Byrne: We spend £bns on HB but don’t build houses. It can't go on.

Thrugelmir

michaels wrote: »

Once the Council has built it, it has an asset that may well be worth more than the £100k build cost and will probably also command a higher rent than the council will charge for it.

That's what the UK has to move away from, short termism. As a nation we need to value long term returns by investing for the future. Not just sell something for an instant profit. Then wonder why property is so unaffordable and the welfare budget is spiralling.

grizzly1911

michaels wrote: »

Once the Council has built it, it has an asset that may well be worth more than the £100k build cost and will probably also command a higher rent than the council will charge for it. Thus by renting it out to a council tenant the council is giving up extra money it could have by renting it out at market rate or selling it. Thus it is actually costing just as much as the housing benefit payment to the private landlord.

So what if it has got an asset that would command a higher market rent. the council isn't a profit centre, it is a cost centre for the tax payer. HB is a cost to the tax payer. We should be looking at ways to reduce the cost to the tax payer not chase wooden dollars.

It is also an asset, that if looked after, can generate many times its cost several times over.

mulronie

Worth considering in all of this that 20-40% of HB will likely end up back with HM Treasury in the landlord's income tax return.

Housing Benefit is a ridiculous system, however, making all sorts of perverse situations tenable.

For my part I have a tenant of 2 years in Bristol who has just gone on to HB with a 3 bed entitlement. She pays £150/week but the place is probably worth about £155. If she were still employed, I'd probably leave it be as she's a good tenant, but I'm debating whether to play the system and fire off a S13 notice for the LHA maximum of £167.31. She certainly won't care and Bristol Council will pay it without a second thought. What a weird system that would let me do that.

grizzly1911

mulronie wrote: »

Worth considering in all of this that 20-40% of HB will likely end up back with HM Treasury in the landlord's income tax return.

Wouldn't a bigger proportion end up back in the bank through interest payments for newer entrants?

Graham_Devon

Why oh why do political figures always say what needs doing when they are not in power?!

They have all the time to make these things happen when in power, but never ever do. Seems to be cross party does this.

It's like Ed Balls the other day saying "we must build more houses, there is a chronic shortage". So why did they make absolutely no effort to do so!?

You can bet your bottom dollar the tories and lib dems will be saying it if they don't reign after the next GE too.

eelsoup

Graham_Devon wrote: »

Why oh why do political figures always say what needs doing when they are not in power?!

Indeed. I can remember David Cameron, Nick Clegg and Vince Cable saying that something needed to be done about house prices during the run up to the last election.

I think they're stuck between a rock and a hard place. Anything they do to increase housing supply or reduce cost will result in mass insolvency and banks going down.

Whether or not it was intentional, we're now living in a generational apartheid.

Thrugelmir

Graham_Devon wrote: »

Why oh why do political figures always say what needs doing when they are not in power?!

Plays well to the party faithful. Yet doesn't commit the opposition to a policy.

Also requires a long term coherent strategy. As infrastructure is required along with jobs. No point in building houses in the wrong places.

thelawnet

mulronie wrote: »

Worth considering in all of this that 20-40% of HB will likely end up back with HM Treasury in the landlord's income tax return.

????

Income tax is only 20% to start with, you can write off maintenance, interest costs (sometimes as much as the rent), etc, so average income tax payable is likely to be more like single digits).

leveller2911

mulronie wrote: »

For my part I have a tenant of 2 years in Bristol who has just gone on to HB
with a 3 bed entitlement. She pays £150/week but the place is probably
worth about £155. If she were still employed, I'd probably leave it be
as she's a good tenant, but I'm debating whether to play the system and
fire off a S13 notice for the LHA maximum of £167.31.

I think this statements says as much about you as it says about the system.Both need addressing.....

mulronie

leveller2911 wrote: »

I think this statements says as much about you as it says about the system.Both need addressing.....

Well they say something is worth what the highest bidder will pay.

In my head it's worth £155, but if Bristol Council obviously think differently if they will pay £167.31/week for it without question. Nothing stopping them finding alternative accomodation for the tenant, or going to a Rent Committee, if they disagree.

The point is that "the system" is offering me an extra £900 a year for simply filling in a form, with no risk that the tenant will leave because of it. What would you do?