Opposition grows to benefit cap
Discussion
RYH64E said:
So now it makes sense. What you're actually saying is that the houses are re-valued to current market value and sold at a loss to that, which is hardly surprising really as they are discounted from current market value so by definition the revaluation reserve will take a hit. There's no way that there would be a loss if you only included purchase price (adjusted to 2015 values using rpi) plus any capital expenditure.
The revaluation reserve takes a hit, but as the revaluation reserve is only an accumulation of market price increases over the years and isn't based on any actual costs it doesn't represent a loss, just a reduction in the increase in value that would have been made if the houses were sold at full market value.
No. As I've said - even using Historical Cost (including all subsequent CapEx) the houses are being sold at a loss. I think you and Nikolya are assuming that all the houses were built at 1950s prices and therefore (ignoring all indexation) the sale price would have exceeded cost price. There will have been significant capital expenditure incurred over the life of the asset (not just when it was initially built) and this expenditure is capitalised at cost. When combined with the significant discounts being offered the Council ends up making losses in most cases.The revaluation reserve takes a hit, but as the revaluation reserve is only an accumulation of market price increases over the years and isn't based on any actual costs it doesn't represent a loss, just a reduction in the increase in value that would have been made if the houses were sold at full market value.
Countdown said:
No. As I've said - even using Historical Cost (including all subsequent CapEx) the houses are being sold at a loss. I think you and Nikolya are assuming that all the houses were built at 1950s prices and therefore (ignoring all indexation) the sale price would have exceeded cost price. There will have been significant capital expenditure incurred over the life of the asset (not just when it was initially built) and this expenditure is capitalised at cost. When combined with the significant discounts being offered the Council ends up making losses in most cases.
No, what I'm saying is that I don't believe the houses are being sold at a loss to the indexed build cost plus accrued capital expenditure. Most of the council housing stock built in the 30s and 50s was built on cheap land and in large estates, which is a very economical way to build. House price inflation in subsequent years has far outstripped any rpi/cpi indexing formula, so even 35% of current market value would far exceed cost price indexed at either cpi or rpi (imo).I do believe that the houses are being sold at a loss to their revalued asset value, but that's not a real loss and is inevitable if there's any discount to current market value.
It's also worth considering that some of these assets are 80 odd years old, selling rather than continuing to maintain and update would make perfect sense if they were being replaced. It's not using the money to build new stock that's the problem, not the policy of selling.
RYH64E said:
No, what I'm saying is that I don't believe the houses are being sold at a loss to the indexed build cost plus accrued capital expenditure. Most of the council housing stock built in the 30s and 50s was built on cheap land and in large estates, which is a very economical way to build. House price inflation in subsequent years has far outstripped any rpi/cpi indexing formula, so even 35% of current market value would far exceed cost price indexed at either cpi or rpi (imo).
I think we're going to have to agree to disagree. You are correct in saying that the houses were originally built cheaply. That is why they have incurred significant additional amounts of capital expenditure in order to keep extending their lifespan. The ongoing CapEx isnt at 1930's prices, it's more up to date. Much of it was incurred in order for Council Housing to be brought up to what was called "decent Homes" standard.RYH64E said:
It's also worth considering that some of these assets are 80 odd years old, selling rather than continuing to maintain and update would make perfect sense if they were being replaced. It's not using the money to build new stock that's the problem, not the policy of selling.
They may be 80 years old but they have been maintained to a certain standard. They are not worn out. In most cases they are "profitable". It makes no economic sense to sell an £80,000 house for £35k to £50k and then have to take an additional loan out for £40k to be able to replace it with a new house.To use one of your examples - if your 10 year old Skoda 1.9Tdi is working perfectly well as a taxi would you part-ex it and take out a car loan to buy a brand new skoda?
Countdown said:
hey may be 80 years old but they have been maintained to a certain standard. They are not worn out. In most cases they are "profitable". It makes no economic sense to sell an £80,000 house for £35k to £50k and then have to take an additional loan out for £40k to be able to replace it with a new house.
To use one of your examples - if your 10 year old Skoda 1.9Tdi is working perfectly well as a taxi would you part-ex it and take out a car loan to buy a brand new skoda?
Maintaining houses is 'repairs and renewals', that's not capital expenditure.To use one of your examples - if your 10 year old Skoda 1.9Tdi is working perfectly well as a taxi would you part-ex it and take out a car loan to buy a brand new skoda?
What would make perfect sense is to sell 100 or so council houses at a discount, thus taking 100 or so households out of the council housing sector, and then free up a bit of land somewhere and have >100 houses built on it for the same cost. Land is a major part of the cost of new build housing and councils typically have plots of land that they could allow building on if they chose, even if it meant granting planning permission for the odd bit of agricultural land (as happens when it suits).
fblm said:
Hackney said:
Nothing else has changed, in fact many costs have gone up, but Cameron expects people to get by on £3,000 per year less. How?
