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Oct 11 2013

Council Offers Tenants £38k to Move Out of Harrow

harrow_council_logoInside Housing has an article today about Harrow Council offering tenants £38,000 to move out of the borough, which is, we suppose, one way of fixing the housing crisis. It reads:

A London council has earmarked £1.5 million of its housing budget to establish a new grants regime which offers well-behaved tenants up to £38,000 to buy homes anywhere in the world.

The three-year ‘grant to move’ scheme is aimed at slashing Harrow Council’s burgeoning bill for housing its homeless population, an expense paid out of the general fund. Housing one large family in temporary accommodation drains this fund by up to £16,500 a year.

The grants will be offered on a sliding scale, depending on the size of the home the tenant agrees to leave.

Those leaving a one-bedroom property will be offered £20,000; giving up a two-bedroom property will net tenants £24,000. The £38,000 grant is reserved for those departing a home of four bedrooms or more.

You can read more here.

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  1. Praxis Reform

    But Harrow is an “Intensification area”, aren’t we all supposed to be shuffling over a bit, so Boris and Navin can squeeze a few more sardines into the tin?

    It’s all a bit like the old film of Laurel and Hardy both digging holes; with each putting the spoil into the others hole, and them both wondering why they’re not achieving anything…

  2. King David

    What is your solution?

  3. johnratcliff28

    When this scheme was first proposed in April you reported Susan Hall as saying, “That Labour is even considering spending such large sums on such questionable schemes is extremely alarming; I think our residents and tenants deserve better than an administration which has such a flippant attitude towards their money and their futures.”

    Is that the same Susan Hall as I watched on TV yesterday claiming the credit for introducing the scheme?

  4. Praxis Reform

    I don’t have a solution because I’m in no position to do anything about the problem. But, if you’re asking what I believe the politicians could do, my thinking is that it’s a case of carefully unpicking the damage that has built up during the past thirty odd years.

    Social housing was rising at a steady rate until the 1980s when Margaret Thatcher’s right to buy votes scheme was introduced, whereby anyone that had lived in a council house for a couple of years could buy it with a whopper of a discount.

    This might not have been so bad, had councils ploughed that money back into building new houses, but they didn’t. However, that didn’t matter because by stemming the building of new houses, the laws of supply and demand meant that purchases prices rose faster, and voters “felt” richer and thus were more forgiving of the Government in power.

    Meanwhile, speculators were able to pile into the property market at below market prices, buying up ex-council properties through deferred transaction agreements. Again, prices rose, and people “felt” richer. As an example, we read recently that the son of Ian Gow (Mrs Thatcher’s housing minister) had bought 40 of the 120 ex-council flats on an estate in Roehampton.

    None of this should be a surprise; we expect such behaviour from the Tories, but by the time Thatcher had been kicked out the remaining stock of council housing was concentrated in undesirable areas with few employment opportunities, and isolated and stigmatised tenants. The introduction of an ill-aimed poll-tax to try to keep property prices under control immediately slammed the market into reverse, and the ensuing recession (along with the sleaze scandals of the time) finished the Major Government.

    Presumably, people thought along the traditional stereotype that Labour somehow represented working people and the disenfranchised, instead of the fabulously wealthy. But, instead the new Labour Government started trying to out-Thatcher Margaret Thatcher.

    Building of new houses was cut back even further, a trend of rising prices was established, and developers were encouraged to “bank” land, thereby making it more difficult for anyone else to take the initiative and start building houses. I’ll keep this very short, but the Labour Government’s lack of interest in supporting families and penchant for starting wars overseas meant that divorced couples now needed two homes instead of one, and the flood of refugees all had to be housed somewhere. Then there’s the complete lack of planning of Britain’s entry into Europe, whereby instead of the benefits of Europe being sold to the British, we were simply told if you criticize any of these Eastern European migrants, then you’re a horrible bigot.

    So, now not only have we a housing crisis, but an infrastructure crisis too. Because with such a lack of development, there’s not enough road, air and train capacity to transport goods around the UK. There’s a shortage of schools and hospitals etc. whilst the prices of gas, water and electric are all flying up because Conservatives governments are only interested in looking after the super-rich, whilst Labour Governments instead of being prudent, squandered money like a drunken sailor, and meant they were caught naked when idiot Banksters were found to be lending money just as imprudently.

