Friday 10 June 2011

Hard Economic Realities Begin To Bite...

The ‘Indy’ launches into a ‘homelessness crisis’ campaign:
… a great wave of homelessness of a different kind is about to break. The Government has introduced changes which could force thousands out of their homes in central London over the next 12 months.
Really? The government has assumed the status of a Victorian landlord, throwing the poor and destitute out on the street?
Families on low incomes or benefits who currently get their rent paid in full will find that housing benefit cut. If they can't make up the shortfall they will have to move house.
Ah. Not exactly, then...

Of course, it’s much better that everyone keeps paying for the benefits that enable them to live in areas that the hard-working majority can only dream of, isn’t it?
The idea, according to the Prime Minister, is that people "out of work, or on a low wage, and living in an expensive home in the centre of a city" will be prompted by the benefit cap to make "the decision to go back to work, or take a better paid job [or] move to a cheaper home, in a different part of the city, in order to escape benefit dependency".
How utterly unreasonable!!

How will Arabella find a cheap nanny, or Crispin a decent cut-price valet for the Merc, if all the low-paid move out? How awful!
Westminster Council has some 5,117 households currently receiving housing benefit above capped levels.
Tory ideology suggests that landlords will bring rents down to meet the reduced benefits. Fat chance, says Cathy Corcoran. Research conducted by the National Landlords Association suggests 84 per cent of landlords will not consider cutting rents. Instead they will replace existing tenants with people who are not on benefits.
Well, indeed. They'd be stupid to do otherwise, since this is a business just as much as any other.
Alastair Murray, at Housing Justice, wants all this scrapped. He'd prefer the Government to introduce rent regulation to stop landlords overcharging.
/facepalm
"It works in Europe," he says. But few homelessness charities think that politically realistic.
Not just politically realistic, surely? Isn't there a greater reason, that it wouldn't be economically realistic?
What is happening instead is that inner London councils have begun booking rooms in outer London boroughs like Lewisham, Greenwich, Croydon, Bromley and Bexley, and also in towns such as Luton, Watford, Slough, Reading and even Eastbourne and Hastings. Rents are much lower there.
That, folks, is economic reality in action!

15 comments:

NickM said...

Erm... Call me economically naive but isn't the tax-payer paying London rents in full (a) a direct subsidy from muggins to the landlords and (b) a market distortion that keeps rents artificially high?

Bucko said...

That article begins with the sob story of a young girl who should have kept her legs shut or used a johnny, and finishes with the story of a chap whose rent is £350 per week.
When we moved out of rented property and got a mortgage 3 years ago we were paying £86 per week on a three bedroom house.

Bring on those benefit cuts.

Rob said...

"rent regulation" aka rent controls. Even left-wing economists realise these are catastrophic.

What they are good at, though, is providing very cheap accomodation for life for middle-class lefties who can play the system.

Anonymous said...

These stories are very sad. Even up here in the grim North there is now a housing shortage. We had a glut about ten years ago, but they moved immigrants in.
Quite how 'rents' get so distorted is, of course, a main point in economics since Henry George (Poverty and Progress). This applies to monopoly trading as well as housing.
I share spleen on people getting paid these 'benefits', but they are built up by clown government policy, not scroungers. Just done my tax return so there are a few I'd like to put up against the wall - but my guess is the ultimate recipients ain't evil poor. ACO

James Higham said...

There are those taking advantage and then there are those genuinely on the line, for whom even a fifty pound cut means they're out. It will be interesting to see how landlords react to this.

Anonymous said...

Since the labour government changed the housing system to give homeless priority and set quotas and targets to house the homeless the percentage of "homeless" applying for housing has rocketed.

Go figure.

Back on topic, if these 5000 families are evicted they will automatically get priority for alternative social housing.

Furor Teutonicus said...

XX Alastair Murray, at Housing Justice, wants all this scrapped. He'd prefer the Government to introduce rent regulation to stop landlords overcharging.
"It works in Europe," XX

Like fuck it does. Well, not in Germany anyway. The description;

XX Families on low incomes or benefits who currently get their rent paid in full will find that housing benefit cut. If they can't make up the shortfall they will have to move house. XX

Is EXACTLY what we have here.

EXCEPT!!!

Here, you are NOT allowed to "make up the short fall".

"Your rent is to expensive? Then fucking MOVE. Damn peasent!"

See, the "dole" "sais you need X amount to live on. (Convieniently), this is the EXACT amount we have chosen to pay you".

Which means, if you can afford to "make up the difference", you are getting MORE than you "need to live on", and that amount will be taken off the total.

I reccomend it. Except for one point. Why the FUCK are they giving money to people for doing fuck all all day, anyway?

Clarissa said...

Do these people never look at the sums involved?

£400/week = £20,800/year
£280/week = £14,560/year

The average earner doesn't pay anywhere close to those sums on a mortgage so why on earth should be we paying such sums to the unemployed?

Tattyfalarr said...

"so why on earth should be we paying such sums to the unemployed?"

Well..technically...we're not. We're paying it to greedy twat bastard landlords.

Well..if they receive it. I've known three single mothers with 12 children to assorted sperm donors between them evicted in the last six months here for well over a grand each in arrears.

I pay a mortgage...I couldn't sleep if it wasn't paid...where is their conscience ??

David Gillies said...

Rent controls cause housing shortages. This is elementary. Of course it's an iron law of the universe that if you write for the Dragunia you're too fucking stupid to breathe reliably, so seeing it suggested in CiF is no surprise.

JuliaM said...

"...and (b) a market distortion that keeps rents artificially high?"

It certainly does seem to be that.

"Bring on those benefit cuts."

If it ain't hurtin', it ain't workin'. Simples!

"What they are good at, though, is providing very cheap accomodation for life for middle-class lefties who can play the system."

Oh, indeed!

"It will be interesting to see how landlords react to this."

I think any sensible landlord would be well advised to look at their portfolio and judge their tenants by how they've behaved, rather than just by monetary value.

JuliaM said...

"Back on topic, if these 5000 families are evicted they will automatically get priority for alternative social housing."

Which, I seem to recall, is an ever-shrinking pool?

"I reccomend it."

Me too!

"Do these people never look at the sums involved?"

What, facts and stuff? Perish the thought!

Gallovidian said...

Its a subsidy to London from the rest of us, the market will take all the subsidy available, once the subsidy stops the market will adjust.

And as for the so called housing shortage, surely that is really a person excess!

Furor Teutonicus said...

XX Gallovidian said...
And as for the so called housing shortage, surely that is really a person excess! XX

Aye. And I wonder who, or what has caused THAT, then?

Anonymous said...

Ian McKellen was blaming high homelessness figures on young people coming out to their parents and then being kicked out! Notrhing like a blinkered eprspective I spose.