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  • Property-a-holics

    Council rents closing in on PRS rents?

    There was a proposal by present Govt for Sheltered Housing - whereby each unit would in future only get the basic LHA rate - rather than £200/£300 weekly to reflect the add on services.

    If enacted that would close down Sheltered Housing overnight.

    In bigger picture one needs to regularly check CBL sites for social rents.

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    Hi DL

    Be good though to check with your friend whether that £85 per week "Rent" also includes eg CT/Water Rates/Service Charge as the actual rent element may be a fair bit lower.

    That said since 1979 on long term average - Social Rents about doubled every 9 yrs (8% cagr) thus rising by 3% cagr faster than average wage over same interval. So today's average Social Rent is treble the percentage it was 40 yrs ago - when the average weekly Rent was just £6.40.

    Indeed had social rents simply tracked average wage growth - today's rents would be only 1/3rd of actual rents - and so the HB bill would be over £10 billion pa lower.

    Of course it was the 1977 switch to needs based tenancy allocation of Council housing which lead to HB claimants in SRS going from just 10% in 1980 to 75% today (EHS 2017) - and in turn with most tenants being apathetic about rent levels as someone else was paying - there was little opposition to those steep increases.

    The big increase was the doubling from 1979 to 1983 - after which average long term rise was nearer 6% cagr (though still a doubling every 12 yrs post 1983).

    Another lever for rent increases was that around 60% of former Council homes have now been transferred to HAs - who on average charge 13% higher rents than LAs - though only around 300 LAs across UK still retain direct control of any social housing stock - the rest being owned by the circa 1100 HAs/RPs.

    Before 2008 HB per se was essentially unlimited - though the 2008 LHA cap at 50th percentile was used as the baseline rent calculator by HAs who were developing new social housing - hence a number of HA rentals will now have rents around the 50th  percentile LHA which in some cases in North will mean rents are higher than PRS.

    A number of new social lets will also be for a fixed term of 2 to 5 yrs - with a 12 month probationary period at outset - to ensure rent is paid.

    In Surrey a new build HA 2 bed flat has rent £1000 pcm.

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    You have given some great DATA there

    thank you

    My friend has £5 per week for water included in his rent

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    Learn Change and Adapt ?????

    All comments are for casual information purposes only. If you wish to rely on any advice I have given please ensure you obtain independent specialist advice from a third party. No liability is accepted for comments made.

    Another thing about SRS is that without RTB there would now be around 1.9 million extra units (above current 4.3 million)

    Logically most of those ex-RTB units if still in SRS would though be occupied by the 1.5 million LHA claimants in PRS.

    In turn that would no doubt have slowed the recent growth in PRS.

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    Do all Social Housing Companies have to offer their properties for sale to their tenants

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    Yes for Council Housing per se - but 60% of former Council homes were transferred via LSVT to HAs over several past decades.

    One of the "carrots" for voting for those transfers was that many former Council tenants were given a "Preserved RTB".

    Hence the media rather got it wrong when flagging that great swathes of HA units would be sold off - as most HA tenants had that right anyway post LSVT.

    That said RTB sales are still running at around 12,000 pa across UK.

    Despite the new higher nominal discounts of c.£104k in London and £80900 elsewhere - almost no RTB sale will get anywhere near the headline max percentage discount of 70% - as market values are far too high.

    In say Home Counties in 1980 a 3 bed Council House would have had a market value of around £25,000 - so with the former max 60% discount and a monetary cap of £35000 discount - the £15k nominal discount was well under the nominal cap of £35k.

    That cap was later boosted to £50k - before being reduced by many LAs to around £16k in 1990s/early 2000s

    Today a similar house will have market value around £400k - so after the £80900 max discount outside London - the real discount is only 20.2% as they now pay £319100. On which there is SD of £5955...

    In SW6 a 3 bed Council house will have market value c, £1.2 million - so even after max £104k discount they pay over £1 million  - with SD eroding almost half the RTB discount.




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    No, Right To Buy and Right to Acquire have already been ended in Scotland and Wales. Its end is under review in Northern Ireland but the discount is capped at £24k. England has decided to continue and RTB is capped at £82.8k with London capped at £110.5k.

    https://www.gov.uk/right-to-buy-buying-y...uncil-home

    Right to Acquire discount in England is between £9k and £16k for those who don't have preserved Right to Buy.

    https://www.gov.uk/right-to-acquire-buyi...ation-home

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    A good teacher must know the rules; a good pupil, the exceptions.

    Martin H. Fischer

    Indeed.

    The most recent number of RTBs I saw was i think 5000 in a year.

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    In England in 2017/18 there were a total 16056 RTB sales - of which 11833 were via LAs and  4223 via RPs

    https://assets.publishing.service.gov.uk...T_671.xlsx


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    Its interesting to see the data.

    For England, 1.95 million RTB sales since it started in 1980 and 5.5 thousand RTA sales since it started in 1998, with last year being the busiest.

    It would be interesting to see how that compares in Wales, Scotland and Northern Ireland but the English Government site doesn't provide that data (are they still the UK government?)

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    A good teacher must know the rules; a good pupil, the exceptions.

    Martin H. Fischer