The great divide: Housing benefit cap, where do you stand?

DonDaddyD

There seems to be a huge socio-ethical divide happening, where do you reside:

Do you agree with the housing benefit reforms. Do you think it is right that the housing benefit should be capped and essentially only people who can afford to live in London should live in London?

Or

Do you think that it is wrong to effectively force people who couldn't normally afford to live in the Capital, to move out of it and likely into the suburbs? Do you believe this action will create 'Paris-like slum suburbs'?

wgwarburton

Hi,
I'd like to hold up this post as an excellent example of why this forum stands accused of London-bias.

Cheers,
W.

DonDaddyD

True,

I live in London though, I know there is a World outside of London but my perspective is likely to be London based.

You could simply change the word London to whatever back of beyond totem pole worshipping yokel village you hail from....

shm_uk

On the one hand, why should people be given more cash just so they can to live somewhere that they can't afford.

On the other hand, it's probably a bad idea to price people out of London. This just relocates the problem rather than solving anything.

On the surface it may look like it's saving the Govt X million pounds, but there'll probably be underlying knock-on effects that cancel this out.

It would be better to help develop these peoples employment prospects etc, so that they don't need to rely on benefits.

But of course, this takes time and effort, and is a long-term process. The Govt is looking for almost-instant results to save cash.

(PS: I am from the World Outside of London)

hatbeard

I often find myself wondering how people who work in low income roles like retail etc manage to live in london anyways so with these new changes what I used to think was tough before will prove impossible now.

I think that with the changes more people will have to move further away and then won't be able to afford to commute to work so will look for work in their new area but given the scale in which people are predicted to be displaced those jobs will be few and far between and quickly filled so people will struggle to find suitable jobs and end up unemployed

all the while central london will struggle to find people to fill it's low paid jobs and as a result prices for goods and services will have to rise in the capital to be able to encourage workers into the centre which in turn will make the cost of living in central london rise even higher and the divide will continue to widen as more and more people are no longer able to afford to live there.

gtvlusso

Well - My two pence;

Myself and Mrs Gtvlusso moved jobs and life from London to Bristol and "downsized" so that we could have more "disposable income". This has also afforded us a better standard of living.

I am not saying that this is for everyone, at all, but I think we will start to see more of a migration of London talent to more diverse locations.

My salary dropped by about 10% and my wifes salary by about 50%. But we can afford a nice big house and 3 juniors in a very good area of Bristol. Compared to a small flat in an "okay" area of London.

However, we were looking to sell up and move on in Bristol - but we do not have enough equity in our current pad for a deposit + stamp duty on the next pad without wrecking our savings and preventing juniors from university funds.....should they go to Uni.

Hence, I am looking to re-locate to Canada!

Not quite on the point, but I think this migration has already started.....Allot of friends have been talking about moving to the south-west for a couple of years. had enough of trying to live i London and silly commutes to work.

DDD - sorry dude, I have really not answered the posed question at all!

DonDaddyD

I'm torn:

On one hand I have friends on good money who cannot afford to rent in London, let alone buy.

On the other, I have some other friends are products of living in London due to housing benefits.

I consider myself very much a product of multicultural London, which thankfully made obsolete the 'class structure' IMO. I would hate to see the colorful elements of London's multiculture (by which I don't just mean ethnicity but the huge diversity of the city) destroyed by the housing cap.

CiB

<puts on hat labelled 'Economics for the economically challenged'>

We may see a short term blip in the number of people unable to live in subsidised housing in London & maybe elsewhere, but if the bottom falls out of the rental market then before too long rents will have to fall to compensate. I can't be alone in thinking that the reason rents are high is because landlords know that without an effective upper limit on housing costs they can get away with charging what they fancy. Remove state subsidy and see what happens. I know where my money would be.

<doffs cap in anticpation of huge round of applause at spotting this obvious and simple effect of market forces at work>

sicknewt

I definitely think we need a benefits cap - why should taxpayers fork out long term for non-taxpayers?

However, the cap should not be used to drive the people of London / Birmingham / Cardiff / Glasgow / wherever out of their homes, but alongside initiatives to get people back into work and earning.

Also, perhaps their needs to be some weighting so people in London (etc) get more money to pay higher rents?

asprilla

I don't know how anyone can afford to live in London, nevermind the unemployed or low paid.

gtvlusso

DonDaddyD wrote:

There seems to be a huge socio-ethical divide happening, where do you reside:

Do you agree with the housing benefit reforms. Do you think it is right that the housing benefit should be capped and essentially only people who can afford to live in London should live in London?

Or

Do you think that it is wrong to effectively force people who couldn't normally afford to live in the Capital, to move out of it and likely into the suburbs? Do you believe this action will create 'Paris-like slum suburbs'?

