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

sketchley

notsoblue wrote:

. And its not the only recent tory led change that will do so. Hammersmith & Fulham has undergone some significant social change under the conservative council who have been disproportionately unfair against those on lower wages or more reliant on government services in the borough. The intention seemingly being to slowly force them out.

Really? I've not read anything about this and cannot find anything on google. Can you provide some links explaining what is going in Hammersmith & Fulham. Would be interested to read how they are doing this, what policies have been past and which councellors voted in favour which against.

notsoblue

Sketchley wrote:

notsoblue wrote:

. And its not the only recent tory led change that will do so. Hammersmith & Fulham has undergone some significant social change under the conservative council who have been disproportionately unfair against those on lower wages or more reliant on government services in the borough. The intention seemingly being to slowly force them out.

Really? I've not read anything about this and cannot find anything on google. Can you provide some links explaining what is going in Hammersmith & Fulham. Would be interested to read how they are doing this, what policies have been past and which councellors voted in favour which against.

Theres some facts here amongst all the emotive prose: http://johannhari.com/2010/05/05/welcom ... meron-land . Will try and dig out some primary sources if I have the time.

wgwarburton

Hi,
Ah, those evil landlords. We must stop them trying to make a profit out of providing a service to people who don't want or can't afford to buy property.
That will really help with the mobility of the workforce. It's so much easier to move to get a job when you have to sell your house & buy a new one to relocate.

The notion that a flexible workforce is a competitive advantage is probably nonsense, anyway. Much better to go back to the old days of proper job security in real jobs where people make things. Then they won't need to move.
Tell you what, I've got a brilliant idea- let's set up a steelworks in Sheffield! There's plenty of coal nearby to fuel it and railways to bring in the ore. I'm sure people would jump at the chance to work there, and we could pay them a decent wage so they could afford decent houses. I bet we could produce for $1500/tonne, if we tried...

Cheers,
W.

daviesee

notsoblue wrote:

Anyway, we all seem to be agreed that £400 a week is too much to receive in benefits, that the rents levied by landlords are far too high, and that some people will exploit loopholes in the system.

If only we could leave it at that............

lardboy

WGWarburton wrote:

Hi,
Ah, those evil landlords. We must stop them trying to make a profit out of providing a service to people who don't want or can't afford to buy property.

Because maintaining private sector profits are what public sector funds should be used for? It's disgraceful enough that landlords can claim tax relief on mortage interest when regular punters can't. now we're supposed to feel sorry for them because we need to cut expenditure? No thanks.

If the landlord doesn't like the reduced profits he can get out of the business. If this means that he has to sell his over-leveraged, over-valued, under-maintained property into a falling market, then so be it.

W1

lardboy wrote:

It's disgraceful enough that landlords can claim tax relief on mortage interest when regular punters can't.

Erm, why? Do you also object to businesses paying tax on their profits rather than their turnover?

wgwarburton

daviesee wrote:

notsoblue wrote:

Anyway, we all seem to be agreed that £400 a week is too much to receive in benefits, that the rents levied by landlords are far too high, and that some people will exploit loopholes in the system.

If only we could leave it at that............

'Cos it's really that simple?

Let's take "some people will exploit".. as a given. We strive to minimise it but it's going to happen.
The £400 a week figure depends on other factors- it's arisen because of the cost of maintaining an "acceptable" standard of living. The figure itself is largely arbitrary and depends on the balance between the cost of living generally and definitions of "acceptable".

So, that leaves us with "rents ... are too high". Why are rents high? Is it because landlords are exploiting people? Well, partly- see above. Largely, however it's because property prices are high. Even if you've managed to acquire a property cheaply (inherited? Bought & paid for years ago?) you would be daft to forgo a "market" rent- if nothing else you would be losing the opportunity to invest the capital it represents elsewhere ("Opportunity Cost").
The market rent reflects the cost of building and maintaining the property. In the UK, that is largely determined by the price of land and the difficulty of building on it.

So, how to address that problem? You could loosen planning regs and free up land.
That could make property more affordable (though devaluing the UKs current housing stock overnight might have some negative consequences) but where would you allow building? In the city centres? In the country? In the suburbs? Who's backyard would you build on?

Bear in mind that you need to factor in where the work is, how people will travel (hey- more roads!!) and how to deliver services like water, sewage, power waste recycling, hospitals, schools...

... and, unless you get all this right, you may also have to tackle the problems of the places left behind.. what happens there is also pretty crucial to the long term prospects of us all...

Cheers,
W.

tailwindhome

lardboy wrote:

It's disgraceful enough that landlords can claim tax relief on mortage interest when regular punters can't.

