I own land! Give me money!

Spotted by Lola in The Birmingham Mail:

Bailiffs have entered into Birmingham’s historic Council House to claim goods and settle an unpaid city council debt.

Two High Court enforcement officers are understood to be going around the building’s back offices taking stock of items they might be able to seize to settle the bill in scenes reminiscent of TV show Can’t Pay We’ll Take It Away. It has been branded a ‘farcical’ situation for Europe’s largest local authority to have failed to settle a bill to the extent that it is now on the receiving end of a court enforcement order. The council is disputing the debt.

Hmm. And what was the nature of the original claim..?

According to council sources the issue surrounded a private landlord chasing unpaid rent from a private tenant whose housing benefit, issued by the city council, had been stopped.

So how are those rent rises working out then?

When Obsborne increased SDLT rates by 3% for all purchasers except owner-occupiers from 1 April and then announced that higher rate income tax relief for landlords' mortgage interest would be phased out over three years, starting 1 April 2017, all the usual Homey lobby groups insisted that "landlords will just increase their rents".

Logic tells us that if anything, these measures will push down prices and rents slightly, although it is always difficult to disentangle this from other influences.

From today's City AM:

Rent increases for tenants across the UK have fallen to their lowest since 2013, new figures have shown, with prices in London dropping for the ninth month in a row.

Rents rose just one per cent to £1,190 in the year to February, the lowest rise since April 2013, figures from Landbay showed. In the capital, rents fell 0.5 per cent, although they were still as high as £1,882...

The lobbyists are keeping up the pressure though:

And a study by the Royal Institution of Chartered Surveyors (RICS) published last week suggested rents in the UK could rise by a fifth over the next five years, although tenants in the capital will be faced with a rise of 15 per cent.

Here's a fun bit from the linked article:

The research suggested a third of its respondents believed those on lower incomes are being pushed out of the private rental market, while 29 per cent blamed caps on housing benefits. Just over half of landlords it surveyed said they'd be prepared to rent properties to households receiving housing benefit if help was provided through central government which provided financial guarantees for both deposits and rent.

“We see this as a matter of public interest," said RICS chief executive Sean Tompkins.

"The housing market is falling increasingly out of step with the majority of household incomes. In the current climate, it can be hard enough for young professionals to make ends meet. But for those on benefits, the pressures may be insurmountable.

"Worryingly our figures show that as a result of a combination of economic pressures, more and more vulnerable tenants are being pushed out of the private rented sector. However, if government were to put in place additional support measures through the introduction of help to rent schemes, the door to the rental market may once again be opened for Britain’s most vulnerable.”

The utter, utter money grubbing shits.

Assuming landlords refuse to take housing benefit tenants any more, what will they do with the now vacant homes? Sell them to better of FTBs presumably. Supply then dwindles until landlords end up with the stark choice - rent them out to lower earners for lower rents or sell them etc, taxpayers save money on housing benefit subsidies. Win-win-win.

They own land! Give them money!

From The Evening Standard:

Housing benefit would be increased for tens of thousands of people in London under Liberal Democrat proposals.

Lib-Dems are proposing to link local housing allowance, which private renters on housing benefit can receive, to average rents locally "so that the benefit reflects the actual cost of renting. LHA is currently capped and linked to the lowest rental costs in an area.

This would mean huge rises in housing benefit for many people who live in high-rent areas such as Westminster, Chelsea, Kensington, Fulham, Islington and Richmond.

The Lib-Dems estimate the housing benefit reform would cost about £3 billion a year by 2020-21.

Or more accurately:

Housing benefit would be increased for thousands of landlords in London under Liberal Democrat proposals.

Lib-Dems are proposing to link local housing allowance, which private landlords whose tenants are on housing benefit can receive, to average rents locally "so that the benefit maximises the value they can extract from society". LHA is currently capped and linked to the lowest rental costs in an area.

This would mean huge rises in housing benefit receipts for those who own several homes in high-rent areas such as Westminster, Chelsea, Kensington, Fulham, Islington and Richmond.

