Should better off council tenants receive subsidy

sevenhills

Concerned75 wrote: »

I'm just wondering the views of members on here regarding council tenants subsidised despite in a reasonable financial situation.

A right wing friend of mine tells me that no council/Government money goes into council houses, that is not repaid, not sure.
They are cheaper than private, because the state makes no profit and the land is free or almost free.

sevenhills

TheGardener wrote: »

Are you seriously saying you believe a whole estate of unemployed/disabled/single/elderly low income households makes for a balanced community?! Take a walk round a few estates and tell me you still beleive that. I'm not 'narrow' in my view - I'm a pragmatist old enough to remember the mess many council estates were in in the 70's and 80's (some still are) with plenty of experience of life on council estates.

Many council estates are much better, people are richer; they no longer build large council estates.

AdrianC

sevenhills wrote: »

A right wing friend of mine tells me that no council/Government money goes into council houses, that is not repaid, not sure.

We've already shown that's not true - at least for my local authority. £3.3m/year shortfall on £55m expenditure.

They are cheaper than private, because the state makes no profit and the land is free or almost free.

"The state" (which usually means central government) isn't involved in provision of social housing. And there's no such thing as "free land"... If for no other reason than the sale of it would raise a substantial sum.

TheGardener

sevenhills wrote: »

Many council estates are much better, people are richer; they no longer build large council estates.

Exactly my point - and in order to stay better places to live, there needs to be balance in their demographics. Suggesting that families that can afford to move on is a retrograde step.
As for subsidising SH - I don't believe there is much 'tax payer' subsidy other then LHA which the better off families don't receive anyway.

sevenhills

AdrianC wrote: »

"The state" (which usually means central government) isn't involved in provision of social housing. And there's no such thing as "free land"... If for no other reason than the sale of it would raise a substantial sum.

So land owned by the Queen/Government should be sold for its real value?

http://www.leicestermercury.co.uk/pound-650-000-plot-land-sold-pound-1-leicester/story-21126561-detail/story.html

Andy Connelly, the assistant city mayor for housing, said: "We are selling the land to the East Midlands Housing Association (EMHA) for £1, which will allow much-needed accommodation. The way we look at it is that we are investing the value of the land so we can get the 15 units in return."
Coun Connelly said the sale would allow EMHA to access cash from the Government's Homes and Communities Agency.
He said the deal was similar in nature to one recently announced where the council agreed the £1 sale of 13 acres of former allotment land off Saffron Lane so that 50 social homes could be built.

Guest101

FBaby wrote: »

Indeed they should, but they don't currently. I expect if rent did go up, there wouldn't be such a desire to remain anyway so eviction won't be so much a requirement.

They stay in their council house because it is cheaper. If they separate? Well no different to any other couple separating. You can't allow an unjustified policy on the basis of 'what might happen' when the risk is no different to anyone else.

Whilst I haven't researched in detail, there does seem to be a trend between lower earners and single parenthood. I wouldn't like to make an assumption as to why that is, but it does appear to be an increased link.

Norman_Castle

sevenhills wrote: »

A right wing friend of mine tells me that no council/Government money goes into council houses, that is not repaid, not sure.
They are cheaper than private, because the state makes no profit and the land is free or almost free.

Council housing is managed through councils but not funded by them. Councils and housing associations borrow money to build properties which is repaid over time through rental income. The rental income also covers all costs including repairs and admin.

Subsidised rent is a misleading term which implies the rent is partially funded by someone other than the tenant which is incorrect.

Market rent is rent set at a level the market will pay. The expectation is that rental income will cover all costs and provide a profit. Most private landlords will aim to maximise their profits and increase the rent when possible.

The subsidy for social housing is this lack of profit above costs. This subsidy benefits council tax payers as it reduces the overall cost to councils of housing benefit payments.

MEM62

Chrysalis wrote: »

I only agree with the first paragraph.

Market rates are not reasonable rents, when rents are higher than what a mortgage costs it is not reasonable. If sufficient social housing was available there would be less pressure on the private market and rents would reduce. Councils and or Government need to build to correct this imbalance.

Since private landlords wont let out for less then their mortgage costs, the only real solution is a mass social house building program which only the greens and corbyn's labour are willing to do. I agree with building more stock. From a landlord's perspective (and I am an 'accidental landlord') it's obvious that you cannot rent for less than your costs. And if rents fall you will see those private landlords with high mortgages selling properties. This situation, and therefore the pressure on rents, could also be eased by changes in taxation - which at present is punitive.

Of course such a program would upset all the private landlords out there and also possibly trigger a house price crash and as such governments have avoided it to protect those people. There is no such 'protection' for private landlords. In fact, recent taxation changes are designed to discourage BTL.

The reason you see people under utilising properties is that there is a massive shortage of properties for single people or childless couples, council's have less demand for their larger properties vs their stock levels, and thats why the situation has come about. When properties do get built it is nearly always 2 or 3 bed properties as they trying to satisfy families with children's needs. Agreed. We go back to the fact that more social housing is needed.

The Local Housing Allowance system recognises market rates are unreasonable as they refuse to cover full rent's in the private sector. My opinion is that, even if rents were lower, a similar system would apply.

As an example I pay more for my one bed flat than the mortgage costs on my sister's house for a 3 bed house with a large garden and driveway. How long has she owned it? How big a deposit did she put down? How long is her mortgage? Without these facts how can you make a comparison. Even before the days of high rent and housing costs the mortgage payments on a house would eventually exceed rental costs as, interest rates aside, the mortgage payment remains fixed for many years whilst rents rise with inflation.

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Norman_Castle

AdrianC wrote: »

Housing Services cost £55.9m last year, and raised revenue of £52.6m, leaving it as a net cost of £3.3m, an increase from £3.2m the previous year. Given recent population figures, that's a subsidy of £17.50 per capita or £42 per household on average.

AdrianC wrote: »

We've already shown that's not true - at least for my local authority. £3.3m/year shortfall on £55m expenditure.

Your councils deficit will not be subsidised through council tax payments.

From my councils accounts,

Housing Revenue Account - Income and Expenditure Statement
The Housing Revenue Account (HRA) reflects a statutory obligation to maintain a revenue
account for local authority housing provision in accordance with Part VI of the Local
Government and Housing Act 1989. The Account is required to be self-financing and cannot
subsidise or be subsidised by the General Fund. The HRA Income and Expenditure
Statement shows the economic cost in the year of providing housing services in accordance
with generally accepted accounting practices, rather than the amount to be funded from
rents and government grants. The Council charges rents to cover expenditure in accordance
with regulations; this may be different from the accounting cost. The increase or decrease in
the year, on the basis of which rents are raised, is shown in the Movement on the HRA
Statement.

pimento

Chrysalis wrote: »

The reason you see people under utilising properties is that there is a massive shortage of properties for single people or childless couples, council's have less demand for their larger properties vs their stock levels, and thats why the situation has come about. When properties do get built it is nearly always 2 or 3 bed properties as they trying to satisfy families with children's needs.

....

As an example I pay more for my one bed flat than the mortgage costs on my sister's house for a 3 bed house with a large garden and driveway.

The 'Bedroom Tax' is also fuelling demand for smaller properties that a lot of councils can't meet.