Why is this 'disgraceful'?



ETA Scalped by W1..need to type quicker

squired

I don't have time to read through all 7 pages, so apologies if my comments repeat anything already said.

Personally I believe in the cap. People should have to work to better themselves - I believe in an aspirational society. In this country it very much seems to be a society where the rich are hated (unless they are a celebrity of course).

My big issue when it comes to London is the problem of transport. The Labour Government gradually reduced subsidies on train travel as they said it was the "fair" thing to do. Due to the fact transport isn't a major vote winner and the state of the country's finances, this Government is going to continue that trend. The problem is that as people are forced to move further from the centre of London they are then subject to ridiculous train fares. If you aren't earning much, paying maybe £2,000 of your net income on travel is shocking.

I feel that the Govenment is going to need to take another look at transport and the money invested into it. I'd love it if everyone cycled, but that will never happen. I'd love it if companies were encouraged to let more staff work at home frequently, which would reduce the burden on the transport system. However, that doesn't get around the problem that the transport system is simply too expensive. If it isn't possible to offer everyone inside the M25 reasonably priced travel into work they might as well just put tarmac down over the rail tracks and run coaches, then replace train stations with massive car parks.

jds_1981

notsoblue wrote:

You mean "social cleansing"? Don't misquote it to devalue its intended meaning. This change to benefits *will* have an effect on a large demographic resident in London.

Yes of course it will, they're reducing the effects of the current unjust social engineering.

notsoblue

jds_1981 wrote:

notsoblue wrote:

You mean "social cleansing"? Don't misquote it to devalue its intended meaning. This change to benefits *will* have an effect on a large demographic resident in London.

Yes of course it will, they're reducing the effects of the current unjust social engineering.

You'll have to elaborate on what you mean by "unjust social engineering", and if you mention benefit fraud or £400/week rents I'll kill this cute little kitten I have here. I'll snuff its tiny little life out. I swear I will, don't test me...

lardboy

W1 wrote:

lardboy wrote:

It's disgraceful enough that landlords can claim tax relief on mortage interest when regular punters can't.

Erm, why? Do you also object to businesses paying tax on their profits rather than their turnover?

Like football clubs paying heavily reduced tax compared to turnover purely because they've loaded the club up with debt? Debt that is owed to another operating arm of the same holding company? Yes, I do. In general terms, no.

In terms of housing, I object to disadvantaging people who want to buy property as occupiers, in preference to those who want to run a business making profits out of those they have managed to squeeze out.

wgwarburton

lardboy wrote:

WGWarburton wrote:

Hi,
Ah, those evil landlords. We must stop them trying to make a profit out of providing a service to people who don't want or can't afford to buy property.

Because maintaining private sector profits are what public sector funds should be used for? It's disgraceful enough that landlords can claim tax relief on mortage interest when regular punters can't. now we're supposed to feel sorry for them because we need to cut expenditure? No thanks.

You can claim mortgage relief on your main residence, not on Buy-to-lets, holiday homes etc.

If the landlord doesn't like the reduced profits he can get out of the business. If this means that he has to sell his over-leveraged, over-valued, under-maintained property into a falling market, then so be it.

Maybe a touch sweeping there? It could be that there are landlords who simply let properties in preference to selling, meeting a demand for temporary accomodation and looking to sustain a good relationship with the people who are occupying his substantial capital commitment, so that it isn't devalued...
Or would those be the corner cases?

Cheers,
W.

rick_chasey

TailWindHome wrote:

CiB wrote:

<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>

this

Isn't the point, CiB - that reducing the subsidy won't take the bottom out of the rental market, but instead will force the poor who depend on it out of the city centre - so you get a kind of Paris style centre where it's all very nice to vist and moneyed, and you concentrate all the poor around the edges of the city?

It's a kind of economic ghetoisation > it's not an ideal scenario, and it doesn't lead to as much social cohesion. Why I think London does better than most cities with regard to social cohesion is the way it's all still quite mixed up. I'd suggest removing the subsidy would reduce that.

notsoblue

Rick Chasey wrote:

Isn't the point, CiB - that reducing the subsidy won't take the bottom out of the rental market, but instead will force the poor who depend on it out of the city centre - so you get a kind of Paris style centre where it's all very nice to vist and moneyed, and you concentrate all the poor around the edges of the city?

It's a kind of economic ghetoisation > it's not an ideal scenario, and it doesn't lead to as much social cohesion. Why I think London does better than most cities with regard to social cohesion is the way it's all still quite mixed up. I'd suggest removing the subsidy would reduce that.

+1, this is the main issue here.

