April 1st already? Get a free council house for coming off benefits

[Ignitionnet]

Times - Paywalled

Millions of houses would be “given away” to low-paid workers under Tory plans to reward people who come off benefits.

Iain Duncan Smith, the work and pensions secretary, is pushing for a pledge to “gift” tenants their council home after a year in work to be included in the Tory manifesto.

Such tenants would cease to be eligible for housing benefit and would have to pay 35 per cent of the sale proceeds in tax if they sold their property within three years, according to one model under discussion. In later years, the amount of tax paid would fall.

All money raised would be ploughed back into the housing market. Proponents argue that the saving in housing benefit and the sales tax receipts, boosted by house inflation, would almost outweigh the cost.

The plan is one of several being considered by senior Tory strategists looking for an “eye-catching” proposal to appeal to working-class voters who might otherwise be tempted to switch to Ukip. They also want to boost home ownership and reward those in work.

If many of the 4.5 million existing social homes were transferred to tenants, the scale of home ownership among poorer groups could be transformed in a matter of years.

Housing associations — private, non profit-making organisations that provide low-cost social housing — would lose a huge chunk of income under the giveaway scheme. They dismissed it as “bonkers”.

David Orr, chief executive of the National Housing Federation, said: “You can’t just give away homes without it costing a huge amount of money. It makes no sense at all.” He said that housing associations were collectively borrowing £50 billion to build homes and would be unable to pay back their debts if the policy were pursued.

Another idea being floated is to extend the Right to Buy programme to the 2.5 million homes owned by housing associations.

Mr Duncan Smith has been pushing for the Right to Buy scheme — which gives homebuyers generous discounts of up to £100,000 — to be extended. It is confined to two million houses owned by councils.

Can't wait to see what my bribe to vote Conservative will be!

[Sirius]

Originally Posted by Ignitionnet

Times - Paywalled



Can't wait to see what my bribe to vote Conservative will be!

Well i know one of mine.

I am 55 in April and i have 4 private pensions plus my Army pension. My Army pension will start paying out in full from April, 2 of my pensions i will keep putting money into until i retire. The other 2 of them i will call on as lump sums in April and i can go buy a Lamborghini and pay off my mortgage.

[alanbjames]

All good for giving them a council house but how would so called low paid workers be able to afford to keep it?

They would still have to pay council tax and other bills and maintenence on the property. What will happen is that there will be a huge amount of evictions taking place which then would put a huge amount of pressure again on social housing.

[Ignitionnet]

They will have no mortgage or rent to pay. How are they going to be evicted when they have no mortgage or rent?

Tax credits would top up their income. If they were unable to pay basic bills before not having to pay anything towards rent they would be really stuffed now.

You think it's 'all good' to give social housing stock away for free, but are worried about pressure on social housing.

Priceless.

[Gary L]

Just remember what your Grandad told you. never vote for Conservatives. all they care about is the rich. and will say whatever it takes to stay in power. and then tell you it was all a bluff after they tricked you into voting for them.

don't let Grandad down.

[Taf]

Council houses given away. They must realise that maintenance costs are going to rise above rental incomes, so best to dump them now and put costs on the new owners. Hmmm.. the same as water, gas, electricity and phones services a few years ago....


Meanwhile in Wales even Right To Buy is being stopped, after having a menial discount compared to England (after they had been "revalued" by around 400%).

[tweetiepooh]

I remember what my dad tells me that Labour only care about themselves and will do and say whatever it takes to remain in power. And if you disagree they'll call a strike and no-one can work but it's not their fault.

There is a difference between what you can sell a house for and what it costs. Look at your insurance, rebuild value is usually well below sale value. So while it seems that they are giving away a £120k house, all they are really giving is £50k (made up figures). If the recipient sells in those early years the tax is £37k so £13k short, plus reduction in benefits and costs on the property. This assumes no price rises in housing. Current values are 10% (England) so in 3 years the house could be worth in excess of £150k -> £47k tax.

[TheDaddy]

Originally Posted by alanbjames

All good for giving them a council house but how would so called low paid workers be able to afford to keep it?

They would still have to pay council tax and other bills and maintenence on the property. What will happen is that there will be a huge amount of evictions taking place which then would put a huge amount of pressure again on social housing.

