MSE News: Benefit cap has 'couple penalty'

hermante

Bogof_Babe wrote: »

Well that'll be a pensioners vote winner... NOT.

Don't see how it would work anyway, as asking prices are set by vendors not the government (thank the lord).

That's exactly the problem. "Pensioners" are holding the rest of the country to ransom. But we can't do anything about it, short of denying older people the vote!

Of course rents are set by the government. If the government reduced housing benefit, then the landlords would have to set their rents cheaper. If working people could afford those rents, then the landlords would already be renting to them rather than someone on benefits! (Also, councils need to stop paying landlords directly.)

Every so often there is a post about the rising rail fares for "commuters". If your season ticket is unaffordable, why don't you move closer to where you work? If London is "unaffordable" for a working family, then they move somewhere cheaper, but somehow benefit claimants can be paid more to stay where they are?

~Chameleon~

rickbonar wrote: »

Getting back to benefits ......... these "terrible" claimants will never own their own properties but they are making a very handsome living to the Lords ladies and Sirs and OBEs that own vast portfolios of properties which no doubt are increasing and are really the where your benefit tax is going.

You only have to look at this list to see just how many MPs are receiving income from rental properties and I wonder how much is from tax payer's money in the form of Housing Benefit!!

hamsterfan1

in case any of you thought benefits were too much
single person £67.50
couples (both over 18) £105.95
plus housing costs
how many children would someone have to have to be capped?

MarkCo

As somebody who has been at the mercy of the benefits assessment system, and who was offered £8.25 per week to keep myself, my wife and daughter, pay the mortgage and bills, I wonder how the people getting benefits over £500 per week can think that they have a case against the proposed capping?

£500 is above the average wage, which is more than my total household income when I was employed and I was paying my own mortgage and rates with a full household of 5 (two sons now classed as independent - but unable to secure employment). I had no extra benefits apart from Child Allowance and Tax credit and believed that was the way it should be.

Times are hard and employment opportunities reducing. I appreciate many families will be pushed into the benefits system, but for those who believe they have a 'right' to live off the system and to keep increasing the burden by increasing their household numbers should realise that the rest of us should not have to pay for this. As a couple, my wife and I believe that there should be a cap on the level of children that the state will support and then it's up to the parents to support any more. This we feel is fair for all as it offers a choice.

As for couples living apart to maximise their benefits, I see this as just a synical attempt to 'screw' the system and should be dealt with as any benefit cheat should be.

BTW. As for the £8.25 benefit payment. I was forced into going freelance to support my family and my income is way below the average, but I still do not recieve any benefits above the one's I was receiving whilst working.

MarkCo

hermante wrote: »

That's exactly the problem. "Pensioners" are holding the rest of the country to ransom. But we can't do anything about it, short of denying older people the vote!

Of course rents are set by the government. If the government reduced housing benefit, then the landlords would have to set their rents cheaper. If working people could afford those rents, then the landlords would already be renting to them rather than someone on benefits! (Also, councils need to stop paying landlords directly.)

Every so often there is a post about the rising rail fares for "commuters". If your season ticket is unaffordable, why don't you move closer to where you work? If London is "unaffordable" for a working family, then they move somewhere cheaper, but somehow benefit claimants can be paid more to stay where they are?

Just a point about landlords being paid directly - they can be paid like this but councils now require a % reduction in the cost of rent for this facility. Otherwise rents are paid via the tenant which in itself can cause problems with non payment.

Having a POP at 'responsible' landlords is a very blinkered way at looking at how they are infact helping the government and councils with the housing shortages.

Sixer

Bogof_Babe wrote: »

Well that'll be a pensioners vote winner... NOT.

Don't see how it would work anyway, as asking prices are set by vendors not the government (thank the lord).

Well, here's the thing. I'm not a pensioner: I'm in my late forties. I bought a house in London in 1990 for £68k. I sold it for £215k in 2000 and bought a similar type of house in a much cheaper area for £140k (move was for health/lifestyle reasons, not economic ones) and paid off my mortgage.

My current house is now worth just shy of £200k. I own it by dint of paying a mortgage of £60k for just ten years. I've been mortgage-free for ten years, so my savings and retirement funds look extremely healthy.

I'm not so self-deprecating as to say my current situation isn't partly due to my own prudence - we paid for the considerable moving expenses and any house improvements we've done over the years out of savings not extra borrowings. But I'm also not stupid enough to think that successive government policies aimed at propping up house prices at all costs - including the recent bank bailouts - aren't the larger reason I'm now sitting quite so prettily.

It doesn't really matter to me what my house is worth. I don't intend to move in the near future, and even if I did, what house I would buy would be equally devalued if there was a house price crash.

What DOES matter to me is whether or not my children and all the other children in their generation will ever be able to earn enough to buy a property before their parents die and leave them their own houses (if it hasn't gone on social care by then).