W1

Rick Chasey wrote:

TailWindHome wrote:

CiB wrote:

<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>

this

Isn't the point, CiB - that reducing the subsidy won't take the bottom out of the rental market, but instead will force the poor who depend on it out of the city centre - so you get a kind of Paris style centre where it's all very nice to vist and moneyed, and you concentrate all the poor around the edges of the city?

It's a kind of economic ghetoisation > it's not an ideal scenario, and it doesn't lead to as much social cohesion. Why I think London does better than most cities with regard to social cohesion is the way it's all still quite mixed up. I'd suggest removing the subsidy would reduce that.

The impication being that £400 a week isn't enough except for a box flat in Croydon? Which is rubbish of course. As I say, £400 a week is what you could spend if you earn £50k, and London isn't home to only those who earn that much! So I'm not convinced that this cap is going to "drive the poor" out of London, but I think it might make them less able to live in excessively large or expensive properties. And I don't see that there is much wrong with that when the taxpayer is funding it.

tailwindhome

notsoblue wrote:

Rick Chasey wrote:

Isn't the point, CiB - that reducing the subsidy won't take the bottom out of the rental market, but instead will force the poor who depend on it out of the city centre - so you get a kind of Paris style centre where it's all very nice to vist and moneyed, and you concentrate all the poor around the edges of the city?

It's a kind of economic ghetoisation > it's not an ideal scenario, and it doesn't lead to as much social cohesion. Why I think London does better than most cities with regard to social cohesion is the way it's all still quite mixed up. I'd suggest removing the subsidy would reduce that.

+1, this is the main issue here.

What difference does it make wether the 'poor' live in 'inner city' ghettos or 'suburban' ghettos?

Could someone explain why it's common sense to end subsidies for coalmines, steelworks and shipyards in the industrial north decimating entire towns but 'social cleansing' if subsidies are ended in 'That London'?

lardboy

WGWarburton wrote:

You can claim mortgage relief on your main residence, not on Buy-to-lets, holiday homes etc.

Not since MIRAS was scrapped in 2000.

First time buyers get 7 years relief, but interest on any loans raised for "business uses" can be offset against your profits.

W1

lardboy wrote:

In terms of housing, I object to disadvantaging people who want to buy property as occupiers, in preference to those who want to run a business making profits out of those they have managed to squeeze out.

Why? Because you have a right to own a house where you want to at a price you want?

rick_chasey

W1 wrote:

The impication being that £400 a week isn't enough except for a box flat in Croydon? Which is rubbish of course. As I say, £400 a week is what you could spend if you earn £50k, and London isn't home to only those who earn that much! So I'm not convinced that this cap is going to "drive the poor" out of London, but I think it might make them less able to live in excessively large or expensive properties. And I don't see that there is much wrong with that when the taxpayer is funding it.

I think the reality is that most people who receive the subsidy are not living 'excessively'.

If you have a family to support, the cost of having a property with more than one or two bedrooms can get very expensive. It's not unreasonable to suggest that a 1 bedroom flat is not appropriate for a family of 4.

squired

Rick Chasey wrote:

I think the reality is that most people who receive the subsidy are not living 'excessively'.

If you have a family to support, the cost of having a property with more than one or two bedrooms can get very expensive. It's not unreasonable to suggest that a 1 bedroom flat is not appropriate for a family of 4.

If you can't afford to keep and house a family of four, don't have children. It is one thing if you fall on hard times and need help from the state, but otherwise you should make life decisions based on what you can afford.

lardboy

W1 wrote:

lardboy wrote:

In terms of housing, I object to disadvantaging people who want to buy property as occupiers, in preference to those who want to run a business making profits out of those they have managed to squeeze out.

Why? Because you have a right to own a house where you want to at a price you want?

Nope. I just want a level playing field. I'm having to pay out of net income, landlords get to pay out of gross(ish).

rick_chasey

squired wrote:

Rick Chasey wrote:

I think the reality is that most people who receive the subsidy are not living 'excessively'.

If you have a family to support, the cost of having a property with more than one or two bedrooms can get very expensive. It's not unreasonable to suggest that a 1 bedroom flat is not appropriate for a family of 4.

If you can't afford to keep and house a family of four, don't have children. It is one thing if you fall on hard times and need help from the state, but otherwise you should make life decisions based on what you can afford.

People are always going to have children - your argument is exactly the point. "if you can't afford it, live somewhere else". If that occurs - then you get the kind of ghettoisation i referred to earlier.

W1

Rick Chasey wrote:

W1 wrote:

The impication being that £400 a week isn't enough except for a box flat in Croydon? Which is rubbish of course. As I say, £400 a week is what you could spend if you earn £50k, and London isn't home to only those who earn that much! So I'm not convinced that this cap is going to "drive the poor" out of London, but I think it might make them less able to live in excessively large or expensive properties. And I don't see that there is much wrong with that when the taxpayer is funding it.

