This recent debate about housing benefit has been explosive, with anger and froth expelled by both sides of the debate. And with Christmas coming, I can’t help feeling that there are many out there whose approach to housing the poor is somewhat Scrooge-like. ‘Are there no prisons? Are there no workhouses?’ they are almost asking.
Housing benefit reform is a tricky beast, no doubt, as the most outrageous (but numerically few) examples of, say, unemployed immigrants getting £1,000 a week to live in Notting Hill have riled many, myself included. But it’s worth asking the question why are so many people in need of financial aid to pay the rent in the first place? It is because of a simple word: scarcity. The shortage of affordable homes has pushed millions onto waiting lists and into paying private rents in cities that are expensive precisely because of a dearth of supply. This lack of new homes creates housing benefit claims. Punishing the claimant for this situation is not just putting the cart before the horse, it is blaming the horse for being on the wrong side of the cart, and then giving it a kicking just for good measure.
The number of people on housing benefit, and the £21 billion we all pay for it each year, is a consequence of two generations of opposition to new public housing. Like the argument that we must ration council houses for the very worst off only, capping housing benefit is essentially an argument about re-arranging deckchairs, about reacting to scarcity. It seeks to reduce demand, when we need to increase supply. The answer for the right wing is to blame those who are poor for their status, and to find new ways to make them compete against each other for declining resources. The socially progressive way, the Liberal way, is to build more housing.
Rather than caps, and cuts of 10% merely for being unemployed, what we need is a new NHS. A National House Building Scheme. A neo-Jerusalem of public works, built by the people, for the people. I will admit to an unfashionable adherence to Keynesian economics here. If we borrow to build, if we put to work the thousands of people in an sluggish construction sector (which, it should be noted, accounted for half of the economy’s GDP growth in the last three months), we keep them off benefits, create jobs and tax revenue, and ease the crisis for those at the bottom, while expanding the choices for those who want to buy.
It can be done. The economics support the moral choice that we must make. It was in housing that we saw a credit bubble burst all over the world economy, it is housing that can provide our industry with a way out recession.
But we mustn’t also recreate the mistakes of the past – the isolated suburban estates and the brutalist block-built disasters. As Bevan said “we shall be judged for a year or two by the number of houses we build, we shall be judged in ten years’ time by the type of houses we build.” We have the knowledge and the expertise in Britain to make the new successful communities of tomorrow. We are the inventor of the Garden City, and the New Town Development Corporation. We have world class architects and urban planners who are in demand for projects all over the globe. We have the knowledge, experience and enthusiasm to do it, and to do it right.
The private sector must be a part of the solution too, of course, but it will never be the only solution. Thatcher said that the private sector would expand to fill the space left by a retreating public sector. The Chancellor today says the same. But this didn’t happen with housing when the state stepped out in the 1980’s, and with a planning system in limbo, the chances of the private sector doing so today are slim at best.
Even in this age of austerity, we have an opportunity to do what the housebuilding dreamers in the 1940s and 50s tried to do in their own austere, rationed age. We can create jobs, reduce suffering, and empower our citizens to make a better life for themselves. We have the skills and we have the knowledge. We don’t need new ways to slice a smaller pie. We don’t need to accept scarcity. Get out there and tell your MP you won’t stand for it anymore, and get them to promise to solve this problem, not by punishing HB claimants, but by building enough houses so that this problem doesn’t arise in the first place. Well, what are you waiting for?
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62 Comments
Thank you, you got to the nuts of the issue; Housing Benefit is expensive because rents are far too high. Rents will only fall if supply increases.
The cap is somewhat of a smokescreen, the real cuts to benefits are not being debated because everyone is using language that is far too emotive about cuts that will hit only a few of those on Housing Benefit. The to cut to the benefits of 936,960 of the 939,220 local housing allowance claimants seems to pass too many people by.
the question is rather where to build?
the scarcity and price of housing is in great part due to the scarcity of space, at least in places where people want to live (and where work is available).
the debate about HB in London is that it will push the poor further out. But it is further out that there’s space to build, so just building will not solve this at all, properties close to work and social centres will still be more in demand and therefore more expensive.
The possible solution is to replace low density with high density housing, but families want to live in houses not flats, and that’s even more true in Britain compare to other countries.
the reasons that housing is expensive is:
low interesr rates
more people needing housing due to more people living alone and immigration
controls on where housing can be built
If we really want more housing we should relax planning controls. But of course we won’t because it is electoral suicide.
Close doesn’t have to mean distance on a map. Building new, faster transport routes increases the amount of space within reasonable travelling time. We need more housing in combination with more public transport.
Last Thursday you said the solution to the problem was to extend broadband access and build high speed rail all around England.
On Friday, you said the solution was to build more affordable housing.
Today, you want to embark on a National House Building Scheme.
( I presume you discovered that over 90 per cent of the country can already access broadband)
Essentially, there is sufficient housing stock in the UK. The problem is that the jobs are in one one place, and housing is in other places, which is why housing benefits exceeding £20,000 per year are being paid in London and outer London.
Yes there needs to be more affordable housing – at the moment there’s a two-tier structure with very low rents of council housing and higher rents for private housing and woe betide you if you have any substantial savings.