The Lib-Dems estimate the housing benefit reform would benefit the Duke of Westminster by about £3 billion a year by 2020-21.

Half the truth = a complete lie

From City AM:

Research conducted for the Residential Landlords Association (RLA) has also shown that each tenancy in the private sector nets the Treasury in the region of £1,000. Buy-to-let, far from enjoying a privileged status within the housing market, is a net contributor to the government’s coffers.

Yes, I have also calculated this figure as best I could and private landlords appear to be paying about £5 billion a year in income tax and other bits and pieces, = 5 million rented homes x £1,000 each.

That's half the truth. And a complete lie...

The bit he doesn't mention is that private landlords collect £9 or £10 billion in Housing Benefit every year, which is a drain on 'the government's coffers'.

Net the two figures off, and overall we see that private landlords are a drain on 'the government's coffers' of £4 or £5 billion a year.

That's the whole truth.

Listen from about 19 minutes in...

Here

Comments in the comments - should be fun.

MW adds: or read the related article here.

Compare and contrast, make your mind up.

From the BBC:

More than a million pensioners are still living in poverty, partly due to their failure to claim benefits, the charity Age UK has claimed...

The report found that:

* 1.6m pensioners are missing out on Pension Credit, worth £33 a week
* 2.2m pensioners are missing out on Council Tax Benefit, worth an average £728 a year
* 390,000 pensioners could have claimed Housing Benefit, worth £48 a week

Age UK said that many people do not know that they are entitled to the extra income. Others feel too proud or embarrassed to claim...

The DWP said that people can claim housing benefit and pension credit in just one free phone call on 0800 99 1234, without the need for a signed form.

Also from the BBC:

The government has been criticised for not increasing its efforts to tackle housing benefit fraud "sooner".

The National Audit Office said overpayments due to fraud and error had risen from £980m to almost £1.4bn between 2010-11 and 2013-14.

It added that the Department for Work and Pensions faced an "escalating problem", accepting that housing benefit was "difficult" to administer.

Fun Online Polls: Private landlords & Alcohol health warnings

The responses to last week's Fun Online Poll were as follows:

Which statement is correct: Private landlords in the UK…

… pay more in income tax than they receive in Housing Benefit - 17%
… receive more in Housing Benefit than than they pay in income tax - 83%

So most of you got it right.

There is no official figure for income tax paid on rental income. HMRC's Table 3.4 says that total income tax paid on "Property, interest, dividend and other income" was £10.8 billion in 2011-12, I can't find a more up to date figure. Let's assume half of that is on rental income = £5.4 billion. If you do a fair guesstimate of what they would be paying assuming the usual deductions and exemptions, the tax would be about £6 - £7 billion a year.

So let's call it £6 billion for sake of argument.

The figure for Housing Benefit paid to private sector landlords is more reliable. According to the DWP, in 2012-13 there are about 1.7 million claimants in the private rented sector receiving an average of £105 a week each = £9.1 billion a year.

John says: "The tax regime in this country allows setting buy to let mortgage against tax bill stupid not to."

Yes, there is a pretence that rental income is normal earned income, so you can deduct interest paid from taxable rental income. But then again, rental income is treated as unearned income for National Insurance purposes, i.e. there isn't any. So that's a win-win.

Proper earned income is liable to NIC; and interest is not an allowable deduction against investment income (except in certain very narrow circumstances, which are quite reasonable).
-----------------------------------
The bansturbators are having another field day:

Health warnings on alcoholic drinks should be introduced to combat problem drinking, a parliamentary group says.

The All-Party Parliamentary Group on Alcohol Misuse said labels should warn about the harmful effects of drinking.

So that's this week's Fun Online Poll.

Vote here or use the widget in the sidebar.

Fun Online Polls: Private landlords

I was doing some more research taxes and subsidies in the UK housing market and stumbled across another interesting statistic.

See if you can guess using the widget in the sidebar.

