Dear Social Landlord,
I have turned overnight into an arch capitalist and here I show you how to (a) increase your rent roll, (b) take all tenants out of the bedroom tax and (c) severely f*ck over the coalition government.
The answer is very simple. I will lease all your properties with a HB claiming tenant from you keeping all social tenants in place at the full rent plus 10%. Your income therefore increases by 10%. Because that would make a private landlord and the now social tenant a private tenant they would claim Local Housing Allowance and not Housing Benefit.
So using Liverpool figures as an example – a low rent area – we see the following.
(a) a 3 bed property you rent for £83pw you will now receive £83 + £8.30 a total of £91.30 and I will charge the tenant the LHA rate of £91.32p per week. I therefore make 2p per week in this circumstance and the coalition pays out £91.32pw instead of £62.25 in HB this being the £83pw less 25% deduction.
(b) A 3 bed property with a 2 bed need with see the rent rise to the 2 bed LHA rate of £109.62 per week and you the landlord will get the same £91.30 which means the tenant doesn’t get hit by the bedroom tax and I pocket £18.32 per week from this arrangement. The coalition pays out £38.24 more pw in LHA (£109.62 less £71.38 this being the £83pw rent less the 14% deduction)
So lets assume the 11,680 under occupied properties in Liverpool are 50% of type (a) above and 50% type (b)
- The landlord income increases by 11,680 x £8.30 or by £96,944 per week or £5.05m per year.
- The bedroom tax tenant has no shortfall to pay and of course the landlord has no financial risk.
- I make £9.17pw on average from these 11.680 properties which is £107,105.60 per week or £5.59m per year.
- The coalition forks out £393,094.40 per week more or £20.51m more per year.
- The tenant does not have to fork out the other £9.87m per year and there is £9.87m additional in the local economy.
Sorry everybody I must have wasted your time reading this as that nice Mr Duncan Smith and equally nice Mr Cameron and Mr Webb says that the bedroom tax is simply treating the social tenant the same as the private tenant!!
PS Of course the above is parody to reflect the huge additional amounts of benefit paid to private landlords and if I used London rent figures it would be so much higher. That said and in all seriousness is there anything at all to stop the above social landlord leasing to a private one in the manner I outline? I don’t think there is!
PPS – This would of course level the playing-field between social and private rented and cost the HB bill a mere £2.17bn more per year base on current figures
PPPS – I would then earn £591.43m in the first year and enough to be a cabinet minister and of course pay thruppence per year in tax
Courtesy of Joe Halewood at SPeye