is social housing subsidised?

ILW

Wee_Willy_Harris wrote: »

Well it did in mine.

Well I suppose if you re write all the rules of accountancy, profit and loss etc, to suit your argument, you will never be wrong.

Wee_Willy_Harris

ILW wrote: »

Well I suppose if you re write all the rules of accountancy, profit and loss etc, to suit your argument, you will never be wrong.

Well, it's easy enough to factor in the overheads mentioned to a cost price.

ILW

Wee_Willy_Harris wrote: »

Well, it's easy enough to factor in the overheads mentioned to a cost price.

True, but when you said the builder sells the property to the HA at cost price, did you mean cost price or cost price plus the builders overheads?

Wee_Willy_Harris

ILW wrote: »

True, but when you said the builder sells the property to the HA at cost price, did you mean cost price or cost price plus the builders overheads?

For the sake of simplicity, I meant he got exactly what it cost him all in.

PasturesNew

There was a bloke on Homes Under the Hammer. Lived in a big farm and wanted to convert his outbuildings into posh new housing. In order to get PP he had to either hand over one as social housing, or ..... come up with a council house. So he went off to the auction and bought one. He said he was then handed a huuuuuuuge specification of exactly how the house had to be done up, the standard, everything. So he spent a fortune doing it up to a good spec. I'll see if I have the figures on this PC in a minute, but in order to get his PP in his own 'garden', to convert 5-6 outbuildings into posh houses, he spent well over £100k.

Edit: now I have the facts... so compiling another post.

PasturesNew

Property: 2-bed semi on the outskirts of Harrogate
Auction Guide: £115k
Corner plot, built in 1979.
Auction date: 25 July 2005

It was a "superwarm house" - which were built without central heating as they believed the houses would keep warm by themselves. It was all original fittings, including shagpile carpet on the back of the cistern and a brown bathroom suite.

Address: 23 Bryony Road, Harrogate.
Land Registry link (having problems with houseprices.co.uk tonight):
http://www.houseprices.co.uk/e.php?q=23+bryony+road+harrogate&n=100

He bought it for £125k
He had to sell it to the Housing Association for £56k
He had to do: new kitchen, new bathroom, insulation work, tidy up the garden, redecorate.
He spent £11k

So total spend £136k, sold it for £56k, it cost him £80k out of his pocket/budget.

neverdespairgirl

Wee_Willy_Harris wrote: »

That argument is very dependant on the negotiations undertaken between the parties involved. If the developer spends £60,000 on a unit build and negotiates a price of £60,000, then there is no real loss and no subsidy, simply a loss in overall profitability.

Of course, S106 represents a small number in terms of the units it produces for social housing.

If they build 16 units that have a market price of £250k, and have to sell half to the council / HA @ £125k, how is that not a subsidy, for goodness' sake?

Wee_Willy_Harris

PasturesNew wrote: »

Property: 2-bed semi on the outskirts of Harrogate
Auction Guide: £115k
Corner plot, built in 1979.
Auction date: 25 July 2005

It was a "superwarm house" - which were built without central heating as they believed the houses would keep warm by themselves. It was all original fittings, including shagpile carpet on the back of the cistern and a brown bathroom suite.

Address: 23 Bryony Road, Harrogate.
Land Registry link (having problems with houseprices.co.uk tonight):
http://www.houseprices.co.uk/e.php?q=23+bryony+road+harrogate&n=100

He bought it for £125k
He had to sell it to the Housing Association for £56k
He had to do: new kitchen, new bathroom, insulation work, tidy up the garden, redecorate.
He spent £11k

So total spend £136k, sold it for £56k, it cost him £80k out of his pocket/budget.

Clearly, the 11 house "exclusive" development that this facilitated was prufitable to him. So, HA gets an extra SH unit, developer gets desired development, taxpayer none the poorer. Everyone's a winner.

Wee_Willy_Harris

neverdespairgirl wrote: »

If they build 16 units that have a market price of £250k, and have to sell half to the council / HA @ £125k, how is that not a subsidy, for goodness' sake?

It's the same as building roads up to each house, or hooking up drainage. It's a developement cost.

FOURCANDLES_2

neverdespairgirl wrote: »

If they build 16 units that have a market price of £250k, and have to sell half to the council / HA @ £125k, how is that not a subsidy, for goodness' sake?

If it was not beneficial to the Builder he would not do it , if it was not beneficial to the local community they would not be permitted to build them .Like most things subsidised they do not better all directly but all things subsidised benefit ALL families in the UK.