"Revealed: How landlords receive more in benefits than someone with a salary of £85,000"

From The Daily Mail:

Britain's top 'private sector' landlords were paid on average more in handouts than someone earning over £85,000, it can be revealed.

Average Housing Benefit payments to some landlords were worth on average more than £1,100-a-week before a cap on payments was introduced.

Work and Pensions Secretary Iain Duncan Smith said he was determined to end the 'ludicrous situation' where Housing benefit recipients - many of whom acquired ex-council houses at undervalue under the Right To Buy scheme - had a higher income than the average wage of someone who goes out to work and pays the taxes to subsidise them.

The Housing Benefit cap is now set at around £200-a-week, or £10,000-a-year - chosen by ministers because it is close to the average pre-tax wage of someone in a Minimum Wage job.

More than 42,000 landlords have seen their Housing Benefit payments cut since the cap came into force in April last year. Until now the Department for Work and Pensions had only said that 96 landlords had been receiving more than £900-a-week.

Universal Credit and "making work pay" ....

One of the key advantages of the new scheme is that it removes the confusing overlaps between tax credits and housing benefit, which currently mean that working households can suffer high loses in net income if their wages increase. Under the present system the loss can be as high as 96p of every £1 increase in gross earnings. By combining credits and benefits, universal credit aims to ensure that working households keep at least 20p of every extra pound they earn. 

so, applying the “government spokesperson” best gloss a “fivefold improvement”; but .. 

The government has watered down the benefits to be gained from these changes by leaving council tax benefit out of the new system, so that working families whose earnings increase will still face the vicissitudes of whatever mechanisms for withdrawing council tax support apply where they live. But the majority of working families will be better off – indeed, the government's own assessment reckons that two-thirds of working families with children will benefit, against only 18% who will lose out.

I own land, give me money!

Emailed in by MBK from The Sunday Times:

A LANDLORD has collected taxpayer-funded rents of £3,550 a week by letting out two modest former council properties.

James Wiemer, 56, rented two three-bedroom properties in central London to two families — one with five children, the other with six. In one case he converted the property into five bedrooms and, in doing so, made it potentially eligible for housing allowance payments of up to £1,800 a week.

Wiemer, 56, who has received total rents of almost £400,000 in just over three years, has now joined the two families in a legal attempt to retain extra payments after the government imposed a £400-a-week cap.

"The Bedroom Tax" war of waffle

Polly Toynbee in The Guardian kicks off the festival of f-wittery with this:

Mass evictions (1) of the most vulnerable are no way to tackle the housing benefit bill,(2) and we must do all we can to stop them... One distraught woman who is paid a carer's allowance for looking after her severely mentally ill brother (along with her own three children), said she would have to leave him to social services: his room would now be counted as "spare" because a brother doesn't count as family."(3)

1) There won't be "mass evictions", the Tory policy, as ill-judged as it might be does superficially have the reasonable aim to optimise use of existing council housing. So in theory at least, some council tenants will trade up and some will trade down; they will swap places. So this might be part of the answer, but the Tories are - maliciously and deliberately - overlooking the fact that there is no natural limit to the amount of social housing; the fact that there is so little of it is a purely political decision, it's basic Home-Owner-Ism.

2) The total cost of Housing Benefit for social tenants is precisely £ zero. The council/Housing Association (collectively referred to as "RSL") demands a made-up figure for rent which some tenants can't afford and then it gives them an equal and opposite amount in Housing Benefit. It's about as daft as me charging my kids £100 a week rent each and then giving them £100 each pocket money to help them pay the rent. So what the policy boils down to is making those people who currently live for free paying a little bit back into the system.

3) Shroud waving. Ignore. She says later on that the extra charge per "spare" bedroom will be £14 a week; don't disabled people get given extra money, why can't the £14 come out of that? It doesn't seem like an unreasonable amount to me.

She veers a bit closer to the real issue here, but then deftly veers away again:

The cuts that make most noise are those deliberately devised as eyecatching political crowd-pleasers, yet often saving small sums. Exploiting one-off anecdotes about benefit "scroungers" in high-rent Kensington palaces may have worked as a clever cover,(4) but the truth about the imminent bedroom tax is starting to emerge.