The real problem is a LONDON PROBLEM. Until we disperse economic, cultural and political power across our country – I mean REALLY do it – not just say create more public sector jobs in Newcastle but actually provide a level playing field whereby the cheaper house prices are a catalyst for companies to HEADQUARTER to another part of the country then the situation will still carry on.
I’ve said all I want to say on this particular angle on my blog:
http://liberalrevolution.wordpress.com/2010/10/30/lib-dems-must-keep-the-cap/
At last a sensible article, that gets to the core of the issues.
Thank you Dominic Curran.
Hopefully this thread can be discussed sensibly without people resorting to personal insults.
Or arguments based on what would the other party do.
We where promised a new kind of politics. I remember all 3 of the major parties saying there where area’s of politics where all 3 parties should “work together”
Surly housing and the shortage of affordable housing, is an area where everyone should come together.
Hopefully posters on here can set an “example” on here to government and show that people can “come together” to put forward idea’s, Rather than resorting to a Political Scrum and kicking one another in the crotch constantly.
Up in Manchester new house building is occurring on both urban and (inner) suburban brownfield sites; not sure how AFFORDABLE the housing is, but there is clearly scope to build without expanding onto existing green spaces, or “outward” into the equivalent of green belt . Find it difficult to believe same is really NOT possible within Greater London somehow.
Re replacing lower with higher density housing, I remember years ago in the Sydney northern suburbs that there was a trend of developers to buy up whole (slightly dilapidated) 2-story terraces, pull them down, and erect 3-4 story flat developments to increase occupancy on the site. I know families want houses-not-flats, but at least this kind of solution avoids the tower block problem. Of course, this kind of thing also tends to be unpopular with local residents in the better preserved terraced streets next door…
John
How will forcing people on housing benefit out of London “disperse economic, cultural and political power across our country”? Surely all it will do is disperse people on housing benefit.
________________________________
“If there is hope, it lies in the trolls.”
I still can’t get away from the fact that this is simply the first step into allowing the regions to compete properly with London.
No one answers the question: `where and who are these people that can afford double the average wage to pay for rent?` either it’s because of differing rules on capping – In Manchester and Stockport there ARE HB caps as an insurance against runaway rents that would happen in the world of a non-capped HB. The fact that Labour allowed their friends in London not to have to choose between Lewisham and Lee Green is part of the problem. The other reason has to be that London is an International city and we have the same old `chicken and egg` situation whereby its prestige attracts more wealth that sucks in more low-paid workers that have to have an HB subsidy. Until that `cycle of disfunction` is tackled we are going nowhere with this debate and the cap has to stay or get even lower.
My premise is that if there are not the people on 50k to fill every terraced house etc then it must mean that rents will fall. One wonders how much all this is to do with rich Lefties (and their landlord friends) chumming up with Ed Miliband to provide terrible headlines when really all that’s going to happen is that rents will fall to keep in with the cap. Of course, if that happens the cap can be reduced even further as will house prices and rents.
@Matt – unfortunately the genie was pulled out of the bottle partly under Thatcher and then by Blair/Brown – house prices were allowed to spiral out of control and now any party that has policies whereby house prices drop over 10% will pay a heavy price at the ballot box. The Left’s demonisation of the Lib Dems proves that even if they somehow forced a system whereby an average house was worth 4x an average workers salary in an average area they would still find some way to punish them – because they’re not Labour. Saying that it would be an interesting experiment!
I think the 3-4 story flat builds are the way to go. These properties can have a small communal garden area, could be ideal for some families and install a better sense of community, rather than high tower, eye sores that everyone despises.
I also fail to see what is so wrong with some prefab houses.
They can be manufactured in warehouses, great for industry and jobs, and then assembled by the building trade on site, Creating more work in the labour market.
They are also as a rule, cheaper to build than the standard bricks and Mortar, And a lot quicker to put up.
Prefab does not have to mean shoddy and unfit for purpose Sheds.
They could put a huge dent in the shortage of affordable housing and create a wealth of jobs in under 12 months, if the Government put their minds to it.
Part of the reason for high housing prices is decades of migration to London from the rest of the country. This is partly because of the closure of industries that typically located out of London and partly the centralisation of employment to the capital. The solution is not solely building more affordable homes in central London but also in moving jobs to where the people, houses, roads and water supply is. All things the south east is short of.
“the right wing is to blame those who are poor for their status, and to find new ways to make them compete against each other for declining resources. The socially progressive way, the Liberal way, is to build more housing”
and the Govt of which you are a part if following which course?
There is no shortage of building land – major developers are holding onto hundreds of thousands of acres in lieu of the day when they can build on them. Granted, some of this land will be green belt and so on, places where we shouldn’t countenance building, but the odds alone state that there must be tens of thousands of acres suitable for building. What it needs is the political will and funding to make it a reality.
If we really want more housing we should relax planning controls. But of course we won’t because it is electoral suicide.
I wonder about that, SMcG.
I gather that New Labour tried to insist that new developments included a lot of cheap houses. Councils were effectively told that they would get a lot of new poor people who placed a strain on local services, and could not afford to pay much council tax. Residents near the proposed development were effectively told they would have to take the risk that they would find themselves living next to a nice new slum. So naturally they resisted.
So nothing ever got built.
Left to themselves, the developers could offer to build big expensive houses for people who could afford a lot of council tax and not require much from the council, and be no threat to the property values of their neighbours.
Which would make it a lot easier to get planning permission.
