Corbynomics: A Dystopia

ukcarper

cells wrote: »

I would ask it the other way around. Why is property expensive in London and to an extent expensive in the south east while everywhere else (most the nation) is affordable

For the opposite reason.

TheNickster

cells wrote: »

You say house prices are too high. I counter with the fact that in most the country buying a home is cheaper than renting a home off the council. Your counter to that is that some people can't or won't work so for them buying a house is impossible? I feel im talking to a brick wall. Yes but what the hell does that have to do with the fact that buying is cheaper than social housing (for most the country) therefore property isn't unaffordable.

You are aware that your silly argument holds even if house prices fall 80%? There will still be people unable to buy eg a poor 80 year old pensioner so would you conclude post a 80% house price crash that property was still unaffordable?


The more interesting part of this debate is that the governnt should allow those in receipt of housing benefit (most of them are social tenants) to use that sum to buy a property should they wish. So if they are currently getting £500 per month in housing benefits to pay for their 3 bed council flat and the mortgage on a local 3 bed terrace is such that the interest is less than £500 per month (eg £300pm) then that should happen. The state would go from paying out £500pm on housing benefit plus increases as the social landlords always increase rents to paying a foxed £300 a month. The government can take first charge on the Property and recoup costs on sale/death. You have increases ownership and freed up a social house slot and spend less in the process. Win won for all. Of course if you want people to stay poor then you will be against this

That is the best suggestion I have heard in a long time but do you really think that this (or any) government would do that? If not then we are stuck where we are now.

cells

TheNickster wrote: »

That is the best suggestion I have heard in a long time but do you really think that this (or any) government would do that? If not then we are stuck where we are now.

I don't think its possible. However what is possible is that the government sells its social housing stock to social tenants via its right to buy and it also lends the tenants the remaining part of the payment on a charge on the property. Up to some figure maybe £50k max

So for instance imagine a council block with 50 flats worth £60k each. The right to buy discount is 70% so the tenants can buy for £18k. The government lends them this £18k on a charge on the property plus 2% pa.

The block goes from 50 households receiving £500 per month in HB to a privately owned block not needing HB. That is a saving of £300,000 a year. The cost is nil as the £18k loan plus interest is repaid by the tenants on sale

If a million social households on housing benefit were converted to private households and the average saving was £400pm in housing benefits that would be a £4.8 billion per year reduction in housing benefits. A very significant saving. You also give one million of the poorest in society a home of their own and a bigger stake in society

I would extend it to all social tenants. Zero cost and increases homeownership. With a limit of max £50k for the loan while typically I suspect it would be closer to the £20k mark

TheNickster

cells wrote: »

I don't think its possible. However what is possible is that the government sells its social housing stock to social tenants via its right to buy and it also lends the tenants the remaining part of the payment on a charge on the property. Up to some figure maybe £50k max

So for instance imagine a council block with 50 flats worth £60k each. The right to buy discount is 70% so the tenants can buy for £18k. The government lends them this £18k on a charge on the property plus 2% pa.

The block goes from 50 households receiving £500 per month in HB to a privately owned block not needing HB. That is a saving of £300,000 a year. The cost is nil as the £18k loan plus interest is repaid by the tenants on sale

If a million social households on housing benefit were converted to private households and the average saving was £400pm in housing benefits that would be a £4.8 billion per year reduction in housing benefits. A very significant saving. You also give one million of the poorest in society a home of their own and a bigger stake in society

I would extend it to all social tenants. Zero cost and increases homeownership. With a limit of max £50k for the loan while typically I suspect it would be closer to the £20k mark

Some possible snags.

1) The social housing stock 'sold' to the tenants would have to be in good nick - not fair for them to have to then fund major repairs..

2) There would still need to be some social housing for those legitimately on the waiting lists - homeless, those living in unsuitable housing - bed and breakfast and hostels, those on the list for environmental health reasons etc. This would be ongoing for the foreseeable future.

3) Objections from those who can afford to buy because they don't see why they do not get any help to buy when they consider they have worked to get where they are and the poor have not - there have already objections like these about council house provision already in this thread.

4) Undermines aspirational motivation for the poor which the government thinks is important - would require a reversal of the policy of giving 'incentives' by reducing benefits.

cells

TheNickster wrote: »

Some possible snags.

1) The social housing stock 'sold' to the tenants would have to be in good nick - not fair for them to have to then fund major repairs..

2) There would still need to be some social housing for those legitimately on the waiting lists - homeless, those living in unsuitable housing - bed and breakfast and hostels, those on the list for environmental health reasons etc. This would be ongoing for the foreseeable future.

3) Objections from those who can afford to buy because they don't see why they do not get any help to buy when they consider they have worked to get where they are and the poor have not - there have already objections like these about council house provision already in this thread.

4) Undermines aspirational motivation for the poor which the government thinks is important - would require a reversal of the policy of giving 'incentives' by reducing benefits.

1. One would hope the social homes are already decent
2. Sure I too agree the UK needs some social homes to cater for the people who can't buy or rent privately but the number of households this applies to is surely much fewer than 5 million
3. Lower HB bill means theybwill be paying less taxes or getting more services they should be OK with it and seeing as how RTB is liked by the right and surely helping the poor is liked by the left then this should be OK
4. What why how. A social tenant v a recent RTB owner has no less or more incentive to better themselves


There are some snags.
1. Those in flats will be responsible for their own service charges which are typically about £80 a month so they need to understand this and be able to pay it. I don't think its a huge problem £80 a month isn't a huge burdens. Does not apply to homes.
2. The government could get a bigger return by selling the stock privately as the became vacant. The left would of course hate this option.


I think its a good idea but I've not yet spent enough time to be certain. I might do a thread on it specifically to get a debate and possibly highlight problems and pitfalls I've not thought of

TrickyTree83

TheNickster wrote: »

That is the best suggestion I have heard in a long time but do you really think that this (or any) government would do that? If not then we are stuck where we are now.

Not a bad idea, not as good as getting rid of housing benefit all together. I don't see the problem of large apartment blocks again to house those in need temporarily.

My wife's family live in a Khrushchyovka (her grandmother in a Stalinka), they make it work on the 5th floor. This kind of housing should be shelter of last resort, letting it become perpetual is part of the problem.

ukcarper

Another problem the turnover rate for social housing is 6% thet will have to be accommodated which soon will eat up any savings.

cells

TrickyTree83 wrote: »

Not a bad idea, not as good as getting rid of housing benefit all together.

how will the housing associations and councils cope when their social tenants no longer get HB? or is HB only evil when its for a tenant renting a non social property?

cells

ukcarper wrote: »

Another problem the turnover rate for social housing is 6% thet will have to be accommodated which soon will eat up any savings.

What?

If we take a town up north where it costs £100 per month in interest to buy a house or £400 per month in interest to rent off the council then that shows in that town the council is not efficient enough to be providing housing

As the properties become vacant they should be sold so people can buy them and pay £100 per month in interest rather than £400 per month to the council

The only difference in selling the property to an existing social tenant or selling it in the open market when it becomes available is a lotto ticket

gadgetmind

TrickyTree83 wrote: »

Not a bad idea, not as good as getting rid of housing benefit all together.

Agreed. Reduce taxes across the board and let people fund their own property. If this means they need to travel or relocate, well that's no bad thing.

This kind of housing should be shelter of last resort, letting it become perpetual is part of the problem.

Why? Huge numbers of people live in large apartments and are perfectly happy with them. Go to (say) New York and it's absolutely the norm, the apartments are good quality, and they are well maintained.