Who are the benefit scroungers who rip off Housing Benefit?

Who are the benefit scroungers who rip off Housing Benefit?

Obviously, the people to whom the multi billion pound benefit is paid!

But who it is actually paid to?

Despite what the Daily Hate Mail says, the benefit is not paid to unwaged people who live in rented accommodation, it is actually paid to the owners of the rented properties, some of whom are very rich individuals and most of whom make a killing from their property portfolios.

It is still possible to buy a 3 bedroom house in my area for £150K, a 25 year mortgage on such a property would be approximately £800 pcm. If we forget the 13th month for the sake of simplicity, that's £200 per week. Even with Cameron's cap on housing benefit a landlord can still scrounge a 100% profit out of a buy to let housing benefit house bought today, a good investment.

As time goes by house prices rise and rents rise too. Mortgage costs fluctuate but not by a huge amount. So if I had bought a house for £60k 12 years ago my mortgage repayments would now be about £250 pcm, £65 a week and I could be scrounging a 400% state profit from my investment, without taking into account the increased value of the initial investment. If my investment term was coming to its end I would probably be paying a mortgage of about £10 a week – and still be getting £400 per week rent – nice work if you can get it!

Many of the homes that are being rented for these giddy profits are former council houses, many of the people for whom the rents are being paid are the people who would have been housed by councils in days gone by - if the council housing stock hadn't been sold off.

Council House / Housing Association rents in this area are about £70 a week.

It is not rampant socialism or un-conservative to suggest that if the state is paying for housing the poorest in our communities that the state should get the best bang for its bucks. Paying Rachman type landlords to become multi millionaires from state benefits is not good stewardship of the public purse.

The £11 billion paid in housing benefit each year would build a hell of a lot of social housing. Using it to provide social housing would be the best economic answer to this part of the benefit overspend.


  1. Interesting, some years ago I was renting a flat in Butetown, my rent was £275 a month, but the council would only pay £250 a month - claiming that £250 a month was a reasonable maximum for my area. Now at the time Butetown consisted of a large tranch of council and housing association property, maximum rent around £200 per month for a one bedroom unfurnished flat. The private rental sector were new builds (mainly buy to let properties) where the rental for a one bed unfurnished was £350 per month.

    It was true that elsewhere - though not in Butetown - there were furnished bedsits for £40 per week. Ten years ago there seemed to be a consensus that the unemployed should sell their belongings and move into one of these bedsits!

    Looking at the same buy to let properties in Cardiff you are probably talking of £500 - £750 per month for one bedroomed flats, most furnished.

    I welcome caps on rent - but only if its realistic, I'd welcome investment in social housing. We have some of the most expensive rented property in Europe, and some of that has been as a result of government policy in a number of areas. The buy to let boom certainly was helped by it.

  2. The buy-to-let brigade have helped spiral up house prices and rental prices over the past decade. A tax on their earnings - for using a home as a business - would recoup some profits and might also help to depress private rental costs.
    As you say, many ex-council houses are now rented out so you can see a council house rented for £280 a month next to a private rented house for £450 a month. It's a nonsense.

  3. High rents nothing to do with high levels of immigration then?