Monday, 2 January 2012

Grant Shapps doesn't do logic

From the BBC:

Plans to make it a criminal offence for council tenants to sub-let their homes are to be unveiled by the government. A consultation will also detail plans to force thousands of tenants earning £100,000 or more to pay market rates. An estimated 160,000 tenants sub-let their homes, which is not currently an offence...

Housing Minister Grant Shapps said: "For too long this country has turned a blind eye on the multi-billion pound problem of housing tenancy fraud and abuse. This year the coalition is determined to end that scandal. Why should someone on a six-figure income enjoy a fantastically subsidised council rent, whilst those in real need languish on the waiting list? And why is it so easy to get away with sub-letting your council house at market rent and simply pocketing up to £1,000 a week at taxpayers' expense?"


From Dash 24, two weeks earlier:

The housing minister Grant Shapps plans to increase the cap on discounts for council tenants to buy their homes to £50,000, while pledging to replace every sold home with a new affordable one. Mr Shapps said the restrictions on discounts over the past few years have made Right to Buy (RTB) meaningless in many parts of the country, with fewer than 3,700 sales last year compared to a peak of 84,000 less than 10 years ago...

This will mean, for example, that someone in the West Midlands who had been a tenant for eight years on an household income of £20,000 could buy their £90,000 flat with a discount of £50,000 compared to £26,000 previously - effectively doubling their discount. In London, a tenant for five years buying a flat worth £160,000 would also receive a discount of £50,000 - more than three times the previous cap of £16,000.


So, to recap...

- 160,000 tenants sub-letting their council houses and making a handsome profit (because council house rents are lower than market rents) is A National Scandal, but

- allowing (say) 84,000 tenants a year to lock in an extra £50,000 profit by allowing them to buy their council houses at undervalue, as well as 'up to £1,000 a week' rental income by subsequently renting them out is... what, exactly?

Or to turn that into a question, if subletting council houses at a profit of 'up to £1,000 a week' is being done 'at taxpayers' expense', is selling off council houses for a discount of 'up to £50,000' not also something being done 'at taxpayers' expense'?

5 comments:

Barnacle Bill said...

It's the Coalition's version of nuLabor's "joined up" government?

Mark Wadsworth said...

BB, being fair to the Lib-Cons, NuLabour were exactly the same, especially as regards Home-Owner-Ism.

Bayard said...

"is... what, exactly?"

The finest use to which taxpayers money can be put - buying votes.

Will Foxton said...

Can I just say this seems pretty obvious, and a false dichotomy.

To explain: Subletting your council house reduces the social housing supply inequitably. You take a house out of the pool, replace it with nothing, profit. There's one less house in the pool, and you will never give that house up.

Combining right to buy with new builds equitably increases the social housing supply. The social housing pool increases each time a house is bought, people get to invest in a property, and the stock of housing is generationally renewed.

They are very different policies, as long as you build for every property bought.

I can

Mark Wadsworth said...

B, got it in one.

W, you make several mistakes here:

1. They won't build any new council houses anyway.

2. Selling a council house at a discount is still a loss to the taxpayer. They could, instead, sell off council houses at full value and build TWO new council houses for each one sold.

3. If they want to build new council houses (which they don't) there is no need to sell off existing ones at a loss to the taxpayer first.

4. Even if they did build a new one for each one sold, what is the point of that? Why not just keep the ones they've got and allow more housing to be built? That doesn't cost the taxpayer anything.

5. "people get to invest in a property" That is exactly the kind of thinking that got this country into the mess it's in.