Britain Today,  Housing

Rent at Five Per Cent of Income

Much anger – as defined by the angry speaker – at comments by the deputy Leader of Conservative-controlled Westminster City Council, Robert Davis. Although it is unclear which PR firm he was speaking to as mentioned to by the piece, what is clear is that, in the context of providing affording mortgages for first time buyers, he referred to salaries of between £50 and £80,000 as basic level.

The national average is in the mid £20k range, and minimum wage returns some £12k.

Various irreverent thoughts occurred. First, just how would Westminster City Council seek to free-up affordable accommodation (and not just by selling redevelopment land for less than the asking price). Secondly, whether or not Rachel Reeves would consider the pay range given by Davis to be not all that much.

Thirdly, which is the main focus of this piece, maybe Davis was basing this on a range considerably less than Bob Crow’s salary of £145k which has not persuaded him to move-out of his North London council house for which he pays approximately £600 per month. Just as questions of this come up when Crow speaks on the effects of Tory policies past and present, so too does his lack of self-awareness in living in a property with a heavily subsidized rent and guarantee of tenancy plus an on-hand maintenance department.

His most recent exculpation that he “was born in a council house and as far as [he is] concerned, [he] will die in one” appears irrelevant and manufactured, to say the least. Quite apart such petulant indignation being just as easily countered by the observation that he was neither (I assume) born at home nor returned from the maternity hospital to his current abode, I was unaware of any self-evident fact that we should expect to come headlong into this world at the same location and in same circumstances as we go out feetwards.

Furthermore, I imagine Papa Crow was of considerably more modest economic circumstances in a much less modestly maintained council house than Baby Crow now enjoys: the first being blinkingly obvious considering the latter’s salary which places him in the top 2% of earners, and the second hinted at by photographs of his current property.

(That said, at least Crow pays rent, unlike everyone else in his street as he says. Unemployed recipients of housing benefit might take this as an implied reproach.)

Despite willingness to reproach other high earners for lack of moral fibre, by his own admission, Crow feels no moral duty to move-out: so, by extension, no awareness of how others might see his conduct. His appeals to the distress his family would feel at being compelled to move from their established social circles ring hollow with me, not least because a brief period of saving from a £145k salary would give a deposit for a property which would offset any distress. And a pick of properties in the immediate area (maybe even the same street if his quip about others’ not paying rent was a bizarrely disdainful reproach towards mortgages rather than housing benefit).

As part of his rambling stream of consciousness in defence of his continued tenancy, he states that the only moral duty is not to avail oneself of right-to-buy offers but leave housing stock available for future generations. The immediate relief he could bring to the present generation by freeing-up this property thirty, forty years before his anticipated demise appears lost on him.

Not that I would have council or housing association tenants compelled to move-out if their salary increases. Instead, I would be amenable to increased rent based on incremental increases in income. Where precisely to start this would require more complex analysis. Although I would see it considerably above the average income, I would have it far below 10 times more than the minimum wage and more than five times more than the national average.

Although where to halt the increases also would require further consideration, I would be amenable to doing so noticeably below the market value of the property.

If this sounds like advocating means testing for council/social housing rents, then that is exactly what it is. Such rents and maintenance already is heavily subsidized – and guaranteed well below the market value – as an effective state benefit. The strategic failure to replenish social housing stock depleted under right-to-buy and general increases in applicants is deeper than one or two super-salaried individuals remaining in such properties.

Any number of the myriad state benefits/top-ups for those in employment are phased out with increasing income – or should be – and there comes a point when expecting the same amount of state assistance is akin to drawing Jobseekers Allowance even when in employment.

The housing shortage will not be struck-down by a magic bullet such as halting right-to-buy, or salary-indexed rent increases. It would, however, be more equitable in the same way that stripping Fred Goodwin of his pension would be despite not plugging the hole in the economic chasm he left.

Nor would I have concerns that I am peddling the notion that social housing only is there for the poor of society. It should be there for those who otherwise cannot afford properties or are prepared to forgo proportionately a little bit more of their salaries for more secure tenancies and on-hand maintenance departments. Under real and global terms, unless you are Rachel Reeves, I would have difficulty taking seriously any argument that the national average income is a sign of impoverishment.