Council house entitlement!!!

enigmam

As people seem to be interested in council/housing association housing, just a quick couple of points that I wasn't aware of before I started working for a housing association

Council houses/housing associations are subsidised. The development costs are partly paid by the government. So the council/HA are in a round about way gifted the house from tax payers money and then collect rent. The rent goes on any loans the HA might need for developement, repairs and profit. When HA's say they don't make a profit it's not strictly true. They make a surplus, which is in a lot of ways another word for profit, but rather than it going to shareholders it's put back into future development costs for more social housing.

"People buying their council houses on the cheap" - Doesn't really happen anymore (in HA's), to have the 'right to buy' I think you would have have to been a council tenant then transferred to HA. All tenants now are "assured" tenants, just like if you were private tenants. If you do qualify for 'right to buy' you do get a massive discount on the price of the house. Here's a tip.....The more savvy, and I've met a few, suddenly find a load of major repairs need doing in their council/HA home, then when the repairs are done, then make a 'right to buy' application.

Kitchen/bathroom thirty years old. - All HA's (can't strictly speak for council's but I'm 99% sure it's the same), have cyclical programs. So ever x number of years, the bathroom and kitchen will be replaced, outside will be painted etc. . If anyone has a kitchen/bathroom which is really old, it probably means the previous tenant refused a new kitchen/bathroom. Once they move out, the kitchen/bathroom should be replaced.

Housing associations - most of their stock is the council's old stock. The council just handed everything over to them. So suddenly in a certain area there will be no council housing, but there will be a large number of HA homes.

The only thing that annoys me about council/HA housing is that it's passed down the family. E.g. Family need a home, they qualify, they get a place. Nothing wrong with that, pleased that someone that needed a home got one. 50 years on, one of the couple dies. The widow adds son/daughter to the tenancy, as they've "moved in" **wink wink**. After a length of time, the remaining parent dies. So the son/daughter automatically get the house, whether they're on £50k a year or whatever, it doesn't matter. Nothing needed to qualify as far as I'm aware as they already "live" there.

I'm not posting this to get at anyone, it just seems a lot of people are interesting in council/HA housing, so I thought I would post some stuff. I'm far from a expert as I haven't been working for a HA all that long, so some of the stuff above might be slightly out, but on the whole it's right.

Pobby

OK talking about being entitled and yes many are.Consider this.A distant relative.Mid 30`s,singlemother,2 kids by same father,council accomodation.She decides that she really wants a daughter.Contacts estranged father to do the bizzo.Sadly has the third son on the way.So who knows maybe she will be 4th time lucky.Yes and by the way,the tax payer is collecting the tab.She doesn`t work and father doesn`t contribute.Good ain`t it!!!!!!!!!!!!!!!!!!!!!!!!!!!

MrsE_2

enigmam wrote: »

As people seem to be interested in council/housing association housing, just a quick couple of points that I wasn't aware of before I started working for a housing association

Council houses/housing associations are subsidised. The development costs are partly paid by the government. So the council/HA are in a round about way gifted the house from tax payers money and then collect rent. The rent goes on any loans the HA might need for developement, repairs and profit. When HA's say they don't make a profit it's not strictly true. They make a surplus, which is in a lot of ways another word for profit, but rather than it going to shareholders it's put back into future development costs for more social housing.

If they are getting or making a surplus (or profit) then they are NOT subsidised.
Yes the initial money was given/loaned/gifted from gov money, but its not a depreciating asset, its a capital asset that normally is apreciating in value.
So the gov still have their capital investment in the form of the bricks & morter.
If they make any surplus on their profit & loss then its profit, no matter what they do with it.
Capital investment is seperate from profit or loss.

neas

The government owns them.. but they are still subsidised if year after year the government (the public) pumps money into it.

If it wasn't subsidised then the profit from the rents would be used to buy more houses.

MrsE_2

neas wrote: »

The government owns them.. but they are still subsidised if year after year the government (the public) pumps money into it.

If it wasn't subsidised then the profit from the rents would be used to buy more houses.

You don't need to make a profit to NOT be subsidised.

All you need is to NOT make a loss.

squinty

Sorry Enigman, but some of your facts are not very factual. In particular you are mixing up what is true for a housing association with what is true for a local authority landlord.