Some rich people would move into the new houses, sell their previous homes to slightly poorer people, and so on down the line. Taking rich people out of the market for existing houses would cut prices for everyone else, as surely as any centrally planned diktat from Whitehall.
Now this is all a theory, but it would explain why house prices went up, and house building went down, throughout the New Labour era.
And centrally planned good intentions having unintended negative consequences would be entirely typical of the former government.
@Colin Green
Correct!
Those who want to see more house-building to solve the problem of high rents in London are similar to those in America who see the solution to rising gas prices opening up more oilfields. The short-sightedness of the mantra “Drill, baby, drill,” is being repeated in the UK with, “Build, baby, build.”
It’s narrow-minded to only address the supply question. Look at the causes of demand!
@matt
“I think the 3-4 story flat builds are the way to go. These properties can have a small communal garden area, could be ideal for some families and install a better sense of community, rather than high tower, eye sores that everyone despises.”
It’s probably the best viable option, but I wouldn’t pretend it’s ideal. Most families would much prefer to have a private garden. But, when land is so expensive, and the political difficulties of building on green space are horrendous, I don’t see any better alternative in places like London.
One under-discussed issue is the coalition proposal to raise council tax rent for new social housing tenants. I’ve not discussed this in detail, so I’ll be interested in feedback from others. But, tentatively, the following is how I see it:
The downside:
– Changing to a 80% rent levels is only politically possible because it doesn’t apply to existing tenants. But excluding existing tenants will mean they have a huge disincentive to move, unless some complex scheme can be introduced to allow transfer of social housing rights from one authority to another.
On the upside:
– For people on low income, the 80% rent will still be covered by housing benefit. But for people on higher incomes, they’ll pay closer to a market rent, which is surely only right. New tenants who start earning a higher income won’t have such a big incentive to stay in social housing, so, if they move out, that’ll free up some properties for people who really need them.
– At present rent levels, it’s very hard for housing associations to get finance for new social housing. With higher rent income, it’ll be a lot easier for housing associations to fund new build.
– If this new build comes from housing associations, right-to-buy won’t apply. So it will add permanently to the pool of new housing stock.
– If this leads to more social housing run by responsible land lords, like housing associations, and less by exploitative housing sharks, that must be a good thing.
But, of course, the amount of new build will only gradually improve the situation. It will take many years before it makes a serious dent in the shortage of social housing.
The problem is housing. The solution seems to be to blame the poor and make sure that language used about them is disparaging and cruel. How long will this go on? Is no one concerned about the dismantling of structures almost willy nilly with a careless ease that shows no care. Is power so desired that anything can be justified in the pursuit of it. The ‘leaders’ of the liberal democrats have shown that they are prepared to do anything to stay in power.
George W. Potter
“There is no shortage of building land – major developers are holding onto hundreds of thousands of acres in lieu of the day when they can build on them. Granted, some of this land will be green belt and so on, places where we shouldn’t countenance building, but the odds alone state that there must be tens of thousands of acres suitable for building. What it needs is the political will and funding to make it a reality.”
I think you are wrong there, George.
They very likely are holding a lot of Green Belt land (or at least options to purchase), but very little non-green belt land. That’s certainly the case in my own part of the country.
I can’t help feeling that Eric Pickles’ policies in the area are likely to prove counter-productive.
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Left to themselves, the developers could offer to build big expensive houses for people who could afford a lot of council tax and not require much from the council, and be no threat to the property values of their neighbours.
Which would make it a lot easier to get planning permission.
Some rich people would move into the new houses, sell their previous homes to slightly poorer people, and so on down the line. Taking rich people out of the market for existing houses would cut prices for everyone else, as surely as any centrally planned diktat from Whitehall.
I have long argued something similar, ad.
What we need to do as a country is build more houses, not nesessarily more “affordable” ones.
The reason that there are not enough affordable houses (and there are not) is that, in terms of supply and demand, there are simply not enough houses.
Building any houses at all (whether expensive or cheap ones) will make housing more affordable, by working down the chain, as you pointed out.
I broadly agree with the position taken in this post. A couple of things strike me.
First, Robert Skidelsky, Emeritus Professor of Political Economy at Warwick, recently described George Osborne as economically illiterate for his reliance on the monetarist solution of quantitative easing to deal with the aftermath of overzealous fiscal contraction. I think the same can be said about the proposals to change housing benefit.
It seems like these proposals are brought forward without any real understanding of either the nature of supply in the private rented sector, of housing demand, or the way in which the housing market is intimately connected with a broad range of other important dimensions of policy, economy and society. The idea that they will save much money in the long run seems highly suspect to me.
The comment by @TheBigotBasher is absolutely right – the impact of the change to the LHA is going to prove of so much broader significance than the £400/week cap. The vast majority of people who receive the LHA are not living in overgenerously funded accommodation. Quite the opposite. These proposals are going to reduce some households living in very modest accommodation to an income post-housing costs that is below that which we as a society have previously deemed the minimum required for survival, if they want to stay in their current homes. We might agree that the overall cap is sensible. But it is a bit of a sideshow. Many of the changes are just spiteful.