Well over a third of social housing tenants have a "spare" room and must pay an average £14 a week more – £700 a year – or move out. That's 20% of unemployment pay.(5) The north is harder hit as its social housing, on cheaper land, has more bedrooms: in Hull 4,700 families are "over-occupiers", with only 73 one-bed flats to move to. In Brighton a thousand families are hit,(6) as the council expects to lose £1m in rent arrears.

4) Spot on. Any sane person is against the cash subsidies for private landlords of £8 billion a year, although the Homey ire is directed at the tenant not the landlord, they then direct that anger against social housing generally. The hatred which the Home-Owner-Ists have towards social housing is unfathomable to me:

Claim #1: "It't not fair that the undeserving poor get to live somewhere for very cheap or for free." Subtext: I have to work hard and pay a shed load in tax and then pay rent or mortgage out of my own income.

Fair enough, so I counter this with: "We've plenty of land to build more social housing on; as long as the RSL is getting more than £80 a week in rent, then it has covered its costs; anything more than that and it is into profit, which is great - it's like Land Value Tax. Then everybody who wants no truck with 'the property ladder' can have a council house with low rent and a secure tenancy."

Claim #2: "But I don't want to live on a council estate, they are full of low-lifes. Do you not remember the horrible tower blocks from the 1960s?"

Rational response: "Well nobody says you have to live in one. You can stay where you are now if you're happy with that, and if you are renting privately, then by and large, your rent will go down a bit, win-win! The fact that other people send their children to state school doesn't stop anybody sending their children to a private school, does it?

"Further, there is let's assume a fixed number of low-lifes, one per cent of the population. If there is only enough social housing for twenty per cent of the population, then one-in-twenty people on a council estate is a low-life, which is such a high concentration as to drag the whole estate down. If everybody - including the vast majority of people who are perfectly decent neighbours lived in a council house, then a) that does not increase the number of low-lifes, it spreads them more thinly and b) the sensible policy is to try and corral the one-per cent incorrigible low-lifes into sink estates at the edge of town (effectively open prisons) which means the everybody else can live on nicer estates among nice people."

5) I really don't think that being asked to pay a small minimum is unreasonable. Price rationing is the best form of rationing. If the residents concerned are really that poor, living off welfare, maybe £14 is too high. The whole idea of working out who has a "spare bedroom" is a nonsense on stilts anyway, it's a bureaucratic nightmare and, unlike LVT assessments, really would involve "inspectors entering people's homes".

It would be far cleverer to just charge a minimum rent of £x per week per room and to dock that straight from people's benefit payments, forget about Housing Benefit. Maybe a charge of £5 per room is enough to achieve the desired right-sizing and home-swapping (if that is all you wish to achieve, rather than a bash-the-poor crusade). So some people (larger households with some earned income in smaller homes) would end up a bit better off; and other people (smaller households with no earned income in larger homes) would end up a bit worse off; the two households just have to swap places.

6) This is a land value thing. Hull is a far less desirable area than Brighton, so private rents are much higher in Brighton, so there are only 9,700 people on the waiting list for social housing in Hull and 16,000 in Brighton, and it appears that even these indirect market force means that social housing in Brighton is more efficiently allocated.

Per capita population, that's one-in-twenty-six in Hull one-in-fifteen in Brighton and in London of course it's one in ten (plus an unknown number who never even bother putting their name down because they know it is hopeless).

So it is important to look at this on a national rather than local level, so the charge per room ought to be £3 per room in Hull, £5 in Brighton and £10 in London (or whatever). Again, a bit like Land Value Tax.