Most of the cost of benefits is still rent, yet rents go up and house prices go up.
Can you explain why the fvck we should pay someone more to sit on their fvcking arse watching TV than someone else EARNS busting a gut on minimum wage? 23 grand cap, tax free, isn't enough, who are you fvcking kidding? Jesus Christ.Most of the cost of benefits is still rent, yet rents go up and house prices go up.
No, you'd soldier on... until you couldn't afford the £1,500 rent every month. Now that's not an extreme amount of rent but that's £18,000 per year. A massive chunk of £26,000 benefits and an even bigger chunk of £23,000.
But they're not paid to sit on their arse, they get benefits to support them while they're out of work.
But of course you have a stereotype that fits nicely with your world view don't you so why think about other possibilities.
Have rents or mortgages suddenly dropped by 11.5%? No, thought not.
Have people who bust a gut - to coin a phrase - seen their pay drop by 11.5% in the last year? No.
As I said, the issue is the reduction in the face of ever increasing property prices (thanks for that Tories). A reduction that will make no difference - other than being seen to be doing something.
Of course people could move to where the rent is cheaper. Somewhere there are even fewer jobs, so the likelihood they "sit on their fvcking arse watching TV" increases.
turbobloke said:
Hackney said:
Nothing else has changed, in fact many costs have gone up, but Cameron expects people to get by on £3,000 per year less. How?
An average smoker spends over £3000 per year on harming themselves. One option for smokers is to stop. Then there's £1000 on alcohol, not essential in tough times but maybe the times aren't tough enough.Then again no low earners smoke or drink so that's straight out the window.
Hackney said:
turbobloke said:
Hackney said:
Nothing else has changed, in fact many costs have gone up, but Cameron expects people to get by on £3,000 per year less. How?
An average smoker spends over £3000 per year on harming themselves. One option for smokers is to stop. Then there's £1000 on alcohol, not essential in tough times but maybe the times aren't tough enough.Then again no low earners smoke or drink so that's straight out the window.
That must be a reference to the 2 day / 5 day diet which could do many obese people the world of good.
Or go for 37p/serving.
http://www.bbc.co.uk/news/business-22263706
You may well be onto something here.
Hackney said:
fblm said:
Hackney said:
Nothing else has changed, in fact many costs have gone up, but Cameron expects people to get by on £3,000 per year less. How?
Most of the cost of benefits is still rent, yet rents go up and house prices go up.
Can you explain why the fvck we should pay someone more to sit on their fvcking arse watching TV than someone else EARNS busting a gut on minimum wage? 23 grand cap, tax free, isn't enough, who are you fvcking kidding? Jesus Christ.Most of the cost of benefits is still rent, yet rents go up and house prices go up.
No, you'd soldier on... until you couldn't afford the £1,500 rent every month. Now that's not an extreme amount of rent but that's £18,000 per year. A massive chunk of £26,000 benefits and an even bigger chunk of £23,000.
But they're not paid to sit on their arse, they get benefits to support them while they're out of work.
But of course you have a stereotype that fits nicely with your world view don't you so why think about other possibilities.
Have rents or mortgages suddenly dropped by 11.5%? No, thought not.
Have people who bust a gut - to coin a phrase - seen their pay drop by 11.5% in the last year? No.
As I said, the issue is the reduction in the face of ever increasing property prices (thanks for that Tories). A reduction that will make no difference - other than being seen to be doing something.
Of course people could move to where the rent is cheaper. Somewhere there are even fewer jobs, so the likelihood they "sit on their fvcking arse watching TV" increases.
Fit and heathly people getting close to the cap are career spongers who have managed to claim every benefit going.
Also why say rents is £1500? I'm now a BTL landlord with 4 houses in the south east. Each rents for £650 pcm. At best they could achieve £750.
Edited by 98elise on Sunday 8th February 08:31
Hackney said:
Someone like you? What if, god forbid, you lost your job? Of course you wouldn't take benefits payments would you, not wanting state handouts. Not being a leftie, scrounging dole bludger.
No, you'd soldier on... until you couldn't afford the £1,500 rent every month. Now that's not an extreme amount of rent but that's £18,000 per year. A massive chunk of £26,000 benefits and an even bigger chunk of £23,000.
But they're not paid to sit on their arse, they get benefits to support them while they're out of work.
But of course you have a stereotype that fits nicely with your world view don't you so why think about other possibilities.
Have rents or mortgages suddenly dropped by 11.5%? No, thought not.
Have people who bust a gut - to coin a phrase - seen their pay drop by 11.5% in the last year? No.
As I said, the issue is the reduction in the face of ever increasing property prices (thanks for that Tories). A reduction that will make no difference - other than being seen to be doing something.
Of course people could move to where the rent is cheaper. Somewhere there are even fewer jobs, so the likelihood they "sit on their fvcking arse watching TV" increases.