I have written a bit more about the private rented market, and the regulation of the market, here: http://bit.ly/aSskRb
Second, we need to look at these issues in relation to a broader understanding of spatial development not just within the UK but at a European level. The planning regime established in the UK after the second world war was seen as a complement to robust Regional Policy. But the history of Regional Policy is not one of conspicuous success. Rather even during periods of active Regional Policy it could be characterised as fighting a losing battle against economic concentration, a process accelerated by European integration. My reading of the regional economics literature is that it is recognised that there are centrifugal forces at work in the spatial economy that should in theory overcome the friction of distance and allow economic activity to decentralise, but that on even the most optimistic reading this is a very slow process. Further concentration of economic activity is more likely over time horizons relevant to policy. There are economic benefits to concentration that are not easily discounted or counteracted. Years ago ideas such as the Euro-banana had some prominence – European economic activity will progressively concentrate in an arc running from London through France and Germany down to Northern Italy because that is the most efficient spatial location for it.
I am not at all against exploring how one might effectively disperse economic activity to relieve pressure on the SE of England. But I just think that it is important to recognise that this is a task of significant magnitude, for which there is limited precedent.
My local Council has £8m invested from the sale of Council houses that they are not allowed to spend on new properties.
1. My local Council has £8m invested from the sale of Council houses that it is not allowed to spend on new housing
2. Who says there are no empty houses – try Newcastle, Liverpool or Middlesborough.
3. The Isle of Mull off Oban is having to shut two primary schools due to lack of children to fill them. There is a large number of holiday homes, let for £350/week in the summer and shut in the winter. I’m sure a lot of the owners would jump at the chance of letting them all year round. Mull is incredibly beautiful and a childrens’ paradise. They can wander anywhere, chase the stags, throw stones into the sea and get soaking wet. Offer some of these poor Londoners the chance to live in an ideal place like Mull. Oh and by the way there are plenty of summer jobs, filled at present by eastern Europeans.
The current LHA in my area is currently £138.08 for a 3 bedroom property.
However, with the recent announcements, the changes that housing associations will be able to charge up to 80% of the market rates. it has been reported that 3 bedroom council Houses in my area could be charged at £200 a week.
If council’s and housing associations, raise their rents to 80% of the Market Value, Private Landlords and letting Agencies, will not be content with only receiving 20% more rent that Social Housing. They will inevitability raise their rents.
This will make even more housing unaffordable, drive up rents and reduces the quality of available housing.
As a result the LHA will have to rise, costing more money to the public purse.
These policies do not make sense.
It is not just a case that, the policies will make London more unaffordable, it will drive rents and HB claims up, right across the country.
Let’s consider a few potential scenarios, in each you are a landlord, owning vacant property in the centre of London:
1) A working family are willing to pay £250 a week, as are a family on benefits; who do you rent to and how much do you charge?
2) A working family will pay £250 a week, while a family on benefits will pay £400. Who do you rent to and how much do you charge?
3) A working family will pay £250 a week while a family on benefits will pay any price with no cap; who do you rent to and how much do you charge?
Sometimes it’s not supply, nor demand, but the failures of the market that explain how you create and solve an issue.
@Andrew Tennanf
“2) A working family will pay £250 a week, while a family on benefits will pay £400. Who do you rent to and how much do you charge”
That is a really unfair thing to say.
You suggest that a family on welfare are able to come along and “willingly” offer/barter with a Landlord to pay more money for rent than a working family.
That’s not how it works in the real world and is painting an unfair picture towards people reliant on HB
2) A working family will pay £250 a week, while a family on benefits will pay £400. Who do you rent to and how much do you charge?
That’s not the way it works Andrew.
The Local authority will only pay housing benefit to an amount that is considered a reasonable rent for your area. If your rent is higher than the average market rent value then the council will only pay up to the amount of the average market rent. You have to find the short fall yourself.
So , If a working family would pay £250 in rent for that property then you would only be able to get £250 housing benefit (maximum) for that porperty.
No council will pay a landlord £400 for a property that is only worth £250 on the market.
I really don’t understand how people think it is so easy to rent on benefits. It is almost impossible. Private landlords do not want to touch people on DSS, The number one web site for finding a rented property in London has just 9 properties for the whole of London
http://www.dsslondon.com/?gclid=CJuwhrzz_aQCFV_92AodrH0NhA
There really is a distorted perception of how hard it is to find somewhere to live on benefits. Even my tenancy agreement states that I must be employed. My Landlord (a well known letting agent) wouldn’t let me renew my tenancy if I lost my job.
The number one web site for finding a rented property in London should read the number one web site for finding a DSS rented property in london.
Andrew, I just picked a council at random to illustrate the way the fair rent system works…
The Rent Service (TRS) is now part of The Valuations Agency and one of their duties is to carry out fair rent assessments for council’s that are responsible for administering Housing Benefit. In such instances, the council will send various information regarding the accommodation you rent including the following:
•The amount of rent you are charged.
•The age and number of people who love with you.
•The type of accommodation you live in.
•Your tenancy details.
•The number of rooms in your accommodation and those that are used by your household.
The Rent Service will take this information and make comparisons with other rents charged in the area and the rent being charged for similar properties in other similar residential area’s. Using all of the data available to them they will make an assessment of a fair rent for the type of property you are renting and of a fair rent of a property that your circumstances needs. They may decide to restrict the amount of Housing Benefit we can pay if it is decided that the property exceeds your needs, i.e. it is over accommodated, or if the rent that you are being charged is higher than other comparable rents.
http://www.bromsgrove.gov.uk/cms/advice-and-benefits/benefits/benefits-faqs/determining-housing-benefit.aspx
A landlord may have substandard property at the least desirable end for a given area. Their properties are priced cheaper than better properties in an area, but higher than the actual value at which an individual renting privately would willingly pay; provided they cost less than the median price for the area there is no reason why, given sufficient availability of DSS tenants the price should not trend upwards to the median value.
matt
”These policies do not make sense.”
