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.

rent payments aren’t necessarily forever.

They are. What might vary is where the payment comes from.

You knew what I meant. Fact is, is that a lot of pensioners do have all or some of their social housing rent paid for them by the taxpayer. This will continue.

This is an exceptional scenario if you have genuinely experienced a 400% increase in house value since 1999 without doing substantial work (which is what you're suggesting!). This would double the growth of even the best performing region of the UK and unrepresentative of the average scenario for house owners who have experienced 200% growth over this time. Inflation has risen by 87%. This isn't contortion, it's economic fact. You would also pay around £50K in interest over the term of the mortgage assuming an average rate of interest of 3%.

So it's clear to see that the average home owner wouldn't be making such a huge 'profit' and this is including years of relatively high house price growth and low interest rates. Looking ahead inflation looks to be stubbornly high as do interest rates and house price growth is depressed. The so called profit will be even less for current buyers. They will also need to invest a lot more money into their house compared to SH tenants who can instead happily lock away any savings they make on monthly rent payments and earn 5% interest on this money.

Just to add SH tenants on average spend £828 a month less on rent than private tenants according to Shelter. If someone is given a lifetime tenancy then their rent will stay the same irrespective of their earnings. So say for arguments sake someone was living in SH for 25 years and was able to pocket the difference in rent (totally possible if they earned as much as the private renter) then this would equate to £248,000. If they put the £828 in a savings account paying 3% interest on average over the 25 year period they would earn an additional £115k in interest.

This massively outstrips the gains that an average house owner will make in 25 years and isn't far off your so called 'profit'. The SH renter would have had all the maintenance on their house paid for and wouldn't have to worry about increasing interest rates etc.

Social rents are not fixed; they rise when the costs of managing and maintaining the housing stock rise.

My rent has increased by £100 a month since I moved in 5 years ago. Also, again, London does not equal the entire UK. You could rent a mansion in some areas of the North for £828 a month. Very few people will be saving that much in rent outside of the London bubble.

The study included all areas of the UK and averaged the difference. London had an much bigger saving than £828 for SH tenants. I think your idea that you can rent a mansion in the north for £800 is outdated.

https://england.shelter.org.uk/media/press_release/living_in_a_social_home_is_over_60_more_affordable_than_private_renting_

Social Housing rents don't rise in line with normal economic and market factors that would ordinarily cause them to rise. This is why they are subsidised and a scarce resource that can't be scaled easily. This is also why giving lifetime tenancies to some whilst barring others from accessing SH at all despite being on a lower income is intrinsically unfair.

The same applies to private rentals, the difference is the cost to the taxpayer is significantly higher.

You would also pay around £50K in interest over the term of the mortgage assuming an average rate of interest of 3%.

You’d pay a lot more than £50k in rent over a 25 year period.

I have no idea whether it’s an exceptional scenario or not. What I do know is that we paid £159k for it in 1999 and the most conservative Zoopla estimate of its value is currently £695k. Obviously you will now find some way of arguing with me again. As far as we’re concerned it’s profit.

It is statistically exceptional. I'm not suggesting you're lying but just that there will be big losers around the average as there will be big winners (like you). It is best to look at averages to even this out a bit as focussing on exceptions skews the picture.

Yes, you would pay more than £50K in rent, but interest is just part of the picture.

Yes, you would pay more than £50K in rent, but interest is just part of the picture.

Then why bring it up?

How's it a choice? You can't just choose to have a council home the waiting list is five plus years even for someone in the highest priority band Ie a bed and breakfast with their kids. And mortgages can be cheaper than private rent.

I was about to get evicted when the landlord wanted to sell and getting a mortgage was the ONLY option (I have kids they cannot live in a tent).

Stop trying to act like you've got it harder and the op has it easy just because she has a mortgage, I think someone already pointed out if you lose your job and have to claim welfare you only get help with rent if you have a mortgage you are pretty much fucked.

You can claim help with a mortgage. The details are here.

https://www.gov.uk/support-for-mortgage-interest/what-youll-get

I'll read this fully later. My mother in law had a mortgage and lost her home when her husband left and she couldn't pay it. While my mother had been happily plodding along in her council home her whole life even in periods of unemployment she was fine because welfare helps with rent.

There's just no denying having a social rental is way better and more secure than a mortgage with a private rental being even worse. Honestly the "asset" arguement only works if you're comparing a mortgage to a private rental which you could get evicted from any time.

Oh my god, someone has already pointed this out a number of times. It is a loan that you have to pay back plus interest. That is not a benefit. It is a loan.

Honestly the "asset" arguement only works if you're comparing a mortgage to a private rental which you could get evicted from any time.

100% this.

Exactly - OP and her husband aren’t going to sell up and private rent leaving themselves at the mercy of a landlord, are they? That would be crazy in this day and age when the prices in the private sector are crazy high. And it’s not like they ever have a realistic chance of getting a council property. The RRB will help private renters, but landlords can still evict you for many reasons, one of them the reason why you were evicted.

You can get help with your mortgage, but as explained many times, the SML is much less than ideal and not comparable to housing benefit renters can get. You’re still fucked with the SML, just in a different way and perhaps not as painfully.

Sorry to hear about your MIL.

I didn’t say it was a benefit. I quite specifically said help. Nonetheless, mortgage holders who hit hard times have state support available to them.

Cant help hoping someone builds a new HA estate right next to where Noah Eastwood lives Lets see how long his "altruism" that social housing should only be for the most desperate, lasts then!!!!!!!!!!!!!!!!!

Hope the low income essential workers remember this if there is ever another lockdown. Back in April 2020 i predicted that it would be back to the default setting of treating them like shit soon enough. Next time i hope they lock down too.

Sorry - where exactly in my post have I treated low income workers like “shit” @JenniferBooth ? You just want to pick a fight. Absolutely no understanding whatsoever.

It’s still not a level playing field in my opinion. The middle classes are screwed in this country. We face so much stress for little reward.

Try the stress of living on benefits or minimum wage on for size. It shouldn’t be a level playing field, I paid my own mortgage during hard times and I really can’t see why taxpayers should pay other people’s mortgages for them.

It shouldn’t be a level playing field? 🤔

No, I’m not suggesting tax payers pay for people’s mortgages, but I would expect there to be benefits seen by tax payers, especially in the middle classes. We aren’t high earners but are extremely squeezed. I feel as though I pay into a system that doesn’t benefit me whatsoever, I suspect private renters feel the same, if not worse.

I don't think you can really believe you pay into a system that doesn't benefit you at all - if you really believed that you'd stop working, stop paying your mortgage and live the fictional life of Riley on benefits.