So, despite being an "on paper" loser in a house price crash, I would sooner see one. So that my kids, and everyone else's kids, can afford to rent somewhere decent and aspire to home ownership. Presumably some way would have to be found to ameliorate the losses for current mortgagees, but it's still better than the black hole of QE, simply rebuilding bank balance sheets, which merely continues to prop up unrealistic house prices in a low wage economy.

And it's still better than paying out a fortune in housing benefits because rents are so high and blaming the poor saps who earn a pittance for having to claim them.

It would work, because vendors would be forced to ask less if government policy changed. You don't really think house prices are set by a pure free market, do you?

rotoguys

Oneday77 wrote: »

You have made absolutely no sense and misunderstood me. Suppose someone has been taking home £20k a year. They get made redundant and end up on benefits and they end up with say £24k in benefits. How could that a) be fair and b) encourage someone to go work. Especially if they were maybe paying child care costs while working.

My previous post should have included that if anyone's employability/ productivity is seriously hampered by illness or disability it is a fair use of benefits.

I'm sorry if I misunderstood you.

It isn't fair I will agree. But is that just the fault of the claimant for claiming that level of benefits, the government for allowing it to happen or maybe the employers for not paying a reasonable wage?

When benefits exceed a mans working wage there is something wrong! More should be done to increase wages, not reduce benefits - certainly not for families with young children!

Bogof_Babe

We bought a house in 1974, when we married, for £8,950. We put a £4,000 extension on it in 1986. It recently sold (not by us - we moved a long time ago) for £157,000. In 1974 we were earning a combined wage of about £4,000 gross, both working full time.

The equivalent earnings now to buy that same house (albeit worth more than we paid, due to the extension) would be a couple both working and earning a total of £70K, or £35K each - not unrealistic these days.

Inflation has affected wages (until very recently) as well as property prices.

As for asking prices, people will always market their home for close to what they think they can get. Supply and demand will hold prices up.

Whoever threw in the red herring about rentals and profiteering landlords, while quoting my post about home ownership, is talking about a different section of the market altogether. I'm talking about people who own the homes they live in. I don't see how you can legislate for a reduction in the value of same overnight.

Besides, if such a thing were possible, say it was suddenly decreed that everyone had to knock 20% off their asking price, it would only inhibit those on their way UP the property ladder, as the differentials would increase proportionately, so no-one would be able to vacate their starter homes to make way for new first-time buyers, who are presumably the very people who need to be helped.

Sixer

Bogof_Babe wrote: »

We bought a house in 1974, when we married, for £8,950. We put a £4,000 extension on it in 1986. It recently sold (not by us - we moved a long time ago) for £157,000. In 1974 we were earning a combined wage of about £4,000 gross, both working full time.

The equivalent earnings now to buy that same house (albeit worth more than we paid, due to the extension) would be a couple both working and earning a total of £70K, or £35K each - not unrealistic these days.

Inflation has affected wages (until very recently) as well as property prices.

As for asking prices, people will always market their home for close to what they think they can get. Supply and demand will hold prices up.

Whoever threw in the red herring about rentals and profiteering landlords, while quoting my post about home ownership, is talking about a different section of the market altogether. I'm talking about people who own the homes they live in. I don't see how you can legislate for a reduction in the value of same overnight.

Besides, if such a thing were possible, say it was suddenly decreed that everyone had to knock 20% off their asking price, it would only inhibit those on their way UP the property ladder, as the differentials would increase proportionately, so no-one would be able to vacate their starter homes to make way for new first-time buyers, who are presumably the very people who need to be helped.

By house price to wage ratio (based on how much actual purchasers actually earn), houses are about a third more expensive than they were in the 1970s. In comparison to the average wage, houses are now about a third more expensive than they were in 1990, twenty years later.

Nobody is suggesting mandated selling prices. I, personally, am suggesting that the government, unlike preceding governments of whatever hue for the past thirty years, abandons economic policies that effectively prop up house prices no matter what else is happening and no matter what the cost. The cost, at present, is unaffordable houses for first time buyers and unaffordable rents for low, and even middle, income households.

Bogof_Babe

Sixer wrote: »

By house price to wage ratio (based on how much actual purchasers actually earn), houses are about a third more expensive than they were in the 1970s. In comparison to the average wage, houses are now about a third more expensive than they were in 1990, twenty years later.

Nobody is suggesting mandated selling prices. I, personally, am suggesting that the government, unlike preceding governments of whatever hue for the past thirty years, abandons economic policies that effectively prop up house prices no matter what else is happening and no matter what the cost. The cost, at present, is unaffordable houses for first time buyers and unaffordable rents for low, and even middle, income households.

Your understanding of economics greatly exceeds mine, so I'll concede your point, and wait with some trepidation to see whether your prophesy comes to pass!

Not sure why mortgagees should be exempt from any resulting pain though. They would ultimately end up in a better position than those who struggled with mortgages and have now completed paying them.