I’m not altogether sure that some of those figures make sense.
You’re saying that, for a 3 bedroom house in your area:
1. The median rent is £138.08 per week, but that
2. The average rent is £250.00 per week (= £200 x 100/80)
Those two figures are clearly incompatible.
Also, you are incorrect in your supposition that private landlords will “inevitability raise their rents” if councils and housing associations raise their rents to 80% of the Market Value.
Of course this applies to new lettings only, but If this involves new properties being built and made available by councils and housing associations (as is intended), then it will result in lower rents.
but higher than the actual value at which an individual renting privately would willingly pay
See above…
The council will not pay rent that is higher than the actual value an individual renting privately would willingly pay.
Period.
“It was in housing that we saw a credit bubble burst all over the world economy, it is housing that can provide our industry with a way out recession.”
Erm, it got us into this mess so somehow it will get us out of it? That doesnt make any sense.
@simon Shaw
“I’m not altogether sure that some of those figures make sense.
You’re saying that, for a 3 bedroom house in your area:
1. The median rent is £138.08 per week, but that
2. The average rent is £250.00 per week (= £200 x 100/80)
Those two figures are clearly incompatible.”
http://www.norwich.gov.uk/webapps/atoz/service_page.asp?id=1431&pid=1014
No I am saying that the Local Housing Allowance (LHA) – rent levels for Norwich is £138.08 a week for a 3 bedroom house.
“From 6 April 2009, new rules for payment of LHA apply to anyone who rents their home from a private landlord, and who claims, and is entitled to claim, housing benefit.”
LHA is based for private housing not council housing or housing associations.
At the moment the average cost of a 3 bedroom “council House” in Norwich is £80 a week.
In the proposals for councils and housing associations to be able to charge 80% of the market value. It is now thought that these rents for new tenants would rise to £200 a week
http://www.eveningnews24.co.uk/news/fears_over_norwich_council_rent_hikes_1_686950
if councils and housing associations raise their rents for a 3 bedroom house to £200 a week
Private landlords and letting agencies will raise their rents.
Either way the housing benefit bill is set to rise across the country as the government is set to allow authorities to charge 80%.
“Those two figures are clearly incompatible.”
Except, as has been pointed out elsewhere, the LHA is assessed using averages over – for example – a whole county. If his area is an expensive one the local average may be higher than the LHA.
Ah – actually, looking at the article, the £200 figure seems to be for a four-bedroomed property.
Reading the Norwich Evening Post article does rather give the game away.
“City councillors warned that would lead to real financial hardship for many families in Norwich …. under government proposals unveiled in the comprehensive spending assessment, they could have to pay more than £80 a week for a one-bedroom flat and just over £200 a week for a four-bedroom house.
Brenda Arthur, the Labour-run city council’s cabinet member for housing and deputy city council leader, today said: “I think this is just horrendous.” ”
Giveaway words:
“Labour-run”
“City councillors warned”
“they COULD have to pay more”
@Anthony Aloysius St
damn your right there, sorry missed that 🙂
But the Principle is still the same.
If Rents for a 4 bedroom Council house rises to £200
private Landlord Rents and Letting Agencies will Raise with them.
LHA would have to rise to pay for the increased rents in the Private Housing Sector
Resulting in higher housing benefit claims, from people in bothe social and private housing.
The Policy still doesn’t make sense
Admittedly, the Housing benefit Caps, should not effect the people of Norwich
But the 10% cuts to HB for anyone claiming JSA for over a year would
The government want’s to cut the Housing Benefit Bill, but raises the amount Authorities can charge new tenants.
That will bring the bill down how exactly???
@Simon Shaw
Giveaway words:
“Labour-run”
“City councillors warned”
“they COULD have to pay more”
What’s that supposed to mean.
And do be careful what you say here.
Simon Wrighte only took Norwich south with a 300 majority from Charles Clarke, and considering the feelings of discontent towards Liberal democrats and the coalition government at the moment in Norwich ( yes they got hammerd at our local elections, last month, he could well do without any further headaches im sure
go to https://lha-direct.voa.gov.uk/Secure/LHARateSearch.aspx?SearchType=LA
To check LHA rates for any district.
I published a paper on how to get NIMBYs to vote for more development – you can find a short version if you google “Davey Leunig” at ft.com and a long version at Centre Forum. It isn’t rocket science…
matt
” What’s that supposed to mean.”
Sorry, isn’t it obvious?
Your erroneous figure of £250 per week as the local market rent seems to have been based on Labour councillors telling the local press what people “could” be paying. Certainly doesn’t sound very reliable to me – at least as reported.
“Admittedly, the Housing benefit Caps, should not effect the people of Norwich”
@matt: They won’t, but remember that the caps are just one part of the changes to Local Housing Allowance (to be more specific; this is the part of Housing Benefit that applies to those in the Private Rented Sector (PRS) rather than those in council housing and housing associations). Remember that almost every claimant of Local Housing Allowance across the country will be affected by the changes (to be specific, the figures from the DWP show that 936,960 out of 939,220 total claimants will lose money under the Coalition proposals).
