Council houses owning brand new cars?

[TheCluelessMum]

I’m writing this post with the hopes of being educated, not slandered

however I completely appreciate I may be just completely shot down for asking this.

i live on a new build estate, 12 houses at the start of the estate are council houses. I don’t know this because I’m a snob, I know this because it’s clearly marked on plans when you buy those houses.

i see so much stuff online about how the UK benefits system is failing people, the higher rise of food banks. It’s absolutely abhorrent people are in this situation.

however, when entering my estate today I noticed that each and every single council house had a car newer that a 20 plate. Mercedes, Audi’s, BMW’s even range rovers.. there was not a single house out of the 12 which had an older than 20 plate car.

I am now confused as to why this is the case? Everyone I know (including those receiving benefits) continually speaks about how hard the cost of living is.

so could someone please answer how/why those in what we would presume lower income families, are able to afford such lavish cars.

I should also say that there are so many reasons that a household may be in social housing and have a car. For example, an applicant may have mobility needs then their children may grow up and get a decent job while still living with them. They may have been living in multi generational household in social housing, and the adult children may have been given a place of their own to live to facilitate the tenant downsizing, or simply to relieve overcrowding. They may have a child that has severe respiratory issues and the accomodation they were living in in the PRS was making them very ill so the council rehoused them. A pregnant woman may have become homeless, secured social housing then met a new partner who works. Similarly, a woman may have escaped domestic abuse and then rebuilt her life rather than being on the streets with no opportunity to do so. A severely disabled person may be on high levels of benefits but unable to find a home in the private sector that meets their needs and have a motability car. They may be a care leaver and the council is providing a home in recognition of their vulnerability as a result of likely adverse childhood experiences and realising that as a responsible corporate parent you don't just dump care leavers in the street at 18. Some allocation schemes also prioritise people who are making a community contribution on top of their housing needs. Christ there are so many reasons. Also in some areas the rent prices are simply so high that average income families cannot afford to find another home at the end of a tenancy, and became homeless. There are thousands in TA right now who work but can't access the private rented sector because it is simply very expensive and so far above private rent. For example in some inner London areas a 3 bed flat costs say 800pcm in social rent. You might be able to afford that and a car, but that doesn't mean you could afford the 3500pcm in private rent!

I agree with this- “People who want to buy property tend to make that their aim and will work upwards to be able to do so” I don’t find it inconsistent with my view on this topic, if they want high income, home ownership BOOM, what’s not to like?

All valid reasons. But to those who say council rent isn’t subsidised - it clearly is significantly cheaper!

That just means market rents are vastly inflated. Cheaper doesn’t mean subsidised.

When I moved from private rental to council, I paid £50 less. It's now gone up by £50 so I'm actually paying the exact same amount I paid when I rented privately.

Lots of posters claim this but actually when I was renting out property, the rent only just covered the monthly mortgage payments, insurance and letting agent fees. Let alone repairs and upkeep. If I’d charged any less I’d have been running it at a loss. As it was, it barely broke even. No real profit. So the rent wasn’t inflated. It was covering outgoings.
I shall sit back now and await the onslaught of ‘landlords are evil’ and all out for profit/greedy bastards etc.

Many landlords rent out unmortgaged properties that they manage themselves. The entire rent is profit yet they still charge “market rent”.

The profit is a fully paid for house that you didn't really pay for at the end. Landlords seem to think they're badly done to if they don't make profit on the way.

So eventually you own a house that someone else paid the mortgage on.
Pretty huge profit to be had at that point, don't you think?

No, it's not the case that the entire rent is profit. There is insurance, repairs, gas and electric inspections, tax.....

There’s buildings insurance and an annual gas check, those make a very small dent in the profit. Of course there’s tax, why on earth wouldn’t there be?

Benefits the state obviously. If the state is currently paying the private rental of a family because no social housing is available, the state would financially gain if social housing is made available (via building or if a family that can afford to move on does so) for that family to move into.

Council tenants in work pay rent. People on benefits don't. And council estates would become really problematic if everyone who lived there was on benefits. This is a huge issue for councils - it becomes a vicious cycle as the only people who will move in have no option and the deprivation keeps people stuck. This was a huge problem in Glasgow in the 80s. There was a big tower block called the Red Road Flats. I was a student in Glasgow then and the council offered flats there to students as they couldn't get people to move in. My boyfriend took one - it didnt last because of the antisocial behaviour all around. No local authority wants an area to become like this. It has to be mixed to work.

You’re wasting your time @Pickledpoppetpickle
MN hates landlords. An acquaintance of mine ended up working two jobs trying to pay the mortgage on both her own home and the rental property. Couldn’t sell the rental as the tenant was classed as vulnerable and had trashed the place. Took months to rehome him. Whole place needed gutting costing her thousands plus the interest on the missed mortgage payments.

That’s what happens when you’re greedy and treat housing as a get rich quick scheme. Hopefully she’s learned her lesson.

Oh please do stop with the ill informed, inverse snobbery. Have you ever actually been a private landlord? Of course you haven't.

We have and we were damned good ones. We had good relationships with our tenants, kept the houses in excellent repair and freshly decorated for each new one. We charged a very reasonable rent and were flexible with our tenants.

When we decided to sell (it was no longer viable to be a landlord) we offered the house at slightly below market value to the tenant in appreciation for what an excellent tenant he had been. Sadly he couldn't get a mortgage though.

Yes, there are bad landlords but equally there are very good ones too. We rented privately for 11 years between leaving university and buying our first home and all our landlords were really good.

And contents insurance. I never suggested profit shouldn’t be taxable.

No, it really isn’t a get rich scheme. I inherited my buy to let. I hold on to it because it’s a bungalow and smaller than the family home. I will logically retire to it in a few years. It makes sense to rent it out until the day comes I need it. I rent to a young woman I know at a very reasonable rent. She’s a fab tenant. It works well for us both. After expenses, I make around £100 a month.

Surely the tenant insures the contents.

Not if you rent it out furnished/part furnished. Obviously you're going to insure furniture and fittings that you own as the landlord.

Surely the landlord takes responsibility and insures anything hat belongs to them?

Or does that not fit with your nasty evil landlord rhetoric?

Quite. Clearly we're all just venal, money obsessed, bastards who are sniggering all the way to the bank [rolls eyes]

Well, you must be letting it out for peanuts.

Without a Mortgage, yes it can be very profitable, even charging below market rent - plus you have, over time, an appreciating asset.

Average rents outside of London are £1350 pm.

My home town in the SW, avg is £1240, no one can tell me that its not profitable, thats £14900 per year.

Tax @20% minus expenses, such as insurances and a yearly gas cert, account for at most 30%. EICR is every 5 years.

Yes i know you can be unlucky and get a shitty tenant but thats not usual.