the council is claiming the sale of their assets for less than they’re worth is a success

Hang on, you just said the property was valued at £185,000 but sold at £221,000.

If the council owns empty properties in need of renovation, or even some building land, it now has the funds to create more than one dwelling.

@Flowerpower

Yes, in theory they do. But will they reinvest the proceeds into building houses? No, because they’re ideologically opposed to such a thing.

The idea of giving access to “the dream of home ownership” to everyone is bunk in any case. The dream of home ownership is ALREADY open to all – however, home ownership itself is not.

This article doesn’t quite make sense.

Did the Council sell at an undervalue? No – it realised £36k more than the property’s valuation or about 20%. Making 20% more than expected on the whole portfolio would mean it realised a large profit, not a loss.

The allegation seems to be that instead it would have been better for the Council to have invested the £6k refurbishment cost itself so as to have been able to sell the property for the £311k it ultimately went for. So, is this a call for the Council to be given half a million or so to refurbish all 100 properties prior to sale to enable it to make a much bigger profit that it could reinvest in housing and the other very important things that Councils do?

No, Mr Burnham wouldn’t want that.

It seems to be a suggestion that instead the Council should have spent £6k on the property and then rented it out on a social tenancy to save it some money on the cost of housing a family outside the Borough. That £6k would have amounted to a fairly large chunk of the rent on the property for a year.

So, to save perhaps £15k a year (I didn’t see the programme so don’t know how big the flat was, but I thought that it was considered to be rare that housing benefits would be a lot more than this so I’m being generous) the Council should have foregone £221k and spent £6k taken from other budgets?

That doesn’t sound like that great a deal.

Lucky for us that his particular brand of innumeracy isn’t still in government. Shame that it has been replaced by another brand but there we go.

@4

Perhaps you missed the part about the rising numbers of homeless people in H&F?

“As private rents and homelessness in the borough spiral simultaneously, the council are only creating problems for themselves, as they will have to pay out more in housing benefit in the long term (although cuts to this provision will mean that the poorest are driven out of the borough)”.

Hammersmith & Fulham: your local asset-stripping council.

LBH&F’s Cabinet report makes for interesting reading
http://democracy.lbhf.gov.uk/mgConvert2PDF.aspx?ID=1549&T=10

Especially this part

“Sales and lettings of stock (as envisaged by this report) must be motivated purely by bona fide housing objectives. In particular they must not be tainted by any considerations of potential electoral advantage (any member or officer pursuing, or wilfully blind to, such motives would act unlawfully and not be protected by any legal advice).”

(Hat-tip Cllr Stephen Cowan)

http://www.thecowanreport.com/

“Over 10,000 people are waiting for affordable housing in Hammersmith and Fulham.”

But as anyone who’s ever had any dealings with them knows, a majority of H&F’s Councillors do not accept the rationale for the existence of social housing, or at least the rationale for the existence of social housing within their Borough.

Apologies to Mr Slaughter, he is not Andy Burnham!

@botzarelli

The first floor flat required renovation, otherwise it would have been inhabitable. The £6k that would have cost would have added £90k to the value of the property, and saved the council money in housing benefit payments.

Is that do difficult to understand?

@ 2 Matt Zarb-Cousin

will they reinvest the proceeds into building houses? No, because they’re ideologically opposed to such a thing.

oh, are they now?

This from the council’s updated (2010) housing strategy document.

H&F aims to build a minimum of 6150 additional dwellings over the next ten years and 2460 additional affordable dwellings.

@ 6

Most of the people waiting for “affordable housing” in Hammersmith & Fulham do not qualify for “social housing”.

The need locally is for ‘intermediate’ housing.

In H&K 32% of the housing stock is already social housing (as opposed to 24% in London).

@Flowerpower

They aim to build them, but for what purpose? If this evidence is anything to go by, it’s to line the pockets of private landlords.

Worth remembering that not only did they sell the property at undervalue, but they are now deprived of that revenue stream – all for a fast buck. They’ll end up paying more out in housing benefit and they haven’t helped council tenants become homeowners (although the merits of that in itself are up for debate).

A private landlord has profited from the councils incompetence, and they’ve got the audacity to crow about it.