Continuing your example of Norwich, the figures show that every claimant of Local Housing Allowance in Norwich will be affected, losing the following amounts on average:
-1-bed: lose £10 per week
-2-bed: lose £10 per week
-3-bed: lose £12 per week
-4-bed: lose £16 per week
-5-bed: lose £22 per week
Another set of figures that’s interesting is the comparison between what percentage of Private Rented Sector (PRS) accommodation is available to claimants now versus after the changes have happened. For the Central Norfolk and Norwich Broad Rental Market Area, this is projected to drop from 58% to 34% (mainly of course due to changing from calculating LHA rates using the median to the 30th percentile from October 2011).
http://www.dwp.gov.uk/docs/impacts-of-hb-proposals.pdf
@AndrewM
Thanks for that info.
That’s scary stuff, looks like i need to start shouting louder about these cuts, than i already have done. 😉
Thanks to everyone who has commented on here. I see a lot of the same names as on other housing threads in the past week – the enthusiasm is great but i hope every housing article doesn’t develop solely into a technical analysis of housing benefit calculations every time the issue is dicussed – it’s a hugely important issue but there are other facets to to housing than HB rates.
@Sandra F – the issue of where and how to build new homes is key. I believe that, while many may want houses and gardens, the amount of land needed to satusfy this demand is too large, especially in the south-east. We will have to get used to living in flats, like they do in continental europe and in scottish cities, too. Our house-and-garden expectation is exceptional in Europe. As long as the flats are large and in well-planned communities, they can be lovely.
@SMcG – as i’ve said before, I don’t think we need to change the planning system. Sure, planning controls stop us building on the green belt, but there is a great value to the green belt, and to other planning controls. We can actually satisfy all the south-east’s housing need by building on brownfield land in the Thames Gateway (not that i would suggest doing so, I’m just saying by way of example).
That new housing need not be the slums of tomorrow, either. As Andrew Suffield says, if housing is built with good transport links, and i would argue with other social infrastructure too, it can be great. Hence my article’s reference to our great history of successful urban planning.
@ Richard SM
(sigh) i hope you didn’t misread my comments as suggesting that all the things I’ve said need to happen are mutually exclusive. We do need to rebalance the economy away from the south-east, and infrastructure is part of that. It may help you to know that i was talking about the sort of broadband that industry is saying we need to compete effectively internationally: http://www.broadband-expert.co.uk/blog/broadband-news/poor-broadband-provision-leaves-uk-lagging-behind/779898. We need more infrastructure investment in the regions and more affordable housing where it is needed now. You try telling a family in unsanitary overcrowded accommodation in Hackney that everything will be alright once the economy has re-balanced away from the south-east. That won’t wash (and nor is it entirely true). We need to meet their needs, and others’, NOW. As i say in my article, the state needs to do it – we can’t rely on private investment to do so, as it has failed.
@ John, Matt, Austin – agreed.
@ Joe – the wrong course, I’m sorry to say, at least in part – they are committed to building 125,000 new affiordable homes (net) until 2014 – my issue with that is that they are making social housing tenants pay for it through doubled rents and then charging near market rents for them. It’s not really affordable housing then, is it? Plus the number is a drop in the ocean compared to what’s needed.
@ George – i entirely agree. There is the land, even in the south-east (to build flats, at least). What we need is the political will.
@ Richard SM – the causes of demand, in my view, are twofold – increasing population and household formation, and all the credit flowing round the economy in the past ten years. We can do soemthing about the latter, but the former is trickier. We can do something about immigartion controls, but how you deal with people living longer, and alone, and apart once divorced, i don’t know. I think you have to simply deal with it through increasing supply. This means i agre with Simon Shaw on the issue.
And Alex M – you sound like an urban planner. I like it. Regional policy has not been an enormous success in the UK in the past, not least because jobs were moved by the state, wherease what needs to happen is for the state to build the infrastructure and for the jobs to migrate out themselves as it is spatially more efficient. High Speed rail linking Canary Wharf to Leeds in 1h 40 mins, for example, will help in this process.
There are two issues here:
1. Free housing, and
2. Land use
Free Housing
I don’t think that there should be any affordable housing at all. People should not expect others to build them a house, pay for it to be built and then pay or subsidise their rent. That is what affordable housing means. You get a roof over your head at someone else’s expense.
Land Use
Government assumes that there is:
1. An inevitable and limitless demand for housing, and that
2. This must be satisfied, and that
3. Land must be sacrificed to this perceived need, and that
4. There is no alternative
There is also the underlying assumption that the sole purpose of land is as a resource on which to build.
This problem would go away if demand for housing reduced. It would seem logical therefore, to institute policies that encouraged that reduction in demand. It seems equally logical that the only way demand will be reduced is to reduce the population. Governments need to devise policies to limit population growth and to reduce it. A reduced population would reduce the demand for housing. Instead they talk about sustainable development.
“Sustainable Development” – what a joke. The suggestion is we can have it both ways: plenty of growth but all done in a benign and environmentally friendly way. The term ‘sustainable development’ originally meant ecological sustainability. It is now used to mean something else that undermines the very concept of ecological sustainability. By ‘sustainable development’, they mean economic development and the sustainability of human populations and their expansion across the landscape. They tell us that if we plan development properly, both the human population and the environment will benefit. It isn’t true.
