Those greedy benefit landlords soon to be revealed.

karkus30

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http://www.adamsmith.org/research/articles/the-benefit-industrial-complex

Nice to see that those landlords who have benefitted from taxpayers money will soon be deprived of direct state payments and will, like every other business, have to rely on their customers paying the bills, while providing an acceptable level of accommodation.

Its been shown that this is a huge industry that has benefitted greatly from being protected from normal business practice and allowed rates to creep up.
 
Viewed thus Housing Benefit is less a welfare program than a national industry, operating on the scale of value-added giants like automobile manufacturing (£54bn) or defence (£45bn) and capable of distorting the market to the detriment of the working taxpayer. As a component of income allocated towards housing, Housing Benefit has long outstripped private wages. As a subsidy it disrupts the supply of property for private renters, providing what is in effect a national minimum rent while driving up rents for non-beneficiaries in the process, thus striking the propertyless taxpayer from three directions.

Something that has been argued on these forums for some time, but denied by those who directly benefit from the set-up.....
:nono:
 
What is amusing is that there are some who think it worthwhile starting a thread with the sole intention of having a go at one particular member. Has he really got you that much?

My advice would be to put him on your ignore list and enjoy the forums a bit more.
 
johntheexpat said:
What is amusing is that there are some who think it worthwhile starting a thread with the sole intention of having a go at one particular member. Has he really got you that much?

My advice would be to put him on your ignore list and enjoy the forums a bit more.

It isn't actually. Its something we have argued for some time when costs of housing have come up. I and others have said for some time that the provision of a subsidy distorts markets and leads to a rise in rental, just as wage fixing does the same for employment. It drives up the costs and stops the less wealthy getting on the ladder and forces them to accept a tax payer hand out.
 
What is amusing is that there are some who think it worthwhile starting a thread with the sole intention of having a go at one particular member. Has he really got you that much?
Of course that other member would never start threads with the sole intention of doing exactly the same :devil:
 
The Benefit-Industrial Complex | Adam Smith Institute

Nice to see that those landlords who have benefitted from taxpayers money will soon be deprived of direct state payments and will, like every other business, have to rely on their customers paying the bills, while providing an acceptable level of accommodation.

Its been shown that this is a huge industry that has benefitted greatly from being protected from normal business practice and allowed rates to creep up.

As I have very good tenants that does not worry me one bit:laugh:I just love the fact that its the tax payer who foots the bill to provide a nice home for tenants who would otherwise be destitute, and yet of them seem to get so worked up about it.i might also point out that the vast majority of private landlords wont touch DSS recipients with a barge pole, so i am doing something right:clap:
 
la gran siete said:
As I have very good tenants that does not worry me one bit:laugh:I just love the fact that its the tax payer who foots the bill to provide a nice home for tenants who would otherwise be destitute, and yet of them seem to get so worked up about it.i might also point out that the vast majority of private landlords wont touch DSS recipients with a barge pole, so i am doing something right:clap:

I said greedy landlords, I didn't imply you were one. There are plenty of them as the article points out. The other concern is that tax payer funded rent pushes up rent for everyone and penalises those who are borderline who cannot afford the raised prices.
 
I said greedy landlords, I didn't imply you were one. There are plenty of them as the article points out. The other concern is that tax payer funded rent pushes up rent for everyone and penalises those who are borderline who cannot afford the raised prices.

Which has always been my key point.
:smashin:
 
I said greedy landlords, I didn't imply you were one. There are plenty of them as the article points out. The other concern is that tax payer funded rent pushes up rent for everyone and penalises those who are borderline who cannot afford the raised prices.

the only thing that is wrong is the lack of decent social housing at affordable rents.Thats why the local council get in touch with people like me in the hope we will let through them.there has been some development but nowhere near enough
 
the only thing that is wrong is the lack of decent social housing at affordable rents.Thats why the local council get in touch with people like me in the hope we will let through them.there has been some development but nowhere near enough


Nice to see you involved in private enterprise!