That's what happened in the eighties give away

Originally Posted by tweetiepooh

Look at your insurance, rebuild value is usually well below sale value.

Huh ? Not for my house, its the other way round.

[Ignitionnet]

Originally Posted by tweetiepooh

I remember what my dad tells me that Labour only care about themselves and will do and say whatever it takes to remain in power. And if you disagree they'll call a strike and no-one can work but it's not their fault.

There is a difference between what you can sell a house for and what it costs. Look at your insurance, rebuild value is usually well below sale value. So while it seems that they are giving away a £120k house, all they are really giving is £50k (made up figures). If the recipient sells in those early years the tax is £37k so £13k short, plus reduction in benefits and costs on the property. This assumes no price rises in housing. Current values are 10% (England) so in 3 years the house could be worth in excess of £150k -> £47k tax.

The land the property is built on isn't free, which explains the difference. As a general rule houses come with the freehold for the land, flats the leasehold unless a group come together to purchase the freehold for the entire complex.

Both of these have value, both make up the difference between rebuild cost and sale cost, and either would be included in the sale, hence what is given away is open market sale cost.

Either way it's incredibly stupid and will ram the housing benefit bill up the backside as it further depletes social housing by shifting more stock to the private rental sector. It happened with right to buy, it would happen with this.

If you gave me a council house for free the first thing I'd do is remortgage it and use the proceeds to buy a smaller buy-to-let property, or use the equity as deposit on a private purchase home and rent the ex-council property on the private market.

[nashville]

Originally Posted by alanbjames

All good for giving them a council house but how would so called low paid workers be able to afford to keep it?

They would still have to pay council tax and other bills and maintenence on the property. What will happen is that there will be a huge amount of evictions taking place which then would put a huge amount of pressure again on social housing.

Well said

[Sirius]

Originally Posted by tweetiepooh

I remember what my dad tells me that Labour only care about themselves and will do and say whatever it takes to remain in power. And if you disagree they'll call a strike and no-one can work but it's not their fault.

My Dad said something similar.

---------- Post added at 16:04 ---------- Previous post was at 16:02 ----------

Originally Posted by alanbjames

They would still have to pay council tax and other bills and maintenence on the property.

That's why both myself and my wife WORK all hours so we can look after our family and our house, i don't get a penny in help from the Government and never have

Originally Posted by Sirius

Well i know one of mine.

I am 55 in April and i have 4 private pensions plus my Army pension. My Army pension will start paying out in full from April, 2 of my pensions i will keep putting money into until i retire. The other 2 of them i will call on as lump sums in April and i can go buy a Lamborghini and pay off my mortgage.

Not really a bribe as such however. That's your own money.

Originally Posted by Sirius

That's why both myself and my wife WORK all hours so we can look after our family and our house, i don't get a penny in help from the Government and never have

Education, NHS, roads, police etc. Most of us will receive more from the Government than we paid in. Especially if we live long enough to receive a few years of the state pension. Pensions in fact account for more than out of work or disability benefits as does education and the NHS. It's just that everyone expects, rightly, to have a decent state pension, healthcare and education so it's less popular to view those as Government handouts and instead we call them entitlements that we've paid for (even though most of us haven't).

[Escapee]

Originally Posted by Damien

Not really a bribe as such however. That's your own money.



Education, NHS, roads, police etc. Most of us will receive more from the Government than we paid in. Especially if we live long enough to receive a few years of the state pension. Pensions in fact account for more than out of work or disability benefits as does education and the NHS. It's just that everyone expects, rightly, to have a decent state pension, healthcare and education so it's less popular to view those as Government handouts and instead we call them entitlements that we've paid for (even though most of us haven't).

Not true in all cases, since leaving school at 16 I have not received any free education, have not been in hospital, I pay road tax on more than one vehicle, my council tax funds the police and I have had a private pension since the age of 20, and I'm paying in the maximum amount I can. I don't consider myself to be that well paid, but I have spent the last 15 years either close to or in the 40% tax bracket, my earnings over my 32 year working life has exceeded £600k so the tax I have paid must be approaching £200k, so it will be more than a few years of pension before I have taken out more than I have put in

This is a real IDS idea short term populism medium to long term high cost on an already inflated housing sector and after only one year seriously the man is a complete part and the sooner he's gone the better. Sadly there is little to no alternative .