I think the reality is that most people who receive the subsidy are not living 'excessively'.

If you have a family to support, the cost of having a property with more than one or two bedrooms can get very expensive. It's not unreasonable to suggest that a 1 bedroom flat is not appropriate for a family of 4.

I don't think a £1600pcm cap is unreasonable. That will get you somewhere perfectly decent for a family in Zone 2 or 3.

notsoblue

TailWindHome wrote:

What difference does it make wether the 'poor' live in 'inner city' ghettos or 'suburban' ghettos?

Could someone explain why it's common sense to end subsidies for coalmines, steelworks and shipyards in the industrial north decimating entire towns but 'social cleansing' if subsidies are ended in 'That London'?

The point is that there are no inner city ghettos. Theres plenty of social housing secreted away in very upmarket areas like Kensington, Chelsea etc... Areas like Westbourne Park and Ladbroke grove are very diverse, and by and large the communities exist well together. If the working class are forced out of these areas then they'll end up in true suburban "ghettos" where its mile upon mile of deprivation that becomes an aspiration vacuum.

rick_chasey

TailWindHome wrote:

What difference does it make wether the 'poor' live in 'inner city' ghettos or 'suburban' ghettos?

Could someone explain why it's common sense to end subsidies for coalmines, steelworks and shipyards in the industrial north decimating entire towns but 'social cleansing' if subsidies are ended in 'That London'?

London doesn't really have really proper Parisian style ghettos. It's much more localised and small.

This isn't particularly an argument for housing subsidies versus coalmining etc.

They're totally different, and quite unrelated in this instance.

tailwindhome

notsoblue wrote:

TailWindHome wrote:

What difference does it make wether the 'poor' live in 'inner city' ghettos or 'suburban' ghettos?

Could someone explain why it's common sense to end subsidies for coalmines, steelworks and shipyards in the industrial north decimating entire towns but 'social cleansing' if subsidies are ended in 'That London'?

The point is that there are no inner city ghettos. Theres plenty of social housing secreted away in very upmarket areas like Kensington, Chelsea etc... Areas like Westbourne Park and Ladbroke grove are very diverse, and by and large the communities exist well together. If the working class are forced out of these areas then they'll end up in true suburban "ghettos" where its mile upon mile of deprivation that becomes an aspiration vacuum.

I don't live in 'That London' so I don't know.

I do find your post astonishing though.

Am I paying tax so that some working class people can live beside rich people in London and not have to live beside other working class people. How do the working class people who don't live in Kensington feel about this?

Let's hear no more about the block grants to Scotland, Wales and NI.

tailwindhome

Rick Chasey wrote:

TailWindHome wrote:

What difference does it make wether the 'poor' live in 'inner city' ghettos or 'suburban' ghettos?

Could someone explain why it's common sense to end subsidies for coalmines, steelworks and shipyards in the industrial north decimating entire towns but 'social cleansing' if subsidies are ended in 'That London'?

London doesn't really have really proper Parisian style ghettos. It's much more localised and small.

This isn't particularly an argument for housing subsidies versus coalmining etc.

They're totally different, and quite unrelated in this instance.

In principle how are they different?

rick_chasey

TailWindHome wrote:

Rick Chasey wrote:

TailWindHome wrote:

What difference does it make wether the 'poor' live in 'inner city' ghettos or 'suburban' ghettos?

Could someone explain why it's common sense to end subsidies for coalmines, steelworks and shipyards in the industrial north decimating entire towns but 'social cleansing' if subsidies are ended in 'That London'?

London doesn't really have really proper Parisian style ghettos. It's much more localised and small.

This isn't particularly an argument for housing subsidies versus coalmining etc.

They're totally different, and quite unrelated in this instance.

In principle how are they different?

One is a market which is confined to the city, or at a stretch, nationally, and has the peculiarities that come with property, such as the supply, the geographical factors, etc etc. The other is an international market which has no geographicl restrictions. One is about the cost of living in a particular area, wheres the other is about the sustainability of a type of work which is uncompetitive internationally. It's completely different.

rick_chasey

TailWindHome wrote:

I don't live in 'That London' so I don't know.

I do find your post astonishing though.

Am I paying tax so that some working class people can live beside rich people in London and not have to live beside other working class people. How do the working class people who don't live in Kensington feel about this?

Let's hear no more about the block grants to Scotland, Wales and NI.

It's not a subsidy exclusive to London is it? It just affects London much more because of its own pecularities?