Lifetime Social Housing Tenancies

[RowsOfFlowers]

Am I wrong or being unreasonable to think that this new policy that Labour are bringing in is very unfair?

I come from a poor-ish background (as in no one in my wider family has any money). However, my mum and Dad did fairly okay and managed to move up the property ladder (through sheer hard work and sacrifice). My dad died a few years ago and so now it’s just my mom. We never received any benefits - and now my DH and I live in a house and pay a high interest rate (thanks Truss) and I don’t know if we will ever pay off our house (if I am to have children and go part time), so we will need to downsize. We don’t qualify for any benefits either but we are in the squashed middle, so we really feel it when anything rises in cost and don’t get any help.

I feel really cross that someone can benefit from social housing for a lifetime, no matter how much they go on to earn, and then if they pass away, they can pass it down as an asset.

I have a friend who’s parents came to this country, got given social housing, their children paid it off (40% discount) and now they all get to keep a £650k house in London. It doesn’t seem fair to me at all. I feel really disillusioned living in the UK.

The solution is to stop allowing things uk housing to be iver run by private landlords buying up multiple properties and renting out at extortionate prices.

Part ig the reason we have little to no sense of community ang more is bevause peopld are continuously being moved on.

Getting rid of lifetime tenancies only serves to continue the trend of moving peopld on.

Because you’re right - we don’t have infinite money - the vast majority of housing benefit is paid to private landlords buying up- subsidising their lifestyles and property portfolio and future financial security.

And the vast majority of benefits in general (if you remove pensions from the list) is paid to people who are in work.

Having lived it myself, I wouldn’t wish it on anyone - except perhaps to those bemoaning wgere yheir taxes are going.

It’s not subsidised.

@cloudyblueglass
I don't agree. We need a private rental market with private landlords. We don't have enough public capital available to build or buy enough housing for everyone that needs to rent. It just isn't a realistic proposition. The cost of capital, building materials, land and skilled labour has sky rocketed for the state as well as private developers.

The idea that landlords are sat there snapping up loads of property to make extortionate profits simply isn't true anymore. This article gives some interesting information about the cost of capital and owning a BTL and why this often will lead to many BTL landlords entering the market today making a loss:
https://theindependentlandlord.com/does-btl-make-money/
This will obviously be area dependent and there will still be some areas where a profit can be made, but in the context where investors/potential landlords can put their money in the bank for 5% no hassle return and an uncertain housing market then it's easy to see why many private landlords are disposing of property, not buying more.

We need good quality homes that people can rent. We need people with money prepared to invest in this as the state doesn't have the money or resources to do this alone. The enemy is not the private sector, they are a partner to the state. There needs to be rules and regulations to protect the tenant and the landlord but there is no reason why you should view the private landlords as an intrinsically bad thing. The rents they charge will be higher but this often reflects the non subsidised cost of buying property and owning capital. They have BTL mortgages with extortionate levels of interest or they have a lot of equity that they could pull out of the property and put into a bank account and earn a tonne of interest on. SH has the same capital cost/opportunity cost problem but this isn't passed onto the tenant but is a burden placed on the taxpayer. That's why it can't really be scaled in the way you seem to think it can be.

It absolutely is. Anyone suggesting otherwise isn't accounting for the cost of capital or opportunity cost associated with owning a high value asset with a very low return.

It absolutely isn’t. You quite clearly don’t understand what subsidy is. There are thousands of social housing properties that were built around 80 years ago that have been paid for two or three times over by the rents paid for them. Every council has to maintain a separate housing account which has to wash its face and is ringfenced from the general account. The entire ethos of social housing is not for profit, that isn’t subsidised, it’s supplying accommodation for what it actually costs.

Research from Shelter and the National Housing Federation, carried out by CEBR, shows that building 90,000 social rented homes [1] would add £51.2bn to the economy.

Most of this impact would happen quickly – £32.6bn would be generated within a year of building the homes, supporting almost 140,000 jobs. Within three years, the programme would break even, with the wider economic benefits surpassing the upfront cost of building, largely by boosting the construction industry.

