Council house entitlement!!!

terryw

Spark wrote: »

I believe that the rents in the private sector should be capped down to the level of the council housing sector. It's not the council rents that are too low, but the private rents that are extortionate. That would give the lower earners another alternative to going for council accomodation because they can't afford renting in the private sector, so free more council houses for the ones who needs it most.

Fine idea in theory, but very quickly there would be absolutely no private landlords as it would be impossible for the outgoings to be covered by the rents received.

There have been draconian rent controls in the past, and believe it or not, but landlords would just walk away from a rented property as they were unable to continue subsidising it!
the poster formerly known as
terryw

Frances63

I agree with Terry. Why should a private landlord subsidize anyone? They are effectively running a business and need to get a decent return on their hard earned money. They have to finance the house and must at the very least cover their monthly mortgage payments. Otherwise what's the point? They don't owe anyone anything!

Supply and demand dictates rightly the rents they can charge.

Spark

There have been draconian rent controls in the past, and believe it or not, but landlords would just walk away from a rented property as they were unable to continue subsidising it!

I cannot remember a time when in this country the private sector was controlled, it must have been a very long time ago.
I am living in a 2 bedroom flat in a towerblock, I new someone in the same block of flats who had a 1 bedroom flat and was renting privately, she was paying double rent that what I was paying for mine. How can a private landlord justify doubling the rent?
If the landlords walk away from rented properties, maybe there would be more houses for sale at lower price, HA and councils could buy some of them and offer an affordable rent, but my guess is that those landlords would walk away because they are too greedy and they would not be able to overcharge like before. It's like the idea of renting a property furnished, only the private sector does it, with a council property you got to buy your own furniture, but in the private sector if the property comes furnished the landlord can add a bit more to the rent.
It's because of the private sector being so high that there are so many people applying for council houses, lower the private sector rents and some people won't bother trying for a council property.

Frances63

Spark, a landlord would simply not get his flat rented out if he were charging double the going rate. It is you that was getting a subsidised rate. You were very lucky!!!

To turn this on its head.... When I bought my first home it was a run down ex-council house. I had to do it up by myself from scratch. It was filthy. There was a dead budgerigar stuck on the floor when I moved in. It took me years to do it up becuse I had no spare cash after paying out my £600 per month mortgage!

My next door neighbours were a working couple. They paid £80 per month between them for the exact same house. There's was kept in good repair by the council, including a new roof, guttering, double glazing and subsidised insulation.

I couldn't afford any of the above. I worked full time and all the overtime I could get, had to take in a lodger and couldn't afford a car. I didn't go out for a meal for years, and certainly couldn't afford a holiday!

Believe me, those of you who are lucky enough to get council housing don't know how lucky you are. I don't think you should be complaining.

terryw

Spark wrote: »

I cannot remember a time when in this country the private sector was controlled, it must have been a very long time ago.

I must be quite a bit older than you Spark! Rent controls were in place in the 1950s and one of the areas where landlords just walked away was Notting Hill! How times change! Many cities in the USA were also blighted when rent controls were tried. It is generally accepted that rent controls do not work. It is a fascinating area of social history.

By the way there are still a great many properties with "sitting tenants" from these days and the properties can only be sold for a percentage of their true value because the rents are so small and can only be increased by a minute amount using a complicated procedure. They are difficult to sell for obvious reasons and often the tenant will demand many, many thousands of £s to move out.

For what it is worth, the average net rent income on lettings is reckoned to be about 5 per cent, and over any reasonable length of time money invested in stocks and shares will outpace income and capital gains from property. Plus money invested is property is not very liquid....it can not be changed into cash quickly or easily most of the time. I really can't understand why there is so much flack thrown at private landlords who are providing a necessary service, but the same flack is not hurled at investors in building societies or stocks and shares.
the poster formerly known as
terryw

minimoocow

Apologies I haven't read through all this thread - I do remember it from the start but have skipped a few pages in the middle so excuse me if this has been said elsewhere!

I would agree that there is a lack of social housing however I don't understand why once you are in you are sorted at the expense of others . . . if you now earn enough to buy or rent privately why do you not have to move on thus freeing up a council house for someone who does need it?

I know people don't really want to be forced to move but this happens in the private sector all the time as landlords sell or don't renew contracts so why would it be so unfair for it to happen to social tenants once they no longer qualify as such - after all you don't get benefits unless you qualify so why get the benefit of a house?