Do you get a cap even if you live with vermin in your home? ;-)

jzed

I'm torn on the issue. There are too many people who are takers out there. Happy to find whatever Government handouts are available and sponge off the rest of society. I call these the 'Parasites' and cutting their benefits and making them get of their backsides can only be encouraged.

At the same time there are others out there who claim Housing Benefit and create economic value for the city. A Housing benefit where you are encouraged to work and add value to your local community should be encouraged. No idea how it would be implemented but maybe some sort of assessment based upon National Insurance contributions or the like. You work hard, we'll help you live in the city, you don't work hard - tough.

TheStone

It makes no sense someone earning 30k will pay about 10k in tax and couldn't dream of living in one of these expensive areas, while somewhat not working could get 90k/year in rent !!!!

I know these are isolated incidents, which means the impact will be low.

Lowering housing benefit to the 30th percentile is also a good move (8-12% cut). The rates in my area are still above what I pay in rent, so wouldn't mind seeing it go lower. This is unlikely to cause many to have to move, but will lower the whole rental market (40% is HB in London !!!!)

Don't agree with the further 10% when you've been out of work for year. Not sure what that achieves.

daviesee

I have had to relocate 7 times so you can guess where I stand on the subject.

IMHO though, the problem is not the benefits being capped that is the issue rather it is the ever increasing problem of housing costs. Prices are high so people need increased wages (over outside London). People get increased wages so the prices go up.
There needs to be a massive housing crash before anything changes. Can't see that happening.............

rjsterry

sicknewt wrote:

I definitely think we need a benefits cap - why should taxpayers fork out long term for non-taxpayers?

However, the cap should not be used to drive the people of London / Birmingham / Cardiff / Glasgow / wherever out of their homes, but alongside initiatives to get people back into work and earning.

Also, perhaps their needs to be some weighting so people in London (etc) get more money to pay higher rents?

A lot of people claiming housing benefit are already working - just in very low-paid jobs.

TheStone

daviesee wrote:

There needs to be a massive housing crash before anything changes. Can't see that happening.............

Something's got to give. The whole western world has had a housing crash. We've only avoided it by printing money which has made the banks richer and stopped the slide in asset prices vs a devalued currency. You can only get away with it for so long ......

georgee

Make them all sit on exercise bikes generating lecky for the national grid.

solves unemployment
solves warehouse empty rate relief changes
solves obesity and save NHS expenditure

if they have too many kids, sell the spare ones to Madonna.

jzed

georgee wrote:

Make them all sit on exercise bikes generating lecky for the national grid.

solves unemployment
solves warehouse empty rate relief changes
solves obesity and save NHS expenditure

if they have too many kids, sell the spare ones to Madonna.

rjsterry

As discussed on the George Osborne thread, if local authorities had sufficient council owned housing stock then this wouldn't be an issue. There's certainly an irony in public money being used to rent back ex-local authority flats from private landlords. My current and previous homes were ex-local authority, and having seen the documentation showing how much the properties were originally sold to the (then) tenants for, it's clear that the right-to-buy policy was a good way of giving some working class people a (very big) leg up - an odd one to credit Thatcher with. But there was a big downside. For some reason (short-termism? local politicians?) nobody thought it would be a good idea to reinvest some of the money gained from selling off council stock into replenishing that stock.

jzed

Talking of the work-shy - see Tube's are going on strike again tomorrow.

Gazzaputt

Why should the tax payer pickup the bill for someone to live where without state help they wouldn't be able to afford?

£400 limit per week? I'd make it £200 limit per week.

bigmat

If only Thatcher hadn't sold off all that council housing, we wouldn't be having to pay through the nose to private landlords. Like so many of these things, you can trace a lot of the problem back to the government before last. Still, not long to go now!

georgee

Everyone here is citing the cost of renting, last time I checked the cost of maintenance and finance (mortgage) is hardly that different to the rents charged. Buy to let Landlords still cling on to capital growth to make them cash, resi is hardly a high yielding investment.

rjsterry

MatHammond wrote:

If only Thatcher hadn't sold off all that council housing, we wouldn't be having to pay through the nose to private landlords. Like so many of these things, you can trace a lot of the problem back to the government before last. Still, not long to go now!

Although those tenants that did buy (at huge discounts from market value) have done very well out of it, and seen their equity increase maybe ten-fold, so you could argue that the policy was redistributive. The problem is that the money generated by the sell-off was not reinvested back into building more housing to replenish the stock - I suspect a lot was spent on keeping council tax artificially low (Wandsworth, I'm looking at you). New social housing now largely has to piggyback on the back of private developments, with developers forced to provide a small percentage of 'affordable' units in larger projects.