The economic benefits continue over the longer term, through the management of more social homes, savings on housing benefit, and wider benefits including reduced homelessness, increased employment, and improved healthcare.

Within 11 years the initial government funding to build the homes would be fully paid back. Over a 30 year period, building 90,000 social homes results in a £12bn profit for the taxpayer.

National Housing Federation - The economic impact of building social housing

www.housing.org.uk/resources/the-economic-impact-of-building-social-housing/

No, you are being too simplistic and not accounting for the cost of capital and opportunity cost. I hate to bang on about these two things but these things are absolutely fundamental.

Subsidy can come in many forms. One of which is providing capital at a huge discount or for free. When you consider that many mortgages are running close to 5% then you understand how expensive capital actually is. Equity tied up in housing is still capital. Owning capital will always bring a return and over many years will always deliver a multiple of the original capital value.

Something being 'non for profit' will inherently require some subsidy from somewhere unless it is taking into account the cost of capital within the calculations (which councils don't). If the money can be better utilised elsewhere and bring about a better return then the housing is indeed being subsided to some extent.

It's like me buying a field for a donkey sanctuary. I withdraw £500k from my bank account currently paying 5% interest. The donkey sanctuary pays for the upkeep of the field etc and a menial rent of £5K a year to cover my costs. I have obviously lost £25k in potential interest payments even though I haven't taken out a mortgage to fund buying the field.

I think it’s you who’s being simplistic. Try reading the post above yours.

No, the housing would still be subsidised. Cost of capital again is completely ignored and the benefits are hugely questionable.

Building any housing or any CAPEX schemes brings about new jobs etc. You would achieve a similar impact by investing on the beloved HS2 or any other major construction project.

The other figures are ridiculous. The assumption that crime is related to housing type as opposed to the people that happen to live in the housing is laughable. Moving a drug dealer out to a nice estate won't impact crime figures. The other figures are equally bizarre.

Social housing isn’t subsidised regardless of whatever free market mental gymnastics you might undertake in an attempt to prove it is. There’s not much point in continuing this, is there? Your definition of a subsidy is not mine.

It's not free market gymnastics. Tell every homeowner paying interest on their mortgage or every saver receiving interest on their savings that they are only receiving this because of 'free market gymnastics'. Honestly, they really need to teach this stuff in schools because it is fundamental to how the economy works and why the government can't just knock up a load of Social Housing that will apparently turn a profit in just a few short years.

I'm happy to leave it there.

Yep same here. First night we moved in bed bugs, we had rats, mice, the condition in general was awful. Some people have to share bathroom/kitchen with several other families. Some have a family of 5 in one room. Also on the day you need emergency accommodation you don't even no where your sleeping that night.

as @Bumpitybumper has pointed out.

YESSS! Excellent post! ^

Thanks for pointing that out @Bumpitybumper about the subsidisation factor. It’s obviously a complex issue and part of the issue OP originally raised.

It's incorrect. Why are you thanking that poster.

I'm being thanked because I am indeed correct.

Thats not subsidising, though.

but on yhd subject of subsidising - I suggest you look up the uk farming industry and see how much your milk and other groceries are subsidised by.

You’re absolutely not correct. And nobody should be thanking you for misleading them.

If you’re looking for a subsidy check out the interest rates that have been kept artificially low for years to ensure home buyers who have overstretched themselves aren’t evicted by their lenders en masse. I could moan “but what about my savings?”

Please don’t tell me who I should or should not be thanking. @Bumpitybumper made their (correct) point very eloquently. You are dragging down the thread, it’s just not necessary.

I’m not dragging down the thread at all. I’m correcting the erroneous myth that social housing is subsidised. And I shall continue to do so because it is necessary. This isn’t an echo chamber in which people get away with posting untruths.

It absolutely is subsidised. Present your argument for it not being so….?

https://www.gbnews.com/news/social-housing-enormous-cost-tax-latest

GB fucking news 🤣🤣🤣

Be off with you