Friday 31 July 2009

They're missing the obvious solution

AC1 draws my attention to an article in The Times on the topic of illegal sub-letting of council housing. Let's take these numbers at face value:

In parts of Westminster council, for example, the rent for a three-bedroom council house would be £114 a week. But the market rent for the same or similar property would be as much as £550 a week, netting the sub-letter £22,672 a year.

And what's their inevitable solution ..?

Some sort of 'crackdown', of course, and "Once fraudsters are identified, tenants in homes that have been sub-let will be evicted after a court order. The illegal tenants would be rehoused only if they would have been eligible for council housing anyway. But tenants who have abused the system by sub-letting property would lose their right to a council home and have to pay back any rent owed."

This ain't going to work, of course, why would it?

So, how about the free-market solution? All Westminster Council has to do is offer an amnesty to those people who are paying £550 a week and offer to allow them to continue in occupation at a modest discount to market value, let's say £500 a week, on condition that they report their erstwhile landlords.

HMRC can collect income tax on the illegal landlord's £22,672 profits for each of the past few years. Westminster Council can then (hopefully) reclaim all the rent the illegal landlords have been collecting privately,. DWP can go after them for all the Housing and Council Tax Benefit that the illegal landlords have been claiming - and if these 'agencies' co-ordinate their attacks, they might end up with a more than 100% reimbursement.

In future, Westminster Council will be getting £500 a week rent from all these flats (which over time they can bump up to £550, of course), rather than just £114, so they've got more money to spend on other stuff, like building more social housing, if necessary.

What can possibly go wrong?

12 comments:

Anonymous said...

Good idea. In this model, the cheeky landlords ought to be deemed to have made themselves homeless and thus be ineligible for state housing.

Witterings from Witney said...

"What can possibly go wrong?"

The entry of bureaucrats and lawyers!

Tim Almond said...

"There is no place for those who want to profit from their tenancies"

But if you let people rent a council house for a peppercorn rent in a highly sought after area, that's what's going to happen.

It's stupid to have any council housing in somewhere like Westminster. If you're doing a low paid job there, you should be moved out to somewhere south of the river. It's only 10 minutes by tube.

AntiCitizenOne said...

OT

http://news.bbc.co.uk/1/hi/england/wiltshire/8178347.stm

Is Brake a Fake?

James Higham said...

Sounds reasonable to me on first reading.

Mark Wadsworth said...

JB, OC, JH, thanks.

WFW, lawyers and bureaucrats only get involved on the debt recovery side (which may or not be worthwhile pursuing). The actual tenants meanwhile just pay market rent (minus the upfront discount).

Anonymous said...

Mark,

I see that it wasn't just after the Norwich by election, that the BBC totally ignored U.K.I.P.

As you can clearly see by THIS LINK they did it before hand as well.

AntiCitizenOne said...

It's obvious that ALBBC have given up on Labour and gone for the Hard Left greens as their New Hope (TM)

Mark Wadsworth said...

D&C, that's typical, isn't it? Any survey that doesn't include UKIP, Greens and BNP as options (or SNP, Plaid, UUP, DUP or Sinn Fein, as appropriate) just isn't a proper survey any more.

Lola said...

Or to put it another way - social housing = uneconomic housing. Just why is the council owning and renting housing at all? Would it be better to priavtise all the council housing and then get it let at an economic rent?

Mark Wadsworth said...

L, if they sold off the council housing, they'd just squander the proceeds. As long as they are renting it out (whether for market value or subsidised) then the council is under some pressure to keep the area attractive, or that source of income dries up.

It's a bit like land value tax. Well it is land value tax, I suppose, if you assume that LVT and rent is the same thing.

Anonymous said...

So it is only MPs who are allowed to claim to live in one place when living in another while the taxpayers pick up the bill? no sympathy for the fraudsters but look at the example of our MPs, I am surprised they dare even mention this.