The reduced stock of local authority housing, and its concentration on the poorest in society is also partly responsible for the stigma that is attached to living in social housing, which isn't particularly helpful.

georgee

rjsterry wrote:

MatHammond wrote:

If only Thatcher hadn't sold off all that council housing, we wouldn't be having to pay through the nose to private landlords. Like so many of these things, you can trace a lot of the problem back to the government before last. Still, not long to go now!

Although those tenants that did buy (at huge discounts from market value) have done very well out of it, and seen their equity increase maybe ten-fold, so you could argue that the policy was redistributive. The problem is that the money generated by the sell-off was not reinvested back into building more housing to replenish the stock - I suspect a lot was spent on keeping council tax artificially low (Wandsworth, I'm looking at you). New social housing now largely has to piggyback on the back of private developments, with developers forced to provide a small percentage of 'affordable' units in larger projects.

The reduced stock of local authority housing, and its concentration on the poorest in society is also partly responsible for the stigma that is attached to living in social housing, which isn't particularly helpful.

Small percentage is more like 35% these days, or a section 106 payment in it's place so the council may receive compensation to provide more social housing but then no one knows how it's distributed by the council?

Cafewanda

rjsterry wrote:

The reduced stock of local authority housing, and its concentration on the poorest in society is also partly responsible for the stigma that is attached to living in social housing, which isn't particularly helpful.

^ This.

I now live in housing trust property having been made homeless some years ago. I well remember the absolute shame of having to claim housing benefit, even though the property I would move into temporarily was well above my financial means. Now I would argue that as a taxpayer of some years, I was only 'reclaiming' a little of it, but at the time I was almost in tears.

My particular HT has been increasing its rent year on year to be aligned with private market rents, which probably means a high proportion of tenants have to claim HB, so I don't want those with mortgages/private rental costs to think we have it too easy.

kurako

I like the system in New York better. There are sections of housing such as Stuyvesant Town in Manhattan where rents are capped. This helps to keep property affordable and is unpopular with landlords who would rather let 'market forces' prevail.

I say f*ck em.

http://www.guardian.co.uk/business/2010 ... n-new-york

notsoblue

It didn't bother me hugely that people were living in central London with the help of government assistance. I've lived in Chiswick and now Fulham, and while there is some diversity, its skewed toward the more affluent. So I can't say it really affects me negatively at all. A comparable proportion of the tax I pay goes towards Trident and various wars, so it would be a bit ludicrous of me to be against the "tax payer picking up the bill" for subsidising the poor living in London.

If housing benefit means that poor kids get to grow up in a more diverse, affluent area rather than a ghettoised council estate in some far flung suburb, then I'm all for it tbh. Social mobility and aspiration ftw.

davmaggs

I support the new limits.

I've recently been looking to rent a house in surburbs in a nice area and the new cap would more than cover it. The idea that the 'poor' would be sent off to Siberia is absolute nonsense and shown to be so by spending ten minutes looking at rental prices online.

The idea that the rest of us need to move to follow work, better ourselves or adapt to our incomes whilst others are exempt seems foolish. Add in the fact that unlimited amounts of cash in usual economic situations means that price inflation goes up means that rents are probably articially high in many cases and are probably forcing out other low paid workers who can't game the system.

I suspect that this cap is part of a long term plan to start changing behaviour so whilst I'm sure that the media will find some sad tales we will also start to see benefits in the medium term.

notsoblue

davmaggs wrote:

I support the new limits.

I've recently been looking to rent a house in surburbs in a nice area and the new cap would more than cover it. The idea that the 'poor' would be sent off to Siberia is absolute nonsense and shown to be so by spending ten minutes looking at rental prices online.

The idea that the rest of us need to move to follow work, better ourselves or adapt to our incomes whilst others are exempt seems foolish. Add in the fact that unlimited amounts of cash in usual economic situations means that price inflation goes up means that rents are probably articially high in many cases and are probably forcing out other low paid workers who can't game the system.

I suspect that this cap is part of a long term plan to start changing behaviour so whilst I'm sure that the media will find some sad tales we will also start to see benefits in the medium term.

I don't understand where this prejudice comes from, why is it people think that those who claim housing benefit do not work to better themselves?

MonkeyMonster

WGWarburton wrote:

Hi,
I'd like to hold up this post as an excellent example of why this forum stands accused of London-bias.

Cheers,
W.

Not sure we [londoners] have ever denied there is a distinct london bias in this forum. We [anyone] *could* run a poll of where you [readers] are located but I'd put money on the majority (by quite a margin) in london and likely so would most people...

Is this a problem?

Oh and on the point of subsidies to live in the central part of a capital city when you blatantly can't afford to... well, there's your answer.