    So, we’re coming to the crunch now, the only way to keep people “feeling” rich is now to keep interest rates at next to nothing, else the housing market pack of cards will collapse as people stop being able to afford to pay their mortgages and the Banks foreclose on them. Of course, this penalises anyone with any savings, but then those types tend to be older people that kept their heads down all their working lives, did what they were told and put money aside for their old age, so they won’t make too much fuss now, and perhaps some will be tempted to buy one of those overpriced buy-to-let as a way to generate their retirement income.

    However, there’s still massive massive problem for the politicians, in that if they increase mortgage rates, the housing market collapses and the Party in power at the time will be out on its ear for at least the next 20 years.

    If they start building social housing with any sort of speed, then the supply/demand curve snaps back to normal, the bottom falls out of the housing market and the Party in power at the time is out on its ear for at least the next 20 years.

    So now, the current Government thinking seems to be to blow an even bigger housing market bubble to try to keep people “feeling” richer. Thus, we’ve come full circle to the Government’s latest plan, the help to buy votes Ponzi scheme.

    To answer the question then, there’s two answers:

    Either wages need to increase “massively” so that people can afford to pay the prices that houses have risen to, *followed by* a massive infrastructure building program to make up for the lack of investment over the past years, thereby ensuring that there are plenty of houses etc. available to satisfy the demand for them.

    Or there needs to be a massive public education program informing people that a house is something you live in, not an investment/pension fund etc. Since all this talk of houses went up X percent last year is only relevant if you plan to sell up and pitch a tent in the local park.

    Otherwise, I predict that there will be a massive “correction” in the market, and a lot of people will be left with more negative equity than the 1989 mini-crash.

    This might sound bombastic, however I predicted both the dotcom crash and the credit crunch, but found afterwards that the same people I’d already mentioned it too had developed selective amnesia, telling everyone “gosh, it all came out of the blue, nobody could have predicted that”. So, I’m grateful to be able to put on record the latest prediction in written form here.

  5. Jeremy Zeid UKIP Harrow

    Meanwhile, Labour want to import 2500 plus people into the Harrow-Weald-Wealdstone-Greenhill corridor into the new “sustainable” undersized rathole slums being built. Where are the JOBS for these people, unless it’s a cynical exercise in importing state and council dependant Labour voters…. Shurely not!!

    Note the silence from Labour on this one, and the Tories should not countenace this either. Why should the taxpayer be forced to stump this up from their extracted-with-menaces Council Tax, to help pay for someone else to relocate anywhere in the world, but only if you’re a council tenant. What’s so special about Council tenants that denies the same right/funding to say, a needy privately rented or owned resident to move out? What’s the betting that as with other “inducements” such as free plane tickets, we will see revolving door claims. Do our politicians never learn??

    On the other hand, is anyone up for a whip-round to raise £38,000 to relocate Navin Shah, preferably to Ulan bator 🙂 It shouldn’t take too long. Now THAT would be money well spent.

  6. Jeremy Zeid UKIP Harrow

    Having looked deeper into this policy, one advantage is that the Council keeps it’s asset, unlike with the Right-to-buy scheme and Harrow had the 4th lowest social housing stock.

    Make no mistake, I don’t like taxpayers money being used in this way, the whole system is wrong, but this seems to be the least worst option to free up housing andthe Council retain the asset.

    Still up for the whip-round for Navin though 🙂

  7. Praxis Reform

    Part of the problem is that if Harrow Council started building houses, the new residences would be snapped up below market cost after people had lived in them for a couple of years, so understandably this presents no inventive whatsoever to any Councils to even try to ameliorate the problem.

    Meanwhile, today I see that both the Telegraph and the Daily Mail are cautioning that London’s housing market looks like it might be overheating…

    At the same time, the penny has just dropped with the Harrow Labour Candidate announcing that he’s “Shocked” at British Gas’ 9.2% Gas and Electric price rises, and is now probably flabbergasted by Npower’s 10.4% energy price rise.

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