And then in the comments there's the usual mix of leftie drivel, shroud waving and Home-Owner-Ist crap which I can't be bothered rebutting again, i.e.
a) blame the immigrants, or blame Labour who allowed them in.
b) social housing should be for a narrowly defined category of people - the hard-working poor. If people earn nothing they don't deserve a home; and people who have done all right for themselves (Bob Crow, Frank Dobson) don't deserve it either.
c) A lot of people are labouring under the delusion that there is a fixed or limited amount of social housing, there isn't. That's like saying "there is a fixed number of ring-tones for mobile phones" or "there is a fixed number of television sets".
d) If you don't want to pay the Bedroom Tax, then buy your own house.

Let the gravy train take the strain!

Emailed in by Lola, from Mortgage Solutions:

Chris Norris, head of policy at the National Landlords Association, gives an insight into landlords' concerns over Universal Credit...

"If the government wants to see the private-rented sector continue to take the strain of housing welfare recipients there are a number of issues which must be addressed to ensure that investment is viable and we do not see the development of an exploitative sub-prime market.

The NLA hopes that the government will respond to our requests to guarantee regular rental payments to landlords if a tenant defaults after two months and to ensure Universal Credit is linked in market rents before its rollout. The NLA also asks that mortgage providers look to lend to landlords of all tenants, irrespective of where they derive their income."

Economic Myths: Social housing in the UK is subsidised by the taxpayer

I always find it useful to look at the bigger picture and compare like with like.

Using data culled from various government sources, I have allocated government revenues from land, housing and wealth generally to households by tenure type. Some of the allocations are a bit arbitrary and you have to take into account that there are two layers of tax in the private rented non-claimant sector - taxes paid by tenants and taxes paid by landlords. Benefit spending is easier to allocate (having deducted about £2 billion Housing & Council Tax Benefit lost to fraud and error).

First, let's compare the cost to the taxpayer of claimants in the private rented sector with the overall cost of social housing. As we see, social housing is a break even; the rents paid by the one-third of tenants who are not claiming HB or CTB covers the full cost. The rent and Council Tax nominally demanded from claimant households is meaningless as it is equal and opposite to the HB and CTB nominally paid out. By and large, this is a purely paper exercise. It's like me giving my children £20 a week pocket money and also charging them £20 a week rent.

On the other hand, the cost to the taxpayer of paying for claimants in the private rented sector is enormous. The government spends more money on these 1.2 million households than it spends on 3.0 million claimants in social housing:


Secondly, we note that paying tenants in social housing pay about twice as much in tax (counting everything you pay to the government over and above the cost of services provided in return as tax) as owner-occupier households. They are not subsidised by the taxpayer; they are the ones effectively paying for the social housing for the other 3.0 million, and they don't get any tasty tax-free capital gains, interest rate subsidies and so on.


Thirdly, there is only one group here who is really losing out.

The 4.2 million households who are living rent free have nothing to complain about. Paying tenants in social housing have affordable rents and security of tenure, so they are doing OK. Owner-occupier households are only paying half as much tax as paying tenants in social housing, plus they are getting five times as much back in direct and indirect subsidies (interest rate subsidies, tax-free capital gains, no tax on rental values etc), so they are doing much better.

The ones who are being shafted are paying tenants in the private rented sector, on top of the £2,000 in housing and wealth taxes they pay each year, they pay on average £8,000 a year in rent, which exceeds the costs of providing that accommodation by £5,000 a year - so they are paying directly in cash for their landlords to scoop up £5,000 of national wealth each year for nothing in return.

Finally, the Homeys then wail about paying tenants in the social sector paying "below market rents". What the Homeys really mean is that these tenants shouldn't just pay for the bricks and mortar running costs (which they are clearly paying two or three times over), but they should also pay for the "location rent" on top of that. But when invited to do the same (i.e. to pay LVT on their own homes instead of paying taxes on their earned income), the Homeys politely decline.

Another important Home-Owner-Ist milestone!

From the DCLG's English Housing Survey 2011-12:

1.3 Owner occupation remained the largest tenure group with 14.4 million households, comprising around two-thirds (65%) of all households. There has been a downward trend in the proportion of owner occupiers since the peak of 71% in 2003 but the proportion in 2011/12 was very similar to that in 2010-11, Figure 1.

