I’ve been having a debate with BendyGirl on Twitter, which I think is worth a more substantive answer than can be given in 140 characters.
The base-line cost of housing in the private sector is set by the Government: Benefit recipients whose rent is paid from Housing Benefit to private landlords. These people occupy the worst housing, and pay therefore the lowest rents. Landlords are revenue maximising rational agents, and the Government is a stupid customer. Therefore they charge the maximum the Government will pay for their shittiest flats.
If you have a better flat, you rent it out to non-housing benefit tenants for MORE than you could receive off the Government.
The purchase price of the least desirable flats is set by value of the rental stream that the Government will pay. Any better accommodation is priced at a premium to this, grossly inflated level, all the way up to 3-bed family homes.
Basically it boils down to this: There is no shortage of housing – most people have a roof over their heads. It may not be as nice as you’d like; this is because, as anyone who watches ‘Grand Designs’ will be able to tell you, planning laws are absurdly restrictive. This limits the amount of housing, and also limits the ability of people to make houses to suit their needs. For example, where I live a man built a house with a ‘tower’ on one corner. This became and still is, the most complained about building in the town, even though the centre of the town contains a 60’s concrete monstrosity. The “tower” contains the wheelchair-using owner’s lift – He’d had the house build around his needs, and his travails with the planning authorities were legendary. He was rich enough to win his legal battles and build a big, nice house suitable for a disabled person.
Everyone else has to make do with an identikit ‘executive’ house on a Barratt estate, and even these are expensive. The affordability of housing is the problem because the Government acting as a stupid customer on behalf of the poorest distorts the entire market. If you cut housing benefit, the same flats will be occupied by the same people because no-one else wants them. The cost of this is borne by slum landlords, who get less rent for the same flat.
Anyone going to weep for them?
Thought not. The answer to Britain’s housing problems is to phase out Housing benefit entirely, (and 71 other benefits too) and replace it with a smaller number of payments to individuals, replacing direct payment to Landlords. True, some people will spend it on smack, not rent, but that’s their fault as individuals, eh? What’s true of private tenants is also true of council tenants. The Government should get out of housing provision entirely. Instead of subsidising slum landlords’ jetskis on the Costa Del Sol, and making everyone else pay through the nose for shitty little breeding hutches, we’d actually be helping the poorest. Second we need to relax (not remove, relax) planning regulations, and assume that people building houses on a plot of land are rational. That way, there might be a few more desirable individual houses on the market and one or two fewer shitty estates of endless Barratt breeding hutches.
http://bracken.uk.com/wp-content/uploads/2017/07/logo-2.png00Malcolm Brackenhttp://bracken.uk.com/wp-content/uploads/2017/07/logo-2.pngMalcolm Bracken2010-08-04 09:29:002017-07-21 01:44:09How Housing benefit has harmed us all