Expensive council houses should be sold...

ukcarper

Generali wrote: »

As the council grant planning permission they can always buy cheap land and then grant themselves permission to build on it.

They could but they are more likekly to sell it on. Where I am quite a bit of army land has become surplice to requirments. It is all being sold to developers.

michaels

As Chewie suggests this presupposes that councils can build replacement properties more cheaply than the ones they are selling.

Reasons this might be possible:
1) No profit required (see Bovis figure of 33k per house but his may be an underestimate as presumably Bovis will charge a lot to 'expenses' to avoid tax)
2) Planning uplift (but see Chewies comment re selling the sites with planning permission so this should not reeally be counted)
New properties built to a common design and lower spec (although allegedly social housing actually requires more floor area than typical private newbuilds)
3) New builds built in cheaper parts of each council area (Of course this is part of the ghettoisation arguement but as an example prices vary locally by about 25% depending whether they are in catchment for the excellent schools or merely the good schools so in theory the council could sell four properties it still owns in the good catchment areas and use the proceeeds to purchase 5 in the less overpriced area and for zero cost increase the council housing stock by 25%)
4) Financing costs are obviously lower for councils although as the newbuilds are supposed to use the proceeeds of the sales how relevant this is is not clear to me.

Obviously it is socially desirable not to have complete seperation of the population by income by whether this outweighs the fairness arguement that those who work can not afford the same properties as those who do not is in the end a political question.

My answer is that all council rents should be set at market levels rather than subsidised (no doubt we will have to have the same debate again from those who do not understand that supplying something for less than it is worth is a subsidy). Housing benefit would ensure that those who could not afford it would not lose out whilst market rents would prevent those who could afford the true cost (Bob Crow) getting an unfair advantage.

chewmylegoff

michaels wrote: »

As Chewie suggests this presupposes that councils can build replacement properties more cheaply than the ones they are selling.

Reasons this might be possible:
1) No profit required (see Bovis figure of 33k per house but his may be an underestimate as presumably Bovis will charge a lot to 'expenses' to avoid tax)

The Bovis figures actually suggest that the total cost of building one of their average houses which they sell for about £164,000 is about £151,000, and the net profit is £13,000 / house (see Hamish's workings on the other thread).

The cost of construction appears to be about £131,000 which would be for design, permission, land, materials and direct labour. They then have to pay another £20,000 in overheads and financing costs.

Not sure what your point about charging "expenses" to tax means? Presume you're saying that some of the costs of a business are unnecessary and could be stripped out? Seems unlikely that public sector would be more efficient at doing something they have no experience of (building houses) than a private sector house builder.

ukcarper

Just watched on BBC news are it seems like they are talking about selling as and when they become vacant makes it even more of a non starter to me.

leveller2911

adouglasmhor wrote: »

This is from Wiki so it's opinion rather than fact.[/QUOTE

Quote: Proceeds of the sales were paid to the local authorities, but they were restricted to spending the money to reduce their debt until it was cleared, rather than being able to spend it on building more homes.




Partly true but the money raised could also be used to renovate existing housing stock.Many Councils used the money to fit Upvc windows, heating systems ,kitchens and bathrooms.

grizzly1911

adouglasmhor wrote: »

I can't remember TBH, I just know it was not allowed to use it to build more housing.

It was needed to help keep the country afloat along with all the other sell offs, paid for by previous generations.

grizzly1911

Figures on paper not reality. Won't happen and even on if it did they will not replace the stock in anything like the numbers, the salaries of the unelected/unaccountable quango members who will oversee need to be paid first.They need to be kept in a job and inflation proof pension, final salary pensions.

The_White_Horse

wymondham wrote: »

indeed, very sensible. The biggest council house should be a normal sized 3 bed semi. If your family is bigger than that then you share rooms.It should never be 'too' comfortable in social housing....

this is correct, except it should be a 2 bedroom flat. never a house. you want a house, go and get a job and pay for it.

CKhalvashi

Loughton_Monkey wrote: »

This is not always possible.

Firstly, such land must be owned by (a) A relative of a councillor, (b) A business associate of a councillor, (c) a shady developer who wishes a councillor's wife to 'join the board'.....

Secondly, because of the above, it will not be "cheap".

Large Gin & Tonics all round.......

Errm, I'm a Cllr, and we'd have to declare if we're on the board of a respective organisation. At a meeting regarding parking permits, I even had to declare that I'm the customer of 'xyz Vets' in the town, as it was one of the affected streets.

chewmylegoff wrote: »

my understanding was that the sales proceeds went to central government, not local councils, so they couldn't spend it on anything, let alone building more houses?

The point that I've made several times is that for every 1 property sold, 2-3 more should have been built. Well done Chewy for bringing this up!

What the UK (IMO) should be doing is creating vast stocks of housing, encouraging people to breed when they have the correct qualifications and allowing all people, even council tenants, to own their own property, thus reducing the burden on the state for housing benefit and restricting the housing market short-term. Long-term, the government will benefit anyway.

Think; is you're chucking 100,000 cheap (say 1.5x build cost + 3x land at market rate) properties onto the market each year, costs will be kept down, overcrowding will go down, and the economy will be perked up by the amount of jobs available.

The latter is probably not going to happen, although I am in negotiations with the MP about it.

CK

ukcarper

The_White_Horse wrote: »

this is correct, except it should be a 2 bedroom flat. never a house. you want a house, go and get a job and pay for it.

I don’t agree council housing in the 60s and 70s provide affordable housing to people working in low paid jobs. In the main they were occupied by hard working people who respected their property and neighbours. That is better than paying housing benefit to people to help them rent private accommodation. If they have now become full of the intentionally unemployed that is a different problem, there are still a lot of low paid hard working in people in council houses.