MMC

squinty

terryw wrote: »

Thanks, Squinty, for the post but the link does not touch on the capital cost incurred by councils in building dwellings. This is the crux of the problem that council homes can never be other than subsidized. Councils do not have and have never had the ready cash to build or buy dwellings so the money was borrowed usually using council bonds. The interest payments on said bonds would always be higher than the rent received apart from the other costs of letting.

Hi Terry,

Need to disagree with you again. - (though I'm not sure that a discusssion on capital financing for local authorites is all that interesting to many people !!)

What you say may be true historically - however the Local Government and Housing Act of 1989 introduced the concept of ring-fencing for the Housing Revenue Account , this means that all expenditure relating to council housing provision, including debt payments, is kept in a different acount that cannot be subsidised from other council funds (eg council tax).

Since this time there have been strict controls on council borrowing (particularly with concerns about borrowing impacting on the PSBR), and rules concerning debt repayment - at times some capital reciepts from land sales (or sometimes RTB's) had to be used for debt payment. This means that most local authorites now have low debt payments (with the cost of capital being met by Revenue), and indeed many are debt free. However, although the current housing subsidy system does make a net contribution to the Treasury, there are still a number of councils, mainly London Boroughs who are dependent on the Subsidy to survive.

Many local authorities are also land owners, and are in many ways. the perfect answer to contribute towards the curent housing crisis. If the government allowed the authorities who were in surplus to keep their income, and allowed more flexibility on future rent levels there is no reason why local authorities could not build on this land, and keep local control of social housing.

It sems crazy that the govenrment will give millions of pound to housing associations to encourage them to build (and the ability to borrow to grow) - yet local authorities are denied both these opportunities.

Spark

Believe me, those of you who are lucky enough to get council housing don't know how lucky you are. I don't think you should be complaining.

Why is it that every time a council tenant is trying to make a point or expressing an opinion, it is seen as if we are complaining and it is presumed wrongly that we don't know how lucky we are?:mad:
Frances63, you are lucky to have been capable of buying a house, I would never be able to afford a mortgage on my wages.
I did think of leaving my flat, mainly because I was breaking up with my ex, fortunately he left, but it would have been the biggest mistake of my life, as I would only have been able to houseshare or rent a room, and never been able to get another council property again. And I've never had a car neither as long as I've lived in the flat, I could afford it but I would not be able to afford much else beside but bills and food.

I know people don't really want to be forced to move but this happens in the private sector all the time as landlords sell or don't renew contracts so why would it be so unfair for it to happen to social tenants once they no longer qualify as such - after all you don't get benefits unless you qualify so why get the benefit of a house?

Why always dragging down the best things to a lower level and not trying to better the not so good things? It's like saying " I'm not so lucky as you so you shouldn't be more lucky than me.
Private landlords should be forced to give longer contract terms and if they want you out before the end of the contract they should compensate the tenant.
I am only trying to think about solutions who would make it easier on private tenants, but what do I know, I'm only a council tenant......:o

Oh, and another thing, I've never had the need to be on JSA or benefit since I got the flat so it was fully paid by us/me without any handouts.:)
Just in case..............:rolleyes:
And terryw, you are, I think, a bit older than me.............;)

SingleSue

£80 a month! Blimey my rent is more than that a week....and it is housing association.

Sometimes, even when circumstances improve, it is still not possible for people to move on. It can be anything from being credit blacklisted to not actually earning enough to get a mortgage.

For me, our circumstances improved (enough for us to think about private let) only for them to go into a tailspin downwards again (illness first and then finally divorce).

Frances63

Spark wrote: »

Frances63, you are lucky to have been capable of buying a house, I would never be able to afford a mortgage on my wages.

I take your point Spark, but actually I did not feel very lucky. I could not get a council house. I tried but the waiting list was 10+years for single people. Unless I was prepared to become an unmarried mother I would probably still be waiting now.

I could not afford the mortgage either and had no deposit, but I was lucky in that my father was prepared to sign as a guarantor, putting his own home on the line. I would never have let him pay a penny and that's why I took in lodgers and worked my butt off to make ends meet. I also had to buy in the rough end of town and a revolting house that someone had died in.

It certainly didn't feel like I was lucky watching my neighbours getting lots of priviledges for free while I got nothing. It really was a struggle. It was not just luck, it was sheer hard work and sacrifice for a very long time.