Quote:
Originally Posted by joglynne
@ martyh.  Why does the profit element have any bearing on the fact that you will be paying at least 20% less than a person renting a comparable property from a private landlord.
The amount in question is the amount actually paid by the person renting a property. The formula being used does not take into account any profit being made from the rental. |
Because the only reason private rents are higher than LA rents is because of the profit element which could be anything depending on what the landlord wants or needs to make ,that is why the rent formula uses
this method to calculate rent
30 percent of a property’s rent should be based on relative property values;
•
70 percent of a property’s rent should be based on relative local earnings; and
•
a bedroom factor should be applied so that, other things being equal, smaller properties have lower rents.
expressed as a formula
70% of the national average rent Multiplied by relative county earnings
Multiplied by the bedroom weight
plus
30% of the national average rent
Multiplied by relative property value
A local example to me would be this
I pay £110 p/w for a 3 bed semi council house built around 1950-55 unfurnished ,
This house
10 mins walk from mine also a 3 bed semi is 635p/m or £48 per week more than mine £48 could be considered a very modest profit for a house of that standard ,my point being that private rents and council rents are not that different in reality especially when you consider that the quality of that house is far superior to mine ,that house is newly decorated, modernised and carpeted ,my house was a absolute pig sty when I moved in with an overgrown garden and no decorating been done for years