From The Metro:
‘Privileged’ residents on salaries of between £60,000 and £100,000 will be targeted as housing minister Grant Shapps reforms the ‘lazy’ attitude on social housing.
He said: "For far too long, millions of people on waiting lists have watched helplessly as high-earning social tenants continue to occupy homes designed to help the most vulnerable. These high-income tenants are not only blocking homes that could benefit those in greater housing need, they’re also relying on poorer taxpayers to subsidise their lifestyle."
The average subsidy for such tenants is worth £3,600 a year, the Department of Communities and Local Government says. Mr Shapps added: "If they want to continue using this precious national resource, they will pay for the privilege."
Deiying
30 minutes ago
16 comments:
i.e buy out or get out.
We can't have people renting who can afford to buy, otherwise people might suspect that all tenants aren't either would-be home-owners or second-class citizens.
Sounds like lobbying from the Reniter classes worked.
Either get a mortgage or rent off someone with a mortgage.
This will be good for the economy because...
The Tories just love means-testing: keeps the Envious happy, provides jobs for bureaucrats andd snoopers and even saves a bit of money. Perhaps they ought to means-test MPs' allowances.
And there was I, thinking it was one of your parody articles. Oh dear.
This is bad, but i think means testing poor pensioners to qualify for bus passes, heating payouts, etc is worse. Why do we never hear that means testing hits the poor who have to negotiate bureaucratic form filling. Tories create more red tape than Labour. It's just different red tape.
How many people will have a look at the choices offered and simply reduce their earnings, e.g. go part time or have one member of the family quit their job? This is the rational choice if the marginal tax rate is more than 100%.
I can't see a single thing wrong with this.
Why the hell should my taxes subsidise people in social housing (meant for those unable to afford their own house) who are, in most instances, earning more than me?
B, SB, D, NH, M, thanks for comments.
JM, if somebody earns £60,000+, then the council rent they pay more than covers the cost of maintaining etc the council house they live in and the INCOME TAX + NIC + VAT etc they pay is about five times as much as the value of the non-cash benefit (the fact that they below market rent). Those taxes are, by and large, used to subsidise people who earn less than they do.
Or put it another way, just imagine that Mr £60,000 at Number 3 is still renting, but Mr £60,000 at Number 5 next door snapped up his house under right-to-buy for £10,000 or £20,000 a decade or two ago.
Why is the man at Number 3 a target for hatred and scorn, despite he has benefitted far less and paid far more - and will continue to pay far more for the rest of his working life, and the man at Number 5 is hailed as a canny investor who lived the Thatcherite dream?
"social housing (meant for those unable to afford their own house)"
I see you've fallen for the the HOist "renting is only for those unable to buy" propaganda.
You surprise me, JuliaM, I had you down as a sensible blogger, not one of the Envious.
"The average subsidy for such tenants is worth £3,600 a year"
I suspect this is complete bollocks and the £3,600 a year is the difference between the council house rent and the rent they would pay if renting privately, but that doesn't make it a subsidy. If the £60K tenant year moved out and an £10K a year one moved in, the council wouldn't be £3,600 a year better off, in fact no public money would be saved by such move. What if, by some miracle, our £60K tenant found somewhere to rent privately at the the same rent as he is paying now. In what way has anyone saved £3,600 a year, even though our tenant is no longer being "subsidised"?
B, being entirely fair, the £3,600 is the average non-cash benefit of not having to pay for the location value (the rent actually paid in cash covers the cash running costs of the bricks and mortar).
So yes, council house tenants (of whatever income level) are getting a £3,600 non-cash benefit - but then so are all home owners, including in particular those who did right-to-buy.
So by all means, let's make social tenants pay for the £3,600 average location value, but let's make all home owners pay for it as well - it's called LVT.
D, yes they set a base rent level,
1. but that is so much lower than "market rent" in most places that there are long queues for it, so people in the queue end up paying market rents, and that sets the real baseline for all other rents.
2. The market base rent is pushed upwards by Housing Benefit and artificial scarcity.
Council Housing is just a good sticking plaster for loads of other issues, it's a not-quite-perfect solution to lots of things, it's a crude sort of Georgism by the back door, it's dirt cheap for the taxpayer (if not actually free), and the more we have of it the better.
Plus, we'll need plenty of nice low-rent housing estates with easy access homes for all those Poor Widows forced out of their mansions :-)
Well said, Mark. It is complete bollocks. But even if it wasn't, the "subsidy" would still be justifiable on the following grounds.
Council houses are far more important than people think they are because they take the position of "least fertile land" when you apply Ricardo's Law of Rent to residential housing. In other words they set the base rent level for housing in areas which have ample council housing. And that sets the rent level for base BTL housing, which sets the rent level for nicer BTL, which (in combination with interest rates) sets the price level for base level owner occupier, which sets...
Well, you get the picture. There's a knock-on effect all the way up the housing ladder.
In areas where there is little or no council housing, the rent level of base BTL housing is instead set by the local income level and takes a higher proportion of people's income because it doesn't have any competition. So the first rung of the housing ladder is higher and therefore every other rung is too.
That's why we should all be unhappy when council house rents rise or council housing gets sold off. That £3,600 isn't just a subsidy to the immediate tenant. Indirectly it's a subsidy to everyone in the UK who is about to buy or rent a house in an area with council housing.
Sorry for messing up the commenting order. I just wanted to edit an ambiguous "it". and the only way to do it is edit and repost. Just wasn't fast enough.
As you say where there are long queues for council housing, market levels prevail. Of course that's why I differentiated between areas with ample CH and areas without.
"So yes, council house tenants (of whatever income level) are getting a £3,600 non-cash benefit"
But that still doesn't make it a subsidy. There is no way that the council, or the government, can save that £3,600. The tenant is £3,600 better off, but the taxpayer is not £3,600 worse off, some private landlord is £3,600 worse off.
Bayard, it's a non-cash benefit and therefore a non-cash subsidy, in £-s-d it costs the taxpayer nothing.
So the notion that taxpayers generally are subsidising these high earners is nonsense, and even if there were a cash subsidy, it would be the high earners clawing back a tiny bit of the actual cash subsidy they pay to everybody else.
A £20,000 earner in private rented is NOT subsidising a £100,000 earner in a council house; the £100,000 eaner in a council house is subsidising the £20,000 earner, or still subsiding a housing benefit claimant.
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