1.4 As Figure 1 shows, the difference between the number of social renters and private renters, which was over 3 million in 1980, has been narrowing steadily. The numbers and proportion of households living in the private rented sector have been rising in recent years, and in 2011-12 were at the same level as in the social sector, 3.8 million households or 17% of the total...

• Average weekly rents in the private rented sector continued to be well above those in the social rented sector (£164 per week compared with £83). While mean rents have increased in both sectors since 2008-09, private rented sector rents showed no significant change from 2010-11.

• Almost two-thirds (64%) of households in the social rented sector were in receipt of Housing Benefit, compared with around a quarter (26%) of those in the private rented sector.

I think that is a pretty significant achievement, to have more people renting privately than from the council or a Housing Association. The bonus is that the percentage of owner-occupiers is back to 1987 levels (the highest level was 71% in 2003). So Home-Owner-Ism is achieving its underlying and understated aim of concentrating land ownership in ever fewer hands, especially if you include banks' indirect land ownership via mortgages.
------------------------------------
Let's crunch some numbers:

We know that "Housing Benefit" is slightly over £21 billion a year; let's knock off 14% to get the England-only figure = over £18 billion, and let's assume for sake of argument that it is an all or nothing benefit.

Therefore: 2.4 million social sector tenants are "receiving" HB of £4,300 per year = £10 billion; and 1.0 million "private sector" tenants are "receiving" HB of £8,500 per year = £8.5 billion. £10 billion + £8.5 billion = £18.5 billion, looks about right.

Why all the "speech marks", you may ask?

I always find it useful to look at things from the point of view of the taxpayer, in cash terms.

a) The £10 billion which the DWP pays to local councils to subsidise rents goes into the tin for rent receipts, and rather bizarrely, that is all pooled nationally and paid back to Whitehall, whence it is dished out again to local councils... So it is all pure bookkeeping entries, it does not affect the cash amount of tax you pay; they could eliminate all these transfers to and fro by simply reducing social rents to what people are willing and able to pay (i.e. the market rent), which would average out at £1,500 a year or something (£4,300 x 36%). This could easily be collected 100% by docking it from people's welfare or pensions payments.

b) The £8.5 billion paid to private tenants actually ends up in the pockets of private landlords, that is a real cost to the taxpayer and also pushes up the rents which the 74% of non-claimants have to pay. For consistency, the average real market rent is 74% x £8,500 = £6,300 a year.

In other words, if the UK government had continued with its policy of building social housing from the late 1970s onwards instead of selling them off, the taxpayer would be saving £8.5 billion a year in Housing Benefit; and those people who are now private tenants would be paying lower average rents and the government would be receiving about £24 billion a year in rental income.

The taxpayer would be £32 billion a year better off (private tenants would benefit from lower taxes and from lower rents). And the economy would be better off, because what what isn't taken in taxes on earnings, rent or mortgage interest is spent on goods and services. And don't give me that crap about landlords spending their income on goods and services; the point is that they are consuming them without producing or providing any; so 'everybody else' has to make do with a smaller share of a smaller total amount.

What's not to like?

Polishing a turd

Bob E brings us an update on how the Blue & Red Wings of The Daily Mail party are competing to see who can be 'tougher on welfare scroungers'. From The Guardian:

The government's welfare reform minister has suggested lone parents, sickness claimants and other people on benefits are too comfortable not having to work for their income, saying they are able to "have a lifestyle" on the state...

"The incapacity benefits[sic], the lone parents, the people who are self-employed for year after year and only earn hundreds of pounds or a few thousand pounds, the people waiting for their work ability assessment then not going to it – all kinds of areas where people are able to have a lifestyle off benefits and actually off conditionality," the Conservative peer said...

But what is this - could it be a turd attacking a turd? It is!

Liam Byrne, the shadow work and pensions secretary, said: "The nasty party is well and truly back. This government has comprehensively failed to get Britain back to work and frankly it's a disgrace that ministers now choose to kick people when they are down rather than even pretend to offer a helping hand."

