Council Housing?

[observer]

Not Dickensian at all, it's the nature of the beast; renting out properties on a single room basis to students and/or Polish immigrants, in some cases several per room - cheaper for the tenants but a hell of a lot more lucrative for the landlord. I'm not suggesting that all private landlords are exploitative, although the reality has to be, that the tenant will be paying off their mortgage for them; but Councils and R.S.Landlords are a safer bet for a tenant. And if the tenants are responsible, look after the property and pay their rent on time, surely that gives less reason to kick them out cos they've made the mistake of getting a job and improving their income?!

[Peter T]

The whole system is crazy and needs overhauling.

You can rent through private landlords and get the council to pay the rent which is normally a lot higher than council property.

[Sue Durnim]

Here?s an idea?

 

Why don?t all the banks/building society?s scrap the deposits for mortgages and then divide the cost of a property by 300 months on a fixed repayment* (like they do when you buy a car) and then that is the repayment and people can budget in advance instead of being taken advantage of by fluctuating interest rates and then if you default on your mortgage the house reverts to the bank as it does now, banks/building society's can't lose?

 

*?150,000 + 12% over 25 years = ?168,000

 

Someone should give first time buyers a fighting chance to get on the housing ladder and would probably kick start the housing market and the economy.

 

I would then expect the people who are then forced into renting because they can not afford the deposit, can then move out and buy and at the same time make more rental properties available?

[inky pete]

Not Dickensian at all, it's the nature of the beast; renting out properties on a single room basis to students and/or Polish immigrants, in some cases several per room - cheaper for the tenants but a hell of a lot more lucrative for the landlord.

 

That might have been true in the past, but since the 2004 Housing Act any rental property occupied by more than 3 unrelated tenants is an HMO (House in Multiple Occupation) and the landlord must provide multiple kitchen and bathroom facilities, plus things like fire doors and a proper mains powered smoke alarm system. HMOs must be registered with local councils, could be subject to planning restrictions, and must comply with the local councils requirements. Insurances for HMOs are far more expensive than for other rental properties. Agents fees are generally higher, reflecting the need to perform more inventory checks as tenants move in and out.

 

Yes Obs, there probably are still some slum landlords out there who don't play by the rules, but it's far from "the nature of the beast" and to characterise the whole industry in that way is just pandering to your own prejudices.

[inky pete]

Here?s an idea?

 

Why don?t all the banks/building society?s scrap the deposits for mortgages and then divide the cost of a property by 300 months on a fixed repayment* (like they do when you buy a car) and then that is the repayment and people can budget in advance instead of being taken advantage of by fluctuating interest rates and then if you default on your mortgage the house reverts to the bank as it does now, banks/building society's can't lose?

 

*?150,000 + 12% over 25 years = ?168,000

 

 

No-one in their right mind is going to lend out ?150,000 at a fixed APR of 0.9%.

 

Inflation would completely wipe out any profit - and that's without taking out any of the lenders upfront costs, and without making any provision for bad debt.

 

There's no reason, though, why the bailed out banks couldn't turn their hands to becoming private landlords and rent out the properties they repossess - ideally to those who are facing the repossession in the first place. They then wouldn't make such large losses from underselling repossessed properties at knock down auctions, they'd be increasing the supply of rented properties available - which would bring down average rents - it would avoid a glut of cheap, repo properties hitting the market everytime times get tough (which depresses house prices and forces even more people into negative equity) and the taxpayer would start to see a return on their bail-out investment.

[observer]

Not predujice - experience; and yes, there is legislation covering HMOs, just like many other things - and Councils that can't afford the required level of enforcement. Meanwhile, R.S. landlords are a known responsible sector - so why kick out responsible tenants, just cos they are working and earning - which was the origin of the topic.

[inky pete]

Because they are now significantly less in need of publicly subsidised housing than they were when they were assessed and qualified for it!

 

You might as well ask "why stop someones unemployment benefit just because they've landed a ?50K a year job"!

[observer]

Where do you get the "publicly subsidised" from? Those on benefit are helped via HB; Council Tenents actually pay an over the odds portion (?11pw last I heard) to central Government; and as most "Council" stock has now been passed to RS landlords, the Council are sadly not involved.

[wolfie]

Council house rents are not subsidised. The first tenants to lose their susidies were council tenants back in the '80s when the Tories introduced the concept of the 'market rent'.

[Sue Durnim]

No-one in their right mind is going to lend out ?150,000 at a fixed APR of 0.9%.

 

Inflation would completely wipe out any profit - and that's without taking out any of the lenders upfront costs, and without making any provision for bad debt.

 

There's no reason, though, why the bailed out banks couldn't turn their hands to becoming private landlords and rent out the properties they repossess - ideally to those who are facing the repossession in the first place. They then wouldn't make such large losses from underselling repossessed properties at knock down auctions, they'd be increasing the supply of rented properties available - which would bring down average rents - it would avoid a glut of cheap, repo properties hitting the market everytime times get tough (which depresses house prices and forces even more people into negative equity) and the taxpayer would start to see a return on their bail-out investment.

 

Although I do agree with alot with what you have written, my figures/percentage was only an example, I am probably getting confused with a an ?ideal world?, where providing a valuable service to help solve a need, would out weigh the banks extortionate profits, most of which seems go on massive bonuses.

 

Don?t get me wrong, I am not against profits or rewards, however, common sense must prevail to bring some sort of perspective, especially in the current economic climate.

[observer]

We know from the banking crisis, that the private sector is about profit - it's the nature of the beast.

