Tuesday, February 20, 2007

The great Council House debate

This seems to have some to the fore recently since a minister who seems to have profiteered by buying not one but two social housing units for herself now wants to debate who should and should not have council housing.

I was listening to Jeremy Vine's phone in on BBC radio 2, and had to stop as it was making me a tad angry. So I thought I would add my tuppence worth.

Firstly why do we need council housing or social housing at all?

In short, regulations. Or rather planning regulations and laws. In the 1930's if you could get a plot of land you could build on it. People did. They frequently started with things like railway carriages and small buses. In some parts of the country you can see odd houses with many windows so close together that it looks like a railway carriage with a house built around it. That is because it is.

These days you can't do that, so the planning system rations land. That makes it very expensive for people to get their own houses, in some jobs and in some locations.

People witter on about council houses being subsidised. That is rubbish, or at least it is in part. The "subsidy" that there is is related to the cost of the land. Try ringing up a land agent and tell them you have an acre of prime building land, for residential use in a town in the South East. They will price it at between £1 and £3 million. Tell them it is designated for social housing, and they will tell you to go away. So that is where the reduction in price comes from, the government gets the land cheap because it has planning blight. If you will, they are saying that only "poor" people can live there, and the land price falls.

People go on about passing the "house" on in a will, to a son or daughter. In fact that is not quite right. Firstly less council house tenants have wills than the average, secondly the succession happens as a matter of law* at the previous tenants death. In the case of a council house, covered by the 1985 Housing act (as amended) the right of succession extends to any family member, from grandfather to grandson, uncle to cousin who lived at the property as their primary or sole residence for a period of at least 12 months before the death of the tenant. However this only applies if tenant was not themselves a successor to a previous tenant. (For example if a wife inherits by death even if she is a joint tenant, then no one else can, though if a wife is assigned the tenancy under the 1073 matrimonial causes act, that is not a succession). If it is an assured tenancy, under the Housing act 1988, as is the case with most housing associations the right to succeed only extends to the spouse.

Then some people would like to see people move on when their circumstances are better. This seems to be a desire to have some on going means testing to see if people are allowed to live in council houses. There are some legal difficulties with this. Firstly will the new legislation be retrospective? If not it won't make a lot of difference. Secondly is it desirable? People can and do move on in any case. If you live in an area where your rent would double moving from the social sector to the private sector then saying if you earn more than X a year you have to move to less secure accommodation is an extension of the benefits trap. I also heard people say that people in council houses should be made to look for work. Well I have some news for that sort of person. Many people in council houses do already work. It tends to be in lower paid or semi seasonal work, but as I say, depending on the area quite a lot do work.

Also, if social housing is to be means tested then all social housing estates will become ghettos of the unemployed or low wage earners as opposed to the more mixed areas they became after the Right To Buy was introduced. That would be a retrograde step.

If you want to see an and to social housing then either unskilled wages have to go up, or house prices need to collapse. Either you pay more for your burgers and fries, or to have your grassed mowed, or you accept social housing.

Any way, here endeth the rant for now.

(* there is an exception. tenancies transferred from councils to housings associations on Large Scale Voluntary transfers ended up with a protected right of succession, but this is not automatic and is buried in procedure and in some case well hidden in the tenancy so that the RSL can point to the last clause which is discretionary rather than a right)


Andy Cooke said...


Very interesting.
My wife has pointed out to me that some very low earners are better off in accomodation rented from the Council (well, the point is still valid for rentals from private landlords, but the price difference is usually, as you point out, prohibitive) as damage and basic upkeep does not come out of their limited income - or so I am led to believe.

Incidentally, apropos of the housing prices - I had occasion to look at the difference in price between renting and buying in an area near Woking. With a 90% mortgage and assuming a repayment mortgage, £2000 per month could get you a £400,000 house. An equivalent house rented, would cost £1,200 - £1,600 per month. The market does seem seriously overvalued at the moment ...

Benedict White said...

Andy, there is both a large rent difference and a large security difference. On an assured or secure tenancy you can't be evicted unless you are in breach of tenancy, which means you can put down roots and raise a family. On the other hand on an assured short hold, after 6 months there is no security of tenure.

The other thing is that for the most part council tenants are as responsible for their houses as private ones. They have an obligation to decorate etc. They do not have responsibility for the boiler, because under current regulations that is down to the landlord in both the private and social sector.

There is a lot of guff talked about council houses, and council house tenants, and frankly it annoys me.

CityUnslicker said...

There is a lof of guff. Thanks for this article helping to put me straight

Benedict White said...

CityUnslicker, A pleasure. If it has helped you, pass it on :)