my family live is very expensive, so we sold and went into rented. As the youngest got older her disability got worse and she needed a wheelchair. Her team wrote to the council and were allowed to "bid" which is how we ended up here.
We both work, in good jobs but no why could we afford the house we have now. We pay full rent and are very grateful to be able to live in a house suitable for our children. But we couldn't afford a private rent on a house like this.

No problem, I'm happy to explain.

If the social housing was just 'housing' then the stock of 'housing' would be greater, thereby increasing supply and lowering the prices. So we're considering both that and the mobility of the housing market itself.

Bear in mind that not all houses are equal. Some are bigger, smaller, located in various places which make them desirable or not to each buyer. There is also the factor of changing availability based on circumstances i.e. young couple buys small starter house/flat; has children; buys bigger house; children leave and couple gets old; buys a bungalow. I'm saying 'buy' but it works the same for renting as generally bigger costs more than smaller.

For instance, if you're a single person paying £400 HA for a 3-bed in a £1000 neighborhood then why would you ever leave that? You wouldn't; and I think someone a few pages ago made a similar point.
This lowers the number of available 3-beds for the private renters (or buyers) who need the space, making their prices higher and/or making them choose a different (and potentially less suitable) area - I'm talking schools, nurseries etc. which single people don't use.

Does that help?

From the tap, run by the over priced water companies.

I've already answered this

It is subsidised. I’m finding the comments that people are ‘jealous’ of people in social housing quite hilarious. Why does it exist - wasn’t it created to ensure people who have fallen on hard times aren’t homeless? Why would anyone want to stay in it long term? It should be for vulnerable people only.

No. It was created to provide people with long term homes. The massive social, housing programme post war was to get people out of slums and provide decent living conditions for families - “homes fit for heroes”. It did that for 40 years until Thatcher used it to bribe working people to vote Tory. We need another building programme like the one we had 80 years ago. And, no, it’s not subsidised. It washes its face, many long term tenants have paid the equivalent of the worth of their home and more besides.

It was never created for people who had fallen on hard times. It was created to give families decent homes after the slum clearances Perhaps do a bit of googling before you spout bollocks on the internet.

Opportunity cost. A council house rents for less than it would on the open market. The difference between the two costs could be argued as subsidy.

And absolutely, market rents are too high. In the sense that huge numbers of ordinary people can't afford them. But ultimately the market sets the price because there is more demand than supply. And that is because we have not as a country built enough homes for years.

So now we have a situation where there are two few homes and people can't afford the live well. And a few people who got in at the right time do have good housing for a cheap price. It's not a fair situation. I don't blame the people who are in council housing though.

It is subsided (both through grants to build/renovate and through tax- a housing association won't be paying the same types of taxes as a private landlord on their income). The need for subsidies is probably a significant limiting factor in being able to have enough social housing to meet demand.

It is an important social resource; and it's important that there is public subsidies to build and maintain

It's also a scarce resource. There are people living in private rented accommodation who would have better more affordable housing if they could access social housing

This scarcity factor probably adds to the tension points around social housing in that people may feel frustrated that they cannot live in a more affordable option.

Because anyone lucky enough to find SH is just that lucky, so others might feel its unfair.

I also think there's further jealousy because you may have a right to buy and can get discounts on the value.

SH is not subsidised.

I feel embarrassed for you.

Sorry just took a quick glance.

There seems to be some misunderstanding about the meaning of subsidy here. The difference in rent between social housing and privately owned rentals isn’t a subsidy. Nor is the difference in taxation between the provider (a company) and a landlord (an individual). The grants are to help provide more housing, they don’t subsidise tenants’ rent which has paid for older stock that remains in public hands over and over again, those grants also total considerably less than the proceeds of right to buy.

Wait until she finds out I was privately educated! 🫢😂😂😂

I do think it would be an interesting one at the moment when councils are struggling financially if it was changed that councils could charge market rate and keep the additional funds. It would probably be very popular, especially as there would still be a benefit to have social housing of secure tenancy.

My parents had a council flat when they first got married in the 70s, but when they relocated for work went into private, back then the rents were about the same.

Just one problem with that which is that those councils which still own social housing legally have to ring fence the housing account and keep it completely separate from its general fund. Neither is legally permitted to subsidise the other. Obviously it’s a moot point in many cases because social housing has been sold off to other providers.

My friend is in social housing, a small 2 bedroom house with lounge and small kitchen (with a small table) which costs her £100 more a month than my large 3 bedroom mortgage cost (bought before prices went mad)
I agree with a pp I think people confuse social housing and housing benefit.

No wonder this country is in the mess it is with people like you spouting bile like that

Market rent is just the prices that people end up paying for rent.
Subsidies inflate the market rent, for sure. Removing them would somewhat deflate rental prices. But obviously that wouldn’t help with affordability for the people who were formerly being subsidised

This ^^^

The so called opportunity cost being considered a subsidy in housing is like your local lowlife not mugging you when they commonly mug others, and telling you they are therefore subsidizing your income.

The problem with this thread is that people are coming at it from completely different perspectives, you won't reach the same conclusion if you answer from a philosophical/political/moral perspective as if you answer from an economic/accounting perspective.

From an economic perspective the difference between market rate and the rent people in HA properties pay is the subsidy, that's just fact.

From a moral/philosophical perspective you could easily argue against that. What is a true market rate, what is a basic human right, how do we even define a subsidy.

But I don't think anyone on this thread is saying that the "subsidy" shouldn't exist, it quite obviously should and I'm sure we all want to see everyone adequately housed.