I was a private landlord for a total of 12 years while I was overseas working.

Can't really understand how a subsidy drives up rents and, at the same time, it provides a minimum rent. Surely that is a contradiction?
 
la gran siete said:
the only thing that is wrong is the lack of decent social housing at affordable rents.Thats why the local council get in touch with people like me in the hope we will let through them.there has been some development but nowhere near enough

That's because tax payer funding will always push someone into poverty no matter how well meaning. It is effectively the state competing with the public for property. Supply and demand guarantees that prices will increase if the state is creating the demand. That's simple economics.

The fact there is insufficient housing is a different thing all together and is the result of far to tight planning restrictions and taxation payments that benefit the state instead of the individuals who are disadvantaged by the new developments. There would be far less Nimby's about if they were correctly compensated for housing developments in a localist, or direct way. The planning regulations need to be relaxed and houses built where they are required. I have been listening to these balmy groups suggesting that we build houses in the North, when they are required in the South.
 
Nice to see you involved in private enterprise!

I was a private landlord for a total of 12 years while I was overseas working.

Can't really understand how a subsidy drives up rents and, at the same time, it provides a minimum rent. Surely that is a contradiction?

as far as i know rents in social housing are set at about £300 pm for a flat Clealry the local council doesnt have enough access to such housing so it relies on private landlords to fill the gap, but they will only do so if the renst they receive are at market level
 
Alan CD said:
Can't really understand how a subsidy drives up rents and, at the same time, it provides a minimum rent. Surely that is a contradiction?

Simple economics. If the state competes with the public for housing it drives up demand. Private enterprise will always look for easy returns which is the nature of any entrepreneur and not the fault of the entrepreneur. When the state waves money in your face you would be daft not to take it.

As an example. Imagine a couple on a budget who can only afford £ 200 per month on rental. Now, we have those who are on benefits that are given houses. The more landlords who won't take DSS the higher the cost of rental becomes because there is a limited supply. This becomes the de facto lower limit, kind of like a 'minimum' wage. No one goes below that. As an example it now drives average rental costs to £250 per month and that excludes the couple from being able to afford to rent. No amount of wrangling with the benefits clerks will allow the couple to rent unless they earn less than they are currently on.

I'm not kidding about this. One lady asked me to sack her in order that she could get housing benefit ! We then have an increasing demand for housing rental from the State as more and more give up marginal work. This drives the price higher again and begins to effect those who can afford £250. The public demands more social housing, high rent allowances or increased minimum wages in order to correct the problem. The result is a spiral upwards and fewer jobs being taken as a result of the State competing with employers in provision of wages.

That's how we have got to some of these very high rents because of the laws of supply and demand and having no cap.
 
Simple economics. If the state competes with the public for housing it drives up demand. Private enterprise will always look for easy returns which is the nature of any entrepreneur and not the fault of the entrepreneur. When the state waves money in your face you would be daft not to take it.

As an example. Imagine a couple on a budget who can only afford £ 200 per month on rental. Now, we have those who are on benefits that are given houses. The more landlords who won't take DSS the higher the cost of rental becomes because there is a limited supply. This becomes the de facto lower limit, kind of like a 'minimum' wage. No one goes below that. As an example it now drives average rental costs to £250 per month and that excludes the couple from being able to afford to rent. No amount of wrangling with the benefits clerks will allow the couple to rent unless they earn less than they are currently on.

I'm not kidding about this. One lady asked me to sack her in order that she could get housing benefit ! We then have an increasing demand for housing rental from the State as more and more give up marginal work. This drives the price higher again and begins to effect those who can afford £250. The public demands more social housing, high rent allowances or increased minimum wages in order to correct the problem. The result is a spiral upwards and fewer jobs being taken as a result of the State competing with employers in provision of wages.