The political pressure is on to grow the economy. Everything is to be done to provide more jobs and accommodate the human population. Long-term population growth, large-scale housing expansion and the supporting infrastructure needs that go with it would swallow our landscapes and lower the quality of life. Yet most politicians call for more housing supply to satisfy demand.
These crackpot plans follow an old pre-climate change model of “how the world should be” and “we know what’s best for you”. That model is as insulting as it is discredited and is based on an unwarranted assumption that never ending expansion and growth is a “good thing” and what the world wants and needs. Wrong. Blindly and stupidly wrong. Are we to be expected to sacrifice swathes of rural land to expand an ever-increasing population? That would be ridiculous and completely unacceptable.
There will be no solution to the housing problem in the UK unless politicians accept that the only way forward that does not eat up the land is a curb on population. Population has to stabilise sometime, better still reduce, and the best time is now.
Population Reduction Measures
Start with Child Benefit. Give money for the first child but none for the second. Have a third child and the money for the first child is taken away.
When a woman reaches forty lower her tax substantially if she has only had one child or no children. Reward her.
Pay a substantial amount of money to both men and women to be sterilised after one child. Pay more if they are sterilised before they have had children.
Ensure that people who have more than three children are be taxed at a higher rate.
Promote a culture that is environmentally aware and that sees over-population as not only a problem but something to be ashamed of.
Etc, etc.
Sterilised!
Either you are having a joke or I would suggest that you would find yourself more at home in China!
I don’t think that there should be any affordable housing at all
Your point of view is so right wing that it is in danger of slipping over the dividing line and becoming part of the extreme left.
LDV does attract some extremely concerning opinions, although I have my doubts that the above was written by a Liberal Democrat ?
“I don’t think that there should be any affordable housing at all. People should not expect others to build them a house, pay for it to be built and then pay or subsidise their rent. That is what affordable housing means. You get a roof over your head at someone else’s expense”
What do you suggest we go back to living in a mud huts and caves?
“Pay a substantial amount of money to both men and women to be sterilised after one child. Pay more if they are sterilised before they have had children.”
Who will be paying taxes and creating wealth to supporting your Children and your children’s children, when they reach retirement age?
You sound like you would prefer civilisation to turn the clock back 200’000 years.
I am not sure these comment even really warrants a response
I was wondering when a Green Party supporter would contribute their completely economically illiterate population control/reduction plans
@Dominic Curran – I’m not sure I take that as a compliment!
All I would add is that you cannot take faster transportation as necessarily implying decentralisation of economic activity. In relation to shopping facilities, for example, it can lead to concentration. So in your example fast rail to Leeds may see residential relocation without employment relocation. It makes longer distance commuting into London more practical for more people. That may have a spinoff for consumption expenditure in Leeds, but that isn’t going to be as powerful an effect.
I absolutely agree that it is important not to get lost in the detail and lose sight of the bigger picture.
And I’d agree with others that there have recently been some truly extraordinary views being expressed on this thread.
@tim leunig
“I published a paper on how to get NIMBYs to vote for more development – you can find a short version if you google “Davey Leunig” at ft.com and a long version at Centre Forum. It isn’t rocket science…”
Thanks. I’ve read the paper and it’s certainly a very interesting proposal. Has there been much public debate about it?
I can see possible issues, but that’s based on a superficial reading. Have you considered submitting a post to LDV, to provide a separate thread for us to discuss it?
@Tony Iveson
I take the opposite view. Within the country we already have a birth-rate below replacement levels. The reason why we’ve got an increasing population is due to new people from other countries.
At the risk of throwing this thread completely off-topic, 😉 I think that’s probably a good thing. We need young people to avoid serious problems supporting an ageing population.
There are so many Brownfield sites in my home town of Norwich it is ridiculous.
There is a shortage of affordable and social housing in the City.
In my own ward alone, there has been 2 brownfield sites that have sat empty for years.
There is an old Bally’s Shoe Factory, that has been used as a 2nd hand car Auction. It was due for Development, but the company has just been placed into administration.
I was not in favour of the development anyway, because instead of using the site for much needed affordable housing, It was going to be used to house a New Asda store, Hotel, and Sports Centre, Even though within a 2 mile Radius there is already a Tesco’s and a Morrison’s and a Asda Store about another 2 miles from these.
The local area has already seen the close of small businesses and 2 Newsagents, which can not compete with Supermarkets.
We also have a huge Site that used to be the local middle school, This school was closed down, against the wishes of the community and the local primary school is now used to huddle together all 4 to 12 year olds in 1 school.
The council, promised that they would build much needed affordable housing on the site, and instead it say empty for years, I think it is supposed to be a sports academy of some sorts now, And they are getting to use a Pretty big school as a changing room, and they have put a couple of tennis courts on the site.
If that is good use of Brownfield sites, then there is something seriously wrong with my local government.
How many more Brownfield sites are being used round the counties to throw up New Supermarkets and crap, that are not really needed, I am sure most locals would prefer to see more affordable housing instead.
@matt
“No I am saying that the Local Housing Allowance (LHA) – rent levels for Norwich is £138.08 a week for a 3 bedroom house.