1. The issue of subsidy. Whilst Housing Associations can 'bid' for development funding from the Housing Corporation they are also free to develop with their own borrowing or by cross subsidy. They may also do 'deals' with local authorites were the authority donate the land, and the association develop, ie there can be some subsidy. However there is not a level playing field, local authority housing departments do not have the same ability to aply for grant, nor to borrow against the value of thier stock they are in a mucher stricter financial regime. This is made worse by the national HRA (Housing Revenue Account) where most authorities pay into a national pot whislt some benefit. This year, there will be much more paid into the pot than paid from it, in effect council tenants are therefore subsidising other expenditute (including Housing Association tenants). For example in my authority over 25% of rental income is paid into the pot - a tax on council tenants?

2. The Right to Buy exists, and as the name suggests is a right for most secure tenants. Some housing associations only have a 'preserved right to buy' for tenancies transferred from local authorities as stock transfers, and not to properties they build themselves.

3. Work to property - every council (including ALMO) and Housing Association should be working to ensure every property meets the decent homes standard set by government by 2010. Whilst the standard is not particularly high, it does set a minimum. The guidance is complicated, but can be seen at
http://www.communities.gov.uk/documents/housing/pdf/138355

4. Tenancies are passed on. What you say is wrong, and I would be very worried if this is the way your housing associaton is working. Specifically a secure tenancy cannot be assigned apart from certain circumstances that are laid out in law. What this means is you cannot normally add peoples names to tenancies, nor can you remove them. A secure tenancy can be succeeded, but only once - so in your example mother and father are joint tenants, father dies and mother succeeeds to tenancy - there should be no other changes. if a son/daughter then moved in they have no further claim on the tenancy should mother die.

Sorry to be so pedantic, but I agree that there seesm to be a lot of interest in council housing. Just wanted to ensure that the information is correct.

Air-Wolf_2

Wow, what a post! You guys certainly know how to have a banter! I'm now going OT and going to bore you rigid about HAs...

Anyway I work for a HA - or Registered Social Landlord as we are technically known although that is due to change.

So RSLs were stand alone community based organizations that were born out of a need to house those in most need during the 60's - cottage industries set up by those who could see the 'system' failing those who were vulnerable and in need and being missed by Local Authorities - the RSL I started working at was started as a direct result of 'Cathy Come Home' That particular RSL went from owning a handful of houses to now owning and managing in excess of 20,000 homes - as you can see we are no longer community based businesses but major corporate companies handling vast sums of money - for example the RSL I now work for is due to take receipt of £7 million next week as part payment for a number of new homes we are building - recently we have been awarded over £30 million to build more homes during the period 2008 - 2011.

In addition to RSLs being created from scratch it is right that a number of Local Authorities have 'transferred' their stock - these are known as Large Scale Voluntary Transfer (LSVTs) organizations and become separate from the Local Authority and become regulated by the Housing Corporation. Once separated they can borrow against their asset base and use that money to improve their existing stock and build new homes.

Our rents are 'affordable'. They are subsidized at two stages - initially when the development is created it is highly likely that for a rented house/ flat social housing grant will be sued to enable the HA to offer the home as rented and then the rent is subsidized again for about 60% of our tenants because it's about that many that are in receipt of Housing Benefit. In addition to that we offer Shared Ownership properties - we either buy these at discount from volume house builders (via a planning obligation on them) or we build them ourselves. We offer the Shared Owner a 50% stake in the house for 50% of the value (their half) and then we charge them 2.75% as rent on the unsold equity - if over time they feel they'd like to buy more (additional shares) they can but at what the property's value is at that point in time (so if property value goes up - they benefit and we do).

Anyway - that's bored you to tears I guess. I love my job - I love the fact I'm providing something worthwhile, I love challenging a volume house builder and bartering on the price of land, units etc.

Oh and finally - OP - not a chance on the extra bedroom - get a sofa-bed ;-)

enigmam

squinty wrote: »

Sorry Enigman, but some of your facts are not very factual. In particular you are mixing up what is true for a housing association with what is true for a local authority landlord.

1. The issue of subsidy. Whilst Housing Associations can 'bid' for development funding from the Housing Corporation they are also free to develop with their own borrowing or by cross subsidy. They may also do 'deals' with local authorites were the authority donate the land, and the association develop, ie there can be some subsidy. However there is not a level playing field, local authority housing departments do not have the same ability to aply for grant, nor to borrow against the value of thier stock they are in a mucher stricter financial regime. This is made worse by the national HRA (Housing Revenue Account) where most authorities pay into a national pot whislt some benefit. This year, there will be much more paid into the pot than paid from it, in effect council tenants are therefore subsidising other expenditute (including Housing Association tenants). For example in my authority over 25% of rental income is paid into the pot - a tax on council tenants?