That's how we have got to some of these very high rents because of the laws of supply and demand and having no cap.

but as i already explained most private landlords wont touch DSS recipients
with a barge pole as there have been innumerable problems with them. I have a friend who was burned precisely because tenants were in receipt of housing benefits as they are about to be now ,except in his case they refused to pay him and the bank ended up pulling the plug on his loans, the very bank who encouraged him to take them out in the first place.
The reason I think the government has decided to revert to the old policy is because certain conniving landlords were claiming housing benefit they were not entitled to.
 
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la gran siete said:
but as i already explained most private landlords wont touch DSS recipients
with a barge pole as there have been innumerable problems with them. I have a friend precisely because tenants were in receipt of housing benefits then as they are about to be now ,except in his case they refused to pay him and the bank ended up pulling the plug on his loans, the very bank who encouraged him to take them out in the first place.
The reason I think the government has decided to revert to the old policy is because certain conniving landlords were claiming housing benefit they were not entitled to.

There are equally bad tenants who are not on benefit as well, just as their are very good DSS renters. That's business. Rough with the smooth. Landlords claiming where they are not entitled is fraud.
 
There are equally bad tenants who are not on benefit as well, just as their are very good DSS renters. That's business. Rough with the smooth. Landlords claiming where they are not entitled is fraud.
yes of course and dont i know that .My very first tenant was what is known as a professional tenant who after his initial 6 month deposit period ran out, simply refused to pay any more. Cost me a grand to get him and two months lost rent. He wasnt on DSS either .I was simply pointing out why the rules have been changed.The council don't want to get their hands burned by fraud and would rather landlords take the risk than them pursue a court case.Private landlords are very wary about DSS tenants and in any case if the take out mortgages for letting purposes one of the conditions of the loans is not to let to DSS
 
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Can't really understand how a subsidy drives up rents and, at the same time, it provides a minimum rent. Surely that is a contradiction?

The old system was based on 50th Percentile, so at most the house could rented through private authority/housing benefit is the middle priced one in the area. Take 10 houses as an example, from most expensive.

Rent £/week
1. £100
2. £90
3. £89
4. £85
5. £70
6. £65
7. £60
8. £59
9. £58
10. £55

With 50 percentile, a private landlord in an open market can choose to rent to DSS tenants, and with a quick talk with an estate agent figure he can charge £70 a week.

This means that private tenants will have to rise to that level if most/all landlords consider the minimum they can accept (and why should they not, someone is paying it even if its the state).

A year later and the maket looks like this
Rent £/week
1. £110
2. £100
3. £90
4. £85
5. £80
6. £70
7. £69
8. £68
9. £67
10. £60

Prices normalise around what the council/DSS will pay, and actual market price increase, because of the new virtual floor price of £70 which increased competition around this middle price range (also allowing 'better' property to demand more from non DSS individuals).
Now a landlord looking to rent in this year, will again go to the estate agent and because of the above the new 50th percentile is £80. Year on year this increases, effectively dragging the price of rental up because of state subsidy.
This does no one but a landlord any good, and £20bn+ on housing benefit up from a few £bn in early 2000's

The new housing benefit model is 30th percentile so the house at no 7 or cheaper, with the idea of both saving money and depress the rental market in the long term by returning true competition to the mid point. Hopefully year on year decreasing the cost of rent.

If your being cynical you could claim that rental/estate agents may be tempted to increase the average asking price, as they are the source of local knowledge councils use to asses what the above 50th percentile is.

*There is now also a maximum price per property for an individual/family, but this generally only affects London, which does have the a pretty dysfunctional property/rental market, but there are also international pressures here (beyond although aided by generous Housing Benefit).
 
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So long as no personal digs are intended, it's an interesting topic.
 
IronGiant said:
So long as no personal digs are intended, it's an interesting topic.

Its a long standing topic which was pertinent. I should also say for the record that I certainly don't imagine a socialist such as LGS would be one of the greedy ones, doesn't strike me as that kind of person at all despite our frequent references to his property empire :)
 
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