Gavin Rider's comments
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LHA is support for those on low income to help them cover the cost of their housing. It is means tested so not everyone gets it. It is paid to a landlord by the tenant in exactly the same way as a tenants's own money would be paid if he had earned it himself. It is not a taxpayer subsidy of the private rented housing market!
Mr Webb - LHA is not a "subsidy" of the private rental market!!! No wonder I have such difficulty understanding the points you make with thinking like that behind it.
Mr Webb - I do not assume that every post is about me.
I assumed you were commenting on my proposal for social housing repricing for several valid reasons:
a) I am the only one to put forward such a proposal in here
b) I am unaware of anyone else having a similar policy to change social housing to "market rent".
c) the housing market existed long before 1983, so I have no idea what you are talking about in that regard
d) you were not adequately descriptive about what you were referring to, so it was logical for me to think your comments were directed at my proposal because of a to c above.
As a homeowner, I have no idea what kind of tax advantage you think I am benefitting from.
You are referring to "supply" in terms of new housing construction, yet as I pointed out (and you have ignored) the "supply" in relation to this article is not about new construction, it is about turnover in the housing market, which the government is only able to influence through fiscal policies designed to encourage house moves.
Finally, if you don't want people to challenge your opinions or even to comment on them, don't express them in a public discussion forum.
You need to do better than that. WHY is it wrong?
Explain your thinking please.
Mr Webb - as for your little jibe at the end about market rents, I think perhaps you have not understood my approach (I assume you were talking about me, being the only one making such propositions in here that I am aware of).
Let me try to explain one more time.
The housing market exists and it will never go away. You cannot replace it, so you have to be able to work with it. The problem at the moment is that it works against those on lowest income and in favour of those with the highest income (as is generally the case with free markets).
The problem is amplified by trying to run a separate "market" in parallel with it, with restricted access and subsidy. (in this context, my definition of "subsidy" includes tax reliefs and other statutory instruments that are used to reduce the cost to the tenant or the landlord in just that sector of the "market").
Not only are there barriers for access to this artificially maintained market sector, once inside it there is a significant cost barrier working against anyone leaving it. That situation is contrary to what makes markets work.
My idea is to make the affordable housing market seamlessly integrate with the open housing market, and make it compete directly with it. This can only happen if the products on offer are priced at the local market rate.
Tenants on low incomes would be protected from any harm by having any difference in their rents made up by housing benefit. Tenants on higher incomes and not eligible for income related benefit would end up paying a true market rent for their housing, just like everyone else in the open market. That is fair.
BUT - because social landlords would still operate on a not-for-profit basis, the extra income from higher rents would go directly into the provision of new social housing. This would boost supply, with the money for doing so coming from the taxpayer AND from a small proportion of the higher-earning tenants.
With rental housing supply boosted in this way, social providers would eventually come to dominate the basic rental market and they would set the rents. As their cost base is likely to be lower than that of any private landlord and there is no profit element to be considered, the price set by social landlords will be lower than it would be in the open market in the absence of their participation.
Ultimately, social rented homes would be let for the basic cost of their provision and no more, which is the lowest price possible. Private landlords would be forced to compete either by charging even lower rents for similar property, or by offering a better product for higher rent. Both outcomes would be to the benefit of all tenants, in social or private rented housing.
Nothing in this would be detrimental to social housing tenants at all. Nothing in this would be to the advantage of private landlords.
Why are you so cynically critical of this proposal?
Mr Webb - I think some basics need remembering:
a) the government has no direct control over housing demand, it is based on confidence in the market and people's aspirations
b) "supply" in market terms (as is the subject of this article) is related to the supply of homes for sale, which is itself related to a).
c) only a small proportion of supply and demand in the UK housing market is related to new housing construction.
As far as the government has any control over c), this one has done more than any previous government to try and encourage house building. It has scrapped traditional planning and put in place the NPPF, with its presumption in favour of "sustainable development" - effectively a developer's charter. Nick Boles even wants to double the amount of land in the UK that is developed for housing.
So how on Earth do you reach your conclusion that "this is government policy, and has been since at least 1983."?
Roof' Less - yes, it is very easy to talk about building lots more social housing if you are not having to stump up the money in advance to pay for it.
That is Chris' favourite form of accounting practice.
MBPB - Your figures demonstrate that it is possible for social housing in some areas to eventually become self supporting.
When the public debt paid by the British Taxpayer has finally been paid off in another 28 years or so, you will indeed be able to say that social housing does not receive any subsidy.
Until that time, it is still being subsidised by the capital outlay that was financed by the general taxpayer, plus the net £23bn in additional subsidy paid into the HRA between 1997 and 2010.
Chris - you need to get your terminology straight.
Paying a business for a service it provides is not "subsidy".
I agree with what I think you mean, i.e. that it is not a constructive use of public money to be paying LHA to private landlords instead of using that money to build more social housing.
The problem with your statements though is that you obscure such sensible perspectives with completely unrealistic ones, such as claiming that there is no public subsidy of social housing.
I wonder if Derek has ever been to South Korea and seen how they deal with housing shortages there?
If you think our tower blocks were unappealing places for people to live, take a look at Seoul on Google Earth Street View. Then when you have that picture, scan south to Suwon and the other rapidly expanding towns (you won't see them in Street View but you will see the tower blocks from above).
That is not a place I would like to see being used as any kind of model for housing regeneration in the UK.