Suffering from Short Memory Syndrome again, is our Liam, it seems ... someone ask him who first gave this person, sorry nasty person, a platform to have his nasty views translated into government policy? I wonder if that Beeb hagiography from 2009 gives us any clues..?

Sir David was hired by ex-Prime Minister Tony Blair to draw up a review of the welfare system, and in 2007 proposed opening up the system to the private sector as well as requiring lone parents to seek work earlier.

His suggestions were initially shelved amid reports of opposition from Gordon Brown, but he was hired again by Work and Pensions Secretary James Purnell in 2008 to work on a welfare green paper. That paper called for measures to get more disabled people and lone parents into work, and was backed by the Conservatives while outraging many on the Labour left.

In response, the Tories promised a "full-blooded version" of Sir David's proposals, and criticised the government's implementation of them as "half-hearted". Should the party form the next government, Sir David will now be in an even stronger position to make sure they are true to their word.
-------------------------------
It's also worth noting at this stage how these myths create themselves. The Tories originally proposed - quite sensibly to my mind - to cap Housing Benefit at a very generous £400 per household per week, this then turned into a general cap of £500 on all benefits.

Clearly, short of outright fraud, no workless household receives anywhere near £500 a week in cash benefits*, so they then declared that Housing Benefit would be capped at £500 minus cash benefits received, which also seems more than fair. The landowners squealed at this loss of lovely subsidies. The Guardianistas were waving shrouds at the tops of their voices. My view was if a simple policy proposal like that can simultaneously piss off two groups of rent seekers, it's got to be a good thing.

So far so good, but there now appears to be a general assumption that all welfare claimants receive more than £500 a week in benefits, see e.g. Metro Reader's letters (21 November 2012, pages 14-15), which is quite simply not true. I quote:

I find it immoral that someone who chooses to drop out of school at the age of 16 and spend the rest of their days being looked after by the state can have £500 a week handed to them, while another young person who decides to stay on in education and go to college or university while holding down a part-time job, is lucky if they can make more than £400 a week.

While I have every sympathy with people who do the right thing (scrapping taxes on income and having universal benefits would help them enormously), the proverbial 16-year old school leaver is "entitled to" Employment and Support Allowance of £56.25 a week, a nice cosy place on a housing waiting list and all manner of grief and hassle.

* Entitledto tells us that e.g. an unemployed couple with three kids gets £111 Income Support, £165 Child Tax Credits and £47 Child Benefit per week = £323 per week. That leaves £177 a week for rent, £770 a month, which happens to be slightly more than the overall average rent paid for private housing in the UK.

"PRS landlords ready to collect Housing Benefit"

From Inside Housing:

The vast majority of private sector landlords are ready and willing to snap up currently empty social housing at undervalue and allow the taxpayer to reimburse their costs via Housing Benefit, according to a new survey.

A survey of 114 members of the Residential Landlords Association has revealed that 82 per cent would be prepared to purchase empty social homes if they were put up for sale at large discounts. There are almost 75,000 social homes currently lying empty across England.

Alan Ward, chair of the RLA, said: "With the country facing such a housing supply crisis, it is a national disgrace that so many landlords are seeking access to public funds whilst families across the country struggle to access suitable accommodation and at a price that they can afford. But hey, that's their problem.

"Landlords are chomping at the bit to be able to do what they are good at, namely recycling taxpayers' money, boosting their incomes and playing an important part in sucking wealth out of often deprived and run-down areas. Ministers should urge local authorities and housing associations to ensure all empty properties can be put up for auction to enable Housing Benefit to be collected more quickly."

The RLA suggested that a one-year deadline should be imposed on the local councils to give away empty homes and to turn on the Housing Benefit tap.

Another nice little Home-Owner-Ist time bomb for future generations to sort out...

From CityAM:

LOWER rates of home ownership are set to cost the government an extra £8bn a year in housing benefit, a think-tank said this morning.

