When a home becomes an asset all faith is lost

There is a great deal of coverage at the moment in the UK press about the Housing benefit reform proposals laid out by the condemnation. The focus for the right wing press is how it will control and contain outrageous rents being paid (predominantly in London) for those on income support to allow them to live in the kind of houses once only dreamed of by millionaires.They imply that there are a great deal of immigrant families living in 5/6 bedroom accommodation in the wealthiest of London's boroughs at a cost of £1,000 to £2,000 a week, a price many working within the capital could never afford. This may very well be the case in some areas but is it just the fault of those living in these houses? True they sort them out as desirable places to live knowing they would get housing benefit help to pay for it but was it not down to the local authorities who are elected by local voters to ensure value for money when allowing such extravagant claims.

The main trouble with rented accommodation is in my view caused by the actions of the previous conservative government which was compounded further still by the none action of the following Labour government.

When council house tenants were given the right to buy during the 1980's the thinking amongst most left wing groups was that perhaps the money from the sale of these houses could be used to build more affordable homes. Unfortunately that was not the case because they(the left) were not in power, No the conservative Ideal was to create a nation of home owners who would use their homes as collateral to borrow against and there bye swell the coffers of manufacturers around the country and of course they would all need to borrow money from the banks at extortionate interest rates to swell the ever growing banking economy. An off shoot of course was that a large majority of people would then become Middle class Tory voters.

On returning to power finally the Labour party continued to dismiss calls from all and sundry about the lack of social housing preferring to duck the question of rebuilding rather than take on the might of the bankers who would see it as an attack on their profits as with more easily available social housing what point was there for slum lords to buy properties for the rental market. Also, what chance of a growth in the value of current housing which was far from adequate when it came to numbers if more properties were made available to potential first time buyers.

An evil catch 22 if you like with those who had the money able to afford to buy whatever the cost regardless of interest levels and then charge rents accordingly not only to cover the cost of purchase but also provide a steady income.Meanwhile those who actually worked for a living were priced out of the market by slum-lords intent on bleeding the system dry. As the banks at the time were making profits and the majority of people were reasonably comfortable there was not much ballyhoo about rental prices but there was still a call from many outside of government for the replenishment of housing stock.

It was of course a shout which was never heard fewer houses were built driving up the price of the older properties much to the joy of home-owners and bankers alike, not forgetting Mr and Mrs slum-lord.

As we all know the bottom eventually fell out of the market for housing and banking although prices have not as yet dropped to where they should be in my opinion.This led to a call for the review of government spending and the row over housing benefit is now in full swing.

The condemnations actions however will in fact led ultimately to a higher cost in welfare benefits than it is today because of their flawed Fairness assumption. What they are proposing is a three tier step in the housing benefit.

First they will no longer be paying more than £400 a week to provide accommodation for any benefit claimant.

Second they will reduce the amount of housing benefit by 10% for any job seeker claiment after a 12 month period.

Third and most important they will allow/force local authorities to increase their rental properties to 80% of standard private rental accommodation.

The first thing to happen will of course be that those in too costly accommodation will either have to pay the difference from their income support or move out many will feel aggrieved and no doubt wish to start legal proceedings against their local authority possibly as far as the European courts costing millions in tax payers money as the councils try to defend what the government have decreed. After the 12 month period is over and the Job seeking benefit claimant is forced to pay extra from his/her benefit some will fall into arrears with their rent and councils will once more be forced to spend tax payers money on court fees for repossession again £millions could be involved. Third and most ironic! as the rents increase from 30% of average rental value to 80% the amount of working claimants falling into the benefits category for housing benefits will increase by 25% so costing local authorities even more money. Couple that with the amount of people who will still be unable to claim benefits but will still have to pay the added 20% rent so fall into arrears and are taken to court for eviction and we have a whole bucketful of money being squandered on lawyers and barristers not to mention the profits of the bailiffs.

Of course not much of this court action will be able to take place locally as this condemnation is also intent on removing many local courts to rely on one larger unit to deal with everything within X mile radius.

So what is the answer? personally I would spend rather than waste the amounts of money that in the future the government will have to give away in court fees increased number of benefit claims etc. I would start an immediate building programme of social housing on a scale as large as that in the 1950's using brown belt land(old industrial sites) Local councils would be able to charge and keep the rent on these properties with the provision inbuilt that until the rental income had covered the initial coast of build then they shall remain as social housing for rent.Half the rent collected would be put to building further housing after a half way period had been reached.

At the same time as the building of the social housing councils could and should give leave to build at the same time; private housing within the same geographical area.

As for those within London claiming what is perceived to be extortionate amounts of rent give them 6 months grace to either re-negotiate with the landlord down to a fair rent set at 20% above the average council house rent or advise them to find cheaper accommodation for themselves as that is all they are going to get.

As they used to say not a lot to write home about is it?