[Sue Durnim]

We know from the banking crisis, that the private sector is about profit - it's the nature of the beast.

 

Observer.

 

I am beginning to think that I am a communist at heart.

 

1. A theoretical economic system characterized by the collective ownership of property and by the organization of labor for the common advantage of all members.

 

2. Communism

a. A system of government in which the state plans and controls the economy and a single, often authoritarian party holds power, claiming to make progress toward a higher social order in which all goods are equally shared by the people.

[inky pete]

Council house rents ARE subsidised - always have been and always will be. The council housing stock was built with public money and no attempt has ever been made to set rents at a level which would enable the repayment of that capital investment from the rental income.

 

If public money is used to buy an asset for a company and that money is not paid back, or even if the public money IS paid back - but at preferencial credit terms, then that is a subsidy.

 

Now that we have publicly funded housing stock being transferred (given, effectively gratis) to other social housing providers in return for them keeping the rents low, we do indeed have a direct government subsidy of the rents paid.

 

Sue, out of interest it IS currently possible to get a mortgage which is completely fixed for it's whole 25 years, several of the mutual building societies do them. They're not popular with buyers because they always seem to be at rates slightly higher than the prevailing ones (the lenders do have a duty to their savers to hedge against possible future rate rises) and it's not easy to get out of them to take advantage of a lower rate elsewhere.

[wolfie]

Rents are subsidised only if the family's income is too low to pay the normal rent and if you believe that rents are subsidised then surely the answer should be to increase the rent to the 'market value' not to kick them out of the house.

[inky pete]

No, I'm saying that since we have a stock of publicly funded housing then it should go to those who actually need it most, for the period for which their need persists.

 

Otherwise we end up paying large amounts of Housing Benefit to those with such needs for them to go and pay rent to a private landlord (who will have to be setting his rents at a level which will pay him back his capital investment), while at the same time we have people with some quite high household incomes, or who no longer have the same housing needs as they used to, benefitting from the lower rents and the other advantages available within the publicly funded stock (it's irrelevent whether that be council housing, or ex-council housing which has been gifted to another, non-commercial provider).

[Eagle]

Here?s an idea?

 

*?150,000 + 12% over 25 years = ?168,000

 

 

I have had a word with my bank manager, put me down for a dozen and a dozen for him.

[observer]

Errm, so Inky; you don't want HB going to pay inflated rents in the private sector BUT are prepared to kick ordinary working folk out of their Council House to pay the very inflated rents in the private sector that you are complaining about! Thus an admission of the nature of the private sector and probably the motive behind this Gov move. I too don't agree with high HB and would rather they built MORE "SOCIAL" Housing; which the so-called "socialist" Labour Gov singly failed to do, and which this Tory Gov with a so-called liberal conscience has no intention of doing. btw. dumping all the so-called benefit scroungers in the same place will guarantee sink estates, or is that part of the grand plan?!

[inky pete]

Moving people who no longer have a financial need for council housing out of them, and moving Housing Benefit claimants in would mean that there would be a greater proportion of people in the private rental sector paying their rent out of their own money.

 

This would generate a downward pressure on rents - or at the very least prevent significant increases.

 

I've never said that rents in the private sector are over inflated, just that they are lower in the subsidised sector. I've also said that the way HB is currently set up actually produces a steady, year on year upward pressure on them.

 

Decrease the proportion of HB tenants in the private market and do the other things being proposed - peg HB to the 30th instead of the 50th percentile and cap it to prevent excessive claims in particular Local Authority areas - and people who are paying their own rent will no longer be priced out of the market by people who aren't.

[wolfie]

So we move a family out of their council home because they are earning a few bob. 3 months later and the bloke loses his job because of Tory spending cuts, and claims housing benefit and then we move him and his family back in to the home they were kicked out of.

 

The politics of madness.

As Obs said

dumping all the so-called benefit scroungers in the same place will guarantee sink estates,

[observer]

And by what economic miracle, will forcing descent working folk out of Council accomodation force down private sector rents? These folk will be homeless, what do they do, pitch a tent until the private sector rents reduce? That's the whole point: folk HAVE to have somewhere to live, for some strange reason in the UK, we're obsessed with private ownership (unlike our EU cousins), but the fact is, that the vast majority of folk CAN'T AFFORD TO BUY: therefore supply needs to meet demand by building more Social Housing for rent, which aside from giving everyone a roof over their head, will suppress price inflation generally in the housing market.

[Peter T]

I thought that the latest idea was to force council rents up to nearer private prices?

[observer]

They have, some time ago, by reducing funding support for RSLs.

[inky pete]

And by what economic miracle, will forcing descent working folk out of Council accomodation force down private sector rents?

 

Because there would no longer be such a large supply of HB tenants looking for private rental properties with a virtually unlimited budget of someone elses money!

 

We could, and probably should, be building more council houses. But who's going to pay for them? That nice Mr Taxpayer again, I suppose. And if the rents are going to be comparable with current council house rents, then there's no chance of Mr Taxpayer ever seeing his capital investment back.

[wolfie]

All very well but The Government expects that by 2012 all similar properties in the same local area will have similar rent levels, even if the properties are owned by different landlords. The process is known as rent convergence and includes council houses.

[observer]

But Ink, what do the evicted Council tenents do, whilst waiting for the private sector rents to come down? And let's not forget, the landlords probably bought their properties in an inflated market and thus need to charge inflated rents to cover their costs - catch 22. Just build more social housing - and since when didn't "the tax-payer" pay? We're paying to subsidise the "private" railways, bailing out the banks etc etc.