£1 billion Government fund to boost the private rented sector

Whilst I understand that businesses need an incentive to built rental properties, and we do need more rental properties, without any kind of rent controls these businesses stand to make huge profits using taxpayers money. Or have I misunderstood this?

No I don't think you've misunderstood it.

-Private companies are interested only in profit.
-Politicians are generally corrupt (co-opted by the political system if you prefer) and are bought off by private lobbyists with contributions or directorships.
-Then politicians pass initiatives to benefit their contributors. If the masses are lucky it won't cost us too much of our labour, and there might be a small trickle down of wealth to a few of us.
-The mainstream media keeps the masses happy and distracted.


That is my model of how it works anyway.

I expect Rents will be up to 80% of "market" in the locality and called "affordable".
(That's private market, not the "market" Southwark use to value leaseholders leases).
In that location the rents are already very high.
The median income of Southwark's Council tenants is already c.£9600 to average £15,000 depending on stat used.
80% of market will not be affordable to even hard working people. More like 30%.

So that's "average" people out of it already.

Then anyway, any rent cap will be removed in due course for reasons that johnnytee sets out.

Housing has become a disaster area.

And now Boris has doubled from 10 years to 20 years the time period.

Everyone, left, right or something else should be really worried for themselves, family and friends.

I expect there will be some kind of debt arrangement that will substantially reduce taxation for the property owner once management fees are stripped out.

What a grumpy week I'm having!

Jerry

Jerry - no, you've misunderstood. These will be open market private rent properties. No veil of affordability about them - managed purely for profit by a private landlord.

Depending on Southwark council's policies, a proportion of the development will then be designated as a contribution to their affordable housing target, providing rented homes managed by a housing association at social rent or "affordable" rent or part-rent part-buy. Or they make take a cash contribution in lieu.

But on the big point - about the scale of the housing crisis, you could not be more right.

We need to start thinking seriously about HOMES for people, rather than profits for landlords.

"Affordable" is not affordable for most people.
I wish I could read "1 billion Government fund for realistically priced homes for working Londoners"
Even the term "social rent" has a patronising whiff about it, and the part rent part buy deal seems to me to be a rip off from what I have heard from people who go in for it, with escalating rent and service charges.

Housing = a place to live. A basic human need.

Karen I wrote:

Or have I misunderstood this?

No. You haven't. Like you, I'm deeply disturbed at government money going into subsidising private developers creating for profit homes.

There is already a utterly shocking amount of taxpayer's money going into liing the pockets of landlords in the private rented sector in the form of housing benefit being paid for tenants who cannot be housed inside the much cheaper social and not for profit housing sector.

If government funding is to go anywhere it should be into ensuring the state is not subsidising landlords or developers by susidising the creation of more not for profit homes.

All the criticisms of Johnson's intention [surely time to drop the matey 'Boris'?] are spot on, but I think we should also acknowledge that what is happening to the housing market, rented and retail, across London, represents one of the most ambitious projects of social engineering possibly ever effected in a city of this size.

Another article posted in this week's SE1 bulletin refers to Johnson's enthusiasm for the Old Kent Road [a short bus ride from Elephant of course], and is once again indicative of plans for a total expulsion of the inner-city poor in order to make way for the super-rich, as tenants, homeowners, or absentee property investors.

Interestingly, Chinese capital features heavily in London property investment. Profits made off the back of the super-exploitation of China's workers are then used as seedcorn to displace the urban poor in London.

Once the dust has settled on what constitutes an 'affordable' level of rent, we will be left with a situation that will have a substantial impact on the rents charged by social housing landlords, not least housing associations, who under the terms of the 1988 Housing Act were given particular latitude to set higher rates of rent.

Stimulating the private rented market to allegedly soak up the surplus priority housing need population, which has been expedited by coalition legislation, includes frreing up the 'right' of local authorities to discharge their duty to house by placement of households in private homes, which in turn will of course compound the problems faced by people suffering detriment due to the bedroom tax, as the shortfall between housing benefit entitlement and rent due to private landlords will be probably be higher even than that faced by tenants already in 'proper' social housing.

On a historical note, we should remind ourselves once again of the State's willingness to subsidise the 'free market's' transformation of urban space when the market needs a helping hand, by reference to the huge government subsidy to support the building of the Canary Wharf road infrastructure, namely the revamped Limehouse Highway, allegedly one of the most expensive and heavily state-subsidised sections of public roadway in urban history.

In other words, the State is bad when it keeps poor people from utter penury [including homelessness], but beneficent when bailing out the 'rugged', 'stand-alone' 'cut-and-thrust' private sector.

There are even public sector cash incentive grants to assist secure tenants to move into private renting and in 2013 Southwark's Strategic Director of Housing and Community Services was trying to get more money for this. So people are being pushed into private when they have to relocate etc.

Read it all here

And while all this goes on in May 2013 there was 36 six bedroom houses underoccupied in Southwark's shambolic housing system, and 3,376 households underoccupying.

And the carrot they put on each bedroom? £1000! So they can plan to spend c.£200,000 on each unit of new council homes new build but do far too little to make better use of what we've got.

Many under-occupying tenants are retired and on full Housing benefit (say the Council)and not affected by the bedroom tax.

So we need to focus on building new homes that our retired residents want to move to. This will ensure that families occupy family homes.

Jim is 100% right - the Cabinets pledge to hold down council rents one measure of inflation or another toothless stunt pretty much shredded by Ed Balls: council rents will rise. And having doubled+ in the last decade, each % raise in recent years has been more than a week's wages for most hard working tenants every time. Reducing even further the prospects of residents leaving their homes any time soon to pass them onto more needy others.

What a total shambles it is.

(E.g. £110 * 52 = 5720, x 4% increase = extra £286 per year p.a. media wage = 9,600 / 52 = 184 pw.

Hi hhrc, just a note of thanks regarding your post dealing with the situation regarding council rent rises, and in particular the indicative example demonstrating the real impact of year-on-year rises on low-income households.

Thanks also for the clarification regarding bedroom tax exemption for pensioners. I hadn't been aware of this.

hhrca wrote:

Read it all here

Link doesn't appear to work.