Yes, for £6k they’d have saved money in HB payments. How much HB would be saved by using that flat for social tenants? Let’s assume that it was a 4 bedroom flat so that the highest possible rate of HB that could have been paid for renting a similar property would be £400pw or £20,800 a year. That’s being generous as £311k surely doesn’t buy you a refurbished 4 bedroom flat in H&F (I couldn’t find anything with more than 2 beds on rightmove around that level).

Now, I can see that if a H&F tenant is getting HB to pay for rent on a property owned by H&F that money comes out of H&F’s HB budget and back in to its rent budget. So, after accounting for the admin of the property, ongoing maintenance etc, we might get to the figure of saving a quarter on the HB. That is, around £15k a year saved.

What is not at all clear is why spending £6k to save £15k a year is better than getting £221k. That’s 15 years worth of savings in one hit. There’s a case also to be made for investing in the money to maximise the revenue by refurbishing first and so getting nearly 25 years worth of HB savings out of each property.

The real issue is on what H&F does with the money and whether it fritters it away on things or uses it wisely.

Oooooops!

Total pratfall for And Slaughter MP, I’m afraid.

In the OP he asserts that

…private rents and homelessness in the borough spiral simultaneously….

and links to a blog posting, as if to cite evidence in support of his contention.

Now, when he wrote the OP, the link did indeed connect to a story on the Shepherds Bush blog claiming that homelessness in Hammersmith & Fulham has shot up 92%.

Embarrassingly for Andy Slaughter, the blog post was UPDATED and CORRECTED at 11 am yesterday with the true facts:

the number of homeless decisions taken for the whole year 2010-11 is actually down 9%.

Homelessness has consistently fallen in the borough over the last four years. The number of applications received in 2010-11 is down more than 60% since 2007-08. ……..

The number of people presenting themselves to the council as homeless is also down by 3.5% year on year. These facts clearly demonstrate there is no major increase in homelessness in the borough.

Okay, it could happen to anyone. Stories change.

But Andy Slaughter is the local Labour MP.

Surely he ought to know if homelessness is spiralling upwards or going down?

@Flowerpower

Do you think, as a consequence of the housing benefit changes, homelessness will go up for down? Go on, have a guess.

Hammersmith and Fulham council have a tradition of financial engineering.

In the late 1980s, the Conservative controlled council was speculating on interest rates falling with interest rate swaps:

In June 1988 the Audit Commission was tipped off by someone working on the swaps desk of Goldman Sachs that the London Borough of Hammersmith and Fulham had a massive exposure to interest rate swaps. When the commission contacted the council, the chief executive told them not to worry as “everybody knows that interest rates are going to fall”; the treasurer thought the interest rate swaps were a ‘nice little earner’. The controller of the commission, Howard Davies realised that the council had put all of its positions on interest rates going down; he sent a team in to investigate. . . .
http://en.wikipedia.org/wiki/Interest_rate_swap

Unfortunately, interest rates went up, not down. The chief executive had screwed up. Fortunately for local rate payers, the Audit Commission managed to convince the courts that what the council had been doing was ultra vires (beyond its powers) and that the banks involved should have known that. The banks had to swallow the losses – which ran to a couple of hundred million, as I recall.

@ Flowerpower

The blog post was updated, yes, but was it actually corrected?

The two figures can exist together and don’t necessarily contradict one another as they are measuring slightly different things at different time periods.

The Council states “that the number of homeless decisions taken for the whole year 2010-11 is actually down 9%.”

However, the original figure in the Shepherds Bush Blog post comes from a DCLG report of the 9th of June 2011 via the Guardian and refers to the number of people submitting Homelessness applications to Local Authorities during the months Jan to March 2011. The Guardian states that there is a 92% increase in homelessness applications submitted to H&F Council in this 3 month period in 2011 over the same 3 month period in 2010.

It could be that there has been an overall decrease in homeless decisions of 9% over the year 2010-11 as the Council states. However, if the DCLG is correct, there is a huge increase in the number of people reporting as homeless to the Council when compared to the comparable period last year.

Also, neither of these figures will record those who approach the Council for advice and are told not to bother submitting a formal application as there’s no chance of success.

@ 15 Matt Zarb-Cousin

Do you think, as a consequence of the housing benefit changes, homelessness will go up for down? Go on, have a guess.