“From 6 April 2009, new rules for payment of LHA apply to anyone who rents their home from a private landlord, and who claims, and is entitled to claim, housing benefit.”
LHA is based for private housing not council housing or housing associations.
At the moment the average cost of a 3 bedroom “council House” in Norwich is £80 a week.
In the proposals for councils and housing associations to be able to charge 80% of the market value. It is now thought that these rents for new tenants would rise to £200 a week
http://www.eveningnews24.co.uk/news/fears_over_norwich_council_rent_hikes_1_686950
if councils and housing associations raise their rents for a 3 bedroom house to £200 a week”
You are comparing the proposed LHA limit for a 3 bedroom house with the speculation of a Labour councillor about what the cost of a 4 bedroom house might be.
If the LHA for a 4 bedroom house in Norwich is £184.11 a week I struggle to understand how a council rent at 80% of market rate will be £200 a week.
@AndrewM
Are you saying that every LHA claimant in Norwich will lose out because of the lower LHA limit (i.e. every LHA claimant in Norwich is currently paying more than thr proposed LHA rates), or are you inluding the £15 top up?
If you include the £15 top up then, yes, a large proportion of LHA claimants will lose out, but not because of the new limits.
@ Dominic I generally agree with the main thrust of your article – that we need more accommodation to be built.
I don’t therefore don’t understand you opposition to new social hiusing being charged at 80% of market rents, as this is the mechanism through which new accommodation wil be built.
You have said several times that 80% of market rent is ‘not affordable’. What do you think is an ‘affordable’ level of rent?
@ Liberal Neil
‘Affordable Housing’ is a term that is generally accepted to mean ‘housing at below market rent’. Currently, that is generally around 40% of market rent levels in a given area. If you start charging double that, ie. 80% of market rent, it stops being affordable for the vast majority of people who don’t have high earneings. This is especially so in London where earnings and the cost of living are much more out of sync than anywhere else in the country.
What is ‘affordable’ on an individual level obviously depends on someone’s earnings and what they are prepared to pay for a particular home. However, in terms of housing policy, i would accept a definition of affordable that put rent at the current level, or around half market rent maximum. What i don’t accept is that if you are paying basically market rent – which 80% near-enough is – then you are in ‘affordable accommodation’. I don’t think making the poorest in society – ie tenants – pay for housing is right; we may as well charge the sick for healthcare and ask parents to pay school fees.
@Liberal Neil
“If the LHA for a 4 bedroom house in Norwich is £184.11 a week I struggle to understand how a council rent at 80% of market rate will be £200 a week”
Because LHA is only based on 50% of the properties in the area being affordable with Housing Benefit, This is to be reduced to 30% in April 2011
Remember LHA allowance, only applies to “private housing” not “social housing”
Council Rents in Norwich are charged at roughly 40% of the market value, I am not sure what the current rules are for housing associations. But both of these are set to rise to 80%
It is thought an increase to 80% will see 4 bedroom house from the council or housing association, could see rents increase to £200 a week “for new tenants”
If a 4 bedroom social housing is being charged out at £200 a week,
The Private sector will raise their rents even more.
I know this make no sense, but that is the whole point, these policies do not make sense
Social Housing is exempt from LHA
LHA is to be reduced to 3 in 10 properties being affordable
Some Social Housing will be more expensive than LHA Rates.
http://www.merton.gov.uk/living/benefits/changes_to_lha_april_2011_and_october_2011_a4_v2_nov_2010.pdf
From October 2011 The Government will reduce all LHA rates so that about three in ten properties for rent in the area
should be affordable to people on Housing Benefit rather than every five in ten
properties as now.
I have been getting Housing Benefit since before April 2008 could the changes
affect me?
Providing you continue to live in the same property and you don’t have a break
in your Housing Benefit claim the LHA rules will not apply to you.
Will I be affected by the caps?
The caps are most likely to affect people who are renting properties in central London
boroughs, which include Merton. If your weekly rent is more than the cap for the LHA
rate that applies to you, your Housing Benefit will be reduced.
The maximum allowance is for four bedrooms from 1 April 2011.
There is information available about the levels of LHA rates that might apply from 1
October 2011 based on current rent levels. You can go to the Valuation Office
Agency (VOA) website to get more information on this visit:
http://www.voa.gov.uk/LHADirect/lha-rates-england.htm
http://www.voa.gov.uk/LHADirect/Documents/LHA_percentile_rates_Nov_2010.html
They have provided the details for all cities and counties.
Open the Excel Document and you will see they have put the Current LHA at today’s 50th Percentile and then the figures for the 30th Percentile
LHA for the Average 3 bedroom family home, will drop from £138.08 a week to £126.58 a week
sorry the above post was in reference to Norwich.
Please note from the following Government website
http://www.merton.gov.uk/living/benefits/changes_to_lha_april_2011_and_october_2011_a4_v2_nov_2010.pdf
The following Text
The Government is planning to make legislation in November 2010 that will change
the LHA rules from April 2011 and October 2011.
This legislation is going to be passed “this month”
So if we want to make changes and oppose this legislation, that will unfairly fall on the poorest in society, then we must act and we must be heard, All of you, no matter what your party affiliation is
@Liberal Neil @Dominic Curran There’s a post imminent (tomorrow I think) that will most probably allow us to continue the debate over what constitutes “affordable” housing.