Once today's generation of renters retire, there will be 3.45m pensioners claiming housing benefit by 2060, the Strategic Society Centre (SSC) has calculated. In today's prices, these claimants will cost the state £13.45bn a year – around two and a half times the size of the current £5.32bn bill for housing benefit...

And thus the cycle of debt, rent and taxes is perpetuated. Today's workers are forced to pay inflated rents because of Housing Benefit as well as the higher taxes to fund that Housing Benefit; landlords just collect the Housing Benefit, that's their pension, innit?

But one man's pension is another man's poverty. With more retired tenants in future, the Housing Benefit bill and hence the taxes to pay it will be even higher, so future workers will also be forced to pay higher rents and will then end up claiming Housing Benefit themselves when they retire, landing the generation after that with even higher taxes and rents until one day a handful of people own all the land and collect all the rents, as well as a goodly chunk of tax revenues via the system of land subsidies (Housing Benefit, CAP payments etc).

Which is what some people refer to as "Feudalism".

They own land! Give them money!

From the summary of The Joseph Rowntree Foundation's report "Housing options and solutions for young people in 2020"

Key points

• Around 1.5 million more young people aged 18–30 will be pushed towards living in the private rented sector in 2020, reflecting growing problems of accessing both home ownership and social renting.
• Without a sustained and long-term increase in new housing supply, demand-side initiatives to help aspiring home-owners risk maintaining the inflated house prices they are meant to overcome...
• More stable private rented tenancies might be achieved through smarter incentives for landlords. International evidence suggests that these could include tax breaks in return for more stable, longer term tenancies for vulnerable or lower income tenants and/or other benefits such as lower rent levels.

OK:

1. Mr Joseph Rowntree set up his foundation to look into the causes of poverty, and in his original instructions of 1904, he wrote: "The Soup Kitchen in York never has difficulty in obtaining adequate financial aid, but an enquiry into the extent and causes of poverty would enlist little support. Every Social writer knows the supreme importance of questions connected with the holding and taxation of land, but for one person who attempts to master this question there are probably thousands who devote their time and strength to relieving poverty and its accompanying evils." Bit of a cluebat there, eh?

2. In the second bullet point, the report acknowledges that "demand-side intitiatives" (i.e. subsidies) will just push up rents.

3. So why do they then suggest tax-breaks for landlords? Assuming a rational landlord, the value of the tax break would have to be roughly equal to the rental income foregone. Ergo, this would end up much the same as Housing Benefit, a "demand-side initiative" which merely pushes up rents. Every £1 which a claimant ends up in the landlord's pocket and results in all non-claimants having to pay £1 more for what's left (or paying £1 more in tax, or possibly both). It's a vicious circle.

4. Now, there's an easy way to break the vicious circle: imagine that we had Housing Benefit but made it universal (so that it doesn't just result in transfers from non-claimants to claimants/landlords) so that everybody always has enough money to be able to rent at least somwhere basic, and instead of funding that universal HB out of income tax, we fund it out of a tax on land values..? It's hardly a new idea, something along these lines was enacted under Queen Elizabeth... The First.

"Thatcherite think-tank slams Housing Benefit cap plan"

From The Evening Standard:

Millions of Londoners in family homes would be unfairly penalised if George Osborne brings in a £400-a-week cap on Housing Benefit in this month’s Budget, a report claimed.

In a hard-hitting report, the Centre for Policy Studies (CPS), Margaret Thatcher’s favourite think tank, said widows, savers and people with large families would be losers under the policy. It said some three in ten households affected had been claiming Housing Benefit for family homes in London for a decade or more, opening up the claimants to the threat of deductions from their other benefit income based more on rising rental values than how well off they are.

“This strikes at the heart of the importance of aspiration and of property ownership,” said CPS director Tim Knox.

Warning that very wealthy landlords could sell their homes in the capital while breadwinners on relatively modest incomes would lose out, he added: “A Housing Benefit cap based on market rents is therefore a discouragement to aspiration. The probable result: brain drain and capital flight.”