If, God forbid, I lost my job - I would be very happy if my mortgage (less than £1,500/month) was paid for me. I suspect it wouldn't be paid though.No, you'd soldier on... until you couldn't afford the £1,500 rent every month. Now that's not an extreme amount of rent but that's £18,000 per year. A massive chunk of £26,000 benefits and an even bigger chunk of £23,000.
But they're not paid to sit on their arse, they get benefits to support them while they're out of work.
But of course you have a stereotype that fits nicely with your world view don't you so why think about other possibilities.
Have rents or mortgages suddenly dropped by 11.5%? No, thought not.
Have people who bust a gut - to coin a phrase - seen their pay drop by 11.5% in the last year? No.
As I said, the issue is the reduction in the face of ever increasing property prices (thanks for that Tories). A reduction that will make no difference - other than being seen to be doing something.
Of course people could move to where the rent is cheaper. Somewhere there are even fewer jobs, so the likelihood they "sit on their fvcking arse watching TV" increases.
turbobloke said:
Hackney said:
turbobloke said:
Hackney said:
Nothing else has changed, in fact many costs have gone up, but Cameron expects people to get by on £3,000 per year less. How?
An average smoker spends over £3000 per year on harming themselves. One option for smokers is to stop. Then there's £1000 on alcohol, not essential in tough times but maybe the times aren't tough enough.Then again no low earners smoke or drink so that's straight out the window.
That must be a reference to the 2 day / 5 day diet which could do many obese people the world of good.
Or go for 37p/serving.
http://www.bbc.co.uk/news/business-22263706
You may well be onto something here.
If that's what you actually think there's no point trying to debate with you.
Justayellowbadge said:
Tory house price rises?
Seems to be a pretty big jump between 97 and 2010 to me. Remind me, was that Thatcher or Major in power?
Thatcher's policy of turning council house residents into Seems to be a pretty big jump between 97 and 2010 to me. Remind me, was that Thatcher or Major in power?
Of course you could use the graph to show that it's been labour fuelling tremendous growth in this country. I'm sure the PH tory massive would take that opportunity if it presented itself
Hackney said:
Thatcher's policy of turning council house residents into tory voters home owners was a major factor, fuelling the obsession with home ownership and shortage of rental properties which have fuelled price increases. Particularly in rental where many on housing benefit live.
Well, that's the excuse people like to trot out, but in reality it's a simple case of supply, demand and what people can afford. UK is very crowded and people from all over the world want to live here. That drives the market which, like all markets, is highly sensitive at the edges.Plenty of cheap houses to buy/rent where nobody wants to live!
Hackney said:
turbobloke said:
Hackney said:
turbobloke said:
Hackney said:
Nothing else has changed, in fact many costs have gone up, but Cameron expects people to get by on £3,000 per year less. How?
An average smoker spends over £3000 per year on harming themselves. One option for smokers is to stop. Then there's £1000 on alcohol, not essential in tough times but maybe the times aren't tough enough.Then again no low earners smoke or drink so that's straight out the window.
That must be a reference to the 2 day / 5 day diet which could do many obese people the world of good.
Or go for 37p/serving.
http://www.bbc.co.uk/news/business-22263706
You may well be onto something here.
Hackney said:
If that's what you actually think there's no point trying to debate with you.
Well...I don't actually think that, as you probably knew anyway when you resorted to attributing views to me I've not expressed - so have no fear and try a proper reply. Or, feel free not to 
but it's clear by now that anyone with half a clue ot even less will manage fine with some basic non-lethal adjustments. After all, non-smoking non-drinking thrifty types aren't remotely L'Oréal.Hackney said:
jonah35 said:
You can rent a house in the north for £350 per month.
Or a house share for £300 pm inc bills.
Plus food of £25 per person per week.
You can. But, as I said, there are fewer jobs in the areas with the lowest rents.Or a house share for £300 pm inc bills.
Plus food of £25 per person per week.
Hackney said:
Justayellowbadge said:
Tory house price rises?
Seems to be a pretty big jump between 97 and 2010 to me. Remind me, was that Thatcher or Major in power?
Thatcher's policy of turning council house residents into Seems to be a pretty big jump between 97 and 2010 to me. Remind me, was that Thatcher or Major in power?
Claudia Skies said:
Hackney said:
Thatcher's policy of turning council house residents into tory voters home owners was a major factor, fuelling the obsession with home ownership and shortage of rental properties which have fuelled price increases. Particularly in rental where many on housing benefit live.
Well, that's the excuse people like to trot out, but in reality it's a simple case of supply, demand and what people can afford. UK is very crowded and people from all over the world want to live here. That drives the market which, like all markets, is highly sensitive at the edges.Plenty of cheap houses to buy/rent where nobody wants to live!
http://s3-ec.buzzfed.com/static/2014-12/22/14/enha...
and there is plenty of space for more of them
Gassing Station | News, Politics & Economics | Top of Page | What's New | My Stuff