2. The Right to Buy exists, and as the name suggests is a right for most secure tenants. Some housing associations only have a 'preserved right to buy' for tenancies transferred from local authorities as stock transfers, and not to properties they build themselves.

3. Work to property - every council (including ALMO) and Housing Association should be working to ensure every property meets the decent homes standard set by government by 2010. Whilst the standard is not particularly high, it does set a minimum. The guidance is complicated, but can be seen at
http://www.communities.gov.uk/documents/housing/pdf/138355

4. Tenancies are passed on. What you say is wrong, and I would be very worried if this is the way your housing associaton is working. Specifically a secure tenancy cannot be assigned apart from certain circumstances that are laid out in law. What this means is you cannot normally add peoples names to tenancies, nor can you remove them. A secure tenancy can be succeeded, but only once - so in your example mother and father are joint tenants, father dies and mother succeeeds to tenancy - there should be no other changes. if a son/daughter then moved in they have no further claim on the tenancy should mother die.

Sorry to be so pedantic, but I agree that there seesm to be a lot of interest in council housing. Just wanted to ensure that the information is correct.

Some good points. More details that I put anyway

I am speaking from a HA point of view so I should make that clearer, but at some points people were talking about HA's so I included points about HA's. Maybe I'll go back and take the council bits out where applicable. As I said I haven't been at a HA long, just bits I've picked up so far. Interesting so far.

"For example in my authority over 25% of rental income is paid into the pot - a tax on council tenants?" - A tax on council tenants sounds bad. But once you know the rent plus this 'tax' equals only £300 a month for a 3 bed house (for example) it's hardly a bad deal when private rents could be double that.

I still think it's bad that tenancies are passed on without a separate look to see who is qualified for what, one generation or not. I would also say that people should maybe have to reapply for housing every x number of years, for example if I was given a council/HA house, got a different job, now earn much more money. Should I still be allowed a council/HA house?

"What you say is wrong, and I would be very worried if this is the way your housing associaton is working" - I wouldn't worry, it's in Scotland. Pretty sure you can sign over your tenancy to anyone who has lived with you and has used the property as their main home for the past six months or more. Seems it's stricter in England, which is a good thing. My fault for not mentioning Scotland.

Wouldn't say you were that pedantic (maybe your tone could do with a little work .... ), detail is always good. Especially since the rules for council/HA are so different.

enigmam

MrsE wrote: »

If they are getting or making a surplus (or profit) then they are NOT subsidised.
Yes the initial money was given/loaned/gifted from gov money, but its not a depreciating asset, its a capital asset that normally is apreciating in value.
So the gov still have their capital investment in the form of the bricks & morter.
If they make any surplus on their profit & loss then its profit, no matter what they do with it.
Capital investment is seperate from profit or loss.

What about opportunity cost? If I gave you a house and then told you that you could only rent it out at £300 a month, even though you could get £600 a month on the open market, would you not think that someone was subsidising whoever lives there? Plus I would tell you that if you sold the house, whether it was increasing in value or not, you would have to spend any sale proceeds on giving someone else less than market value rate, or you couldn't sell it.

MrsE_2

Air-Wolf wrote: »

Our rents are 'affordable'. They are subsidized at two stages - initially when the development is created it is highly likely that for a rented house/ flat social housing grant will be sued to enable the HA to offer the home as rented and then the rent is subsidized again for about 60% of our tenants because it's about that many that are in receipt of Housing Benefit.

GREAT POST

When you say they are subsidised at two stages......

YOu say the grant is the first stage of the subsidisy, but the initial capital to buy the asset is not a benefit for the renter, but the owner.
The renter will have the pleasure of the property (which they may or may not pay for) BUT the real benefit at that stage is to the owner who has recieved a grant to buy the asset???

Second stage subsidy, this is for 60% of the tenants who recieve benefits. The ones who are paying full rent share no part of this subsidy???




Great post, I'm not trying to pick holes in it at all. Just trying to get to the crux of this council rent subsidy.
Going on your info, the person who pays their own rent has no subsidy - as I maintain the subsidy to buy the asset is to the benefit of the owner not the renter.
But of course the person on benefits is being subsidised, but I don't think that was ever in dispute.