Housing for greed not for need is Tory policy (170% council rent rises)

Why would any London local council charge a social rent on a new property when they can charge on average £11,166 more per year in rent on it?

That is what the Tory Housing White Paper allows and directly advises!

Why would any regional local council charge a social rent on a new property when they can charge on average £5,753 more per year in rent on it?

That is what the Tory Housing White Paper allows and directly advises!

As a new build house has a typically estimated life span of 60 years, the London council will get £669,973 more in rent by doing this and the council in the regions will get an additional £345,161 in rent PER PROPERTY.

That is what the Tory Housing White Paper allows and directly advises!

As well as screwing the tenant for more rent all of these properties have (a) no tenant right to buy and (b) have no security of tenure.

That is what the Tory Housing White Paper allows and directly advises!

What’s more is that these properties which will all be rented at 100% of the gross market rent level, that is full private rent levels, will be the ONLY properties that councils will build.

That is what the Tory Housing White Paper allows and directly advises!

So, for one example, councils will NOT be building disability adapted or disability-friendly properties or any other housing that is based on need and instead will be building solely for greed.

That is what the Tory Housing White Paper allows and directly advises!

As I explained here – and of which there is no doubt and no dissent opinion to – the Tories Housing White Paper at paragraph 4.35 on page 62 says that local councils can set up or expand their private rental companies to build new properties for rent at the full or gross market rent level.

As I also explained these council owned but private housing developers that operate on a 100% commercial basis, will have to go to the markets to get the finance to build and these financial backers will insist the new properties will be rented at the full private rent level.

The Tory government has confirmed that these private rental properties will be exempt from the tenant Right To Buy (RTB)

Liverpool City Council already has its own local housing company or LHC which is the type of company all local councils can and have set up to build these new private housing products.  As do many more councils.  Housing Associations do not need any such contrived vehicle and they already rent out over 50,000 houses at the full private or market rent level.

Prior to this fundamental and seismic change we also have very opaque vehicles to let out former council housing at private rent levels by housing associations and an example is Bamboo Lettings in the North West.

Bamboo Lettings is owned by Magenta and Torus.  Magenta was the former council housing department of Wirral Borough Council, and Torus is the former council housing departments of Warrington and St Helens.  It has offices in Wirral and even its own Facebook page here and there you can see the strap line Bamboo Lettings is a private lettings company, with properties in Wirral, Warrington and St Helens.  Such contrived and opaque constructs are no longer needed reader!

In an article today here we see David Orr the Chief Executive of the National Housing Federation in very welcoming mood over the Tories Housing White Paper

Encouraging private landlords to offer tenants more security and choice is absolutely the right thing to do. Housing associations share the government’s commitment to improving life for all renters – across the private and social sector – and driving up standards, already offering 50,000 homes to rent on the open market.

Which of course he would be as we also see today this time in the Guardian a report saying the Royal Institute of Chartered Surveyors are forecasting that rents will rise more than house prices.  Kerching for all housing association and council landlords especially those who have private fully commercialised arms which because of the Tories Housing White Paper will be all of them!

Building for housing greed and not housing need has long been the sole preserve of the housing associations and for whom less than 13% of all newly developed housing in 2015/16 was at a social rent level while more than 87% was not.

Now the Tories Housing White Paper will see all local councils be building for greed and not for housing need – That is a seismic shift in UK housing policy and without any doubt IS the end of the social housing model created in the 1948 Welfare State.

All tenants and tenant activists who rightly argued that the affordable rent model which housing associations and councils now use to charge up to 80% of gross market rent (ie private rent levels) was not affordable, and rightly so, will now see the end of it.  In simple terms why should housing association and council landlords be constrained at 80% of gross market rent when the Tories Housing White Paper says they can and should go directly to 100%?

Rent Increases Tory Housing White Paper Allows (Regional Average)

hwp-rent-increases

The above table is what the Housing White Paper or Tory housing policy if you prefer means.

Reading across the first line from left to right sees that a council can increase the rent from SR (Social Rent) to AR (Affordable Rent) for a 1 bed property by on average 49.33%.  Yet why would they do this when on the second line it shows a council can go straight from social rent (SR) to the full Private Rented Sector (PRS) rent level and get a 86.67% increased rent on a 1 bed new property?

Even councils such as Liverpool which has no council housing and similar to 35 other councils of the 39 in the North West can and will set up their own local housing company (LHC) which will be publicly owned yet only offer private rented housing.

How many lenders are going to be knocking on council door begging them to take their finance now that the average local council outside of London can charge 86.67% more in rent for a 1 bed property and 86.01% more in rent for a 2 bed property and 83.51% more in rent for a 3 bed property and 95.04% more in rent for a 4 bed or larger property?

How many councils have no choice but to accept this no-brainer of a deal?  Yes that is a rhetorical question as it will have to be all of them.

London councils can charge on average 170% more in rent for a 2 bed property due to Tory housing policy and is the highest percentage increase nationally and for housing associations in London for a 2 bed it is a 128.46% increase in rent permissible thanks to Tory housing policy in the white paper.

You see why David Orr is so welcoming of the white paper now reader?  So when you hear or read any housing association (or council) landlord say we have social purpose and we will always house those most in housing need, blah, blah, blah, the correct response is …?

A) Do you work for Donald Trump?

B) What planet are you on?

C) Oh do fuck off!

You can also see why local councils and the Local Government Association (LGA) have also welcomed the white paper and you can also bet your life that all councils, regardless of which political party runs the council, will be beating off the financiers with a stick as they hammer on the doors of every Town Hall in the UK.

The tenant is being screwed with the full permission and direct inevitable consequence of Tory policy being housing for greed and not for need!

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4 thoughts on “Housing for greed not for need is Tory policy (170% council rent rises)

  1. 4 things come to mind. Won’t this make Rent Officers obsolete?? And if you’re on housing benefit and they pay for full rent. Subject to the LHA rent. That push’s up the Housing benefit bill? And those paying the Bedroom Tax will have even less choice to move to a smaller property? And so the government think they will make more money out of them?And those wanting to do an exchange. Will have to consider a huge increase in the rent. With a new tenancy? All that also effects social housing

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