Cheaper rents

macaque_2

Just like art prices being bid up by American museums, the UK rental market has been inflated by wildly generous housing benefit payments. Its good to see HMG taking £1.8b p.a. off the table. The knock on effect will be lower rents for private renters and cheaper homes for FTBs.

Housing benefit: New maximum limit of £400 a week for properties with more than three bedrooms, £250 a week for a one-bedroom flat, £290 for a two-bedroom property and £340 for a three-bed property, to save £1.8bn a year by the end of the Parliament.

http://news.bbc.co.uk/1/hi/politics/10374475.stm

IveSeenTheLight

macaque wrote: »

Just like art prices being bid up by American museums, the UK rental market has been inflated by wildly generous housing benefit payments. Its good to see HMG taking £1.8b p.a. off the table. The knock on effect will be lower rents for private renters and cheaper homes for FTBs.



http://news.bbc.co.uk/1/hi/politics/10374475.stm

For most rental properties throughout the UK, this does not make a difference.

I rent out a two bed flat for £850.
I've only ever rented privately, but the LHA allowance covers £290 per week or £1160 per month.
That more than covers the rent for most 2 bed property in the UK.

I'm guessing it will be the same throughout the property ranges

phil_b_2

macaque wrote: »

Housing benefit: New maximum limit of £400 a week for properties with more than three bedrooms[/URL]

How many housing-benefit funded 3-bed rentals are there costing over £1,600 per month?

IveSeenTheLight

phil_b wrote: »

How many housing-benefit funded 3-bed rentals are there costing over £1,600 per month?

The limit on three bed rentals is £340 per week or effectively £1360 per 4 week month.
It's properties more than 3 bed i.e. 4 beds and above that get the £400 per week or £1600 per 4 week month

Still, I'm shocked for it to be so high

Generali

Per the other thread, the limit for HB will also be the 30th percentile of local rents (link)

From October 2011 the local housing allowance rate would be set at the 30th percentile of local rents, the government said. At present, the system pays at the median level of rent in an area.

Ian Mulheirn, director of the Social Market Foundation, agreed that the changes risked concentrating areas of deprivation and creating Parisian-style banlieues “around the edge of our big cities”.

I agree with the second part of this prediction. I think it's part of a trend since the 1960s where Government policies have served to create a group of people that rely on the state for the majority of their incomes for the majority of their lives and then forced them to live together.

Procrastinator333

This only starts 2011, so will be a while till it has any impact, but when it does, is there any reason why this isn't very simply - £1.8bn gone from landlords rent books overnight?

Perhaps they squeeze a bit more out of private rental, but if the potential was there to get £1.8bn out of them, they would have done it already.

I have no idea how many properties are actually rented out to people on HB, but if the government thinks it can save £1.8bn, it must be quite a few?

Generali

Procrastinator333 wrote: »

This only starts 2011, so will be a while till it has any impact, but when it does, is there any reason why this isn't very simply - £1.8bn gone from landlords rent books overnight?

Perhaps they squeeze a bit more out of private rental, but if the potential was there to get £1.8bn out of them, they would have done it already.

I have no idea how many properties are actually rented out to people on HB, but if the government thinks it can save £1.8bn, it must be quite a few?

Not all of this will be paid by Landlords. Tenants in total will to some extent subsidise the rent by more. HB isn't just paid to unemployed people, it is also used as a wage subsidy.

HAMISH_MCTAVISH

All this will do is create ghettos as all the people on benefits get concentrated into the cheaper areas of every town, squeezing out the existing renters from those areas who do not get subsidised.

So the private renters who always brag about how much money they are saving versus buying will have to move up a notch in the housing chain, and won't be able to save nearly as much.

And it's actually going to be good for property values in the nicer areas, as they'll no longer have chavs on benefits living next door.

HAMISH_MCTAVISH

Procrastinator333 wrote: »

is there any reason why this isn't very simply - £1.8bn gone from landlords rent books overnight?

Yes.

It will more likely be £1.8bn gone from the "renting is soooooo much cheaper than buying, look how much money I'm saving every month" crowds savings accounts overnight.;)

Procrastinator333

HAMISH_MCTAVISH wrote: »

All this will do is create ghettos as all the people on benefits get concentrated into the cheaper areas of every town, squeezing out the existing renters from those areas who do not get subsidised.

So the private renters who always brag about how much money they are saving versus buying will have to move up a notch in the housing chain, and won't be able to save nearly as much.

And it's actually going to be good for property values in the nicer areas, as they'll no longer have chavs on benefits living next door.

You are assuming that those saving for deposits etc live in the cheaper area.

chucky

macaque wrote: »

Just like art prices being bid up by American museums, the UK rental market has been inflated by wildly generous housing benefit payments. Its good to see HMG taking £1.8b p.a. off the table. The knock on effect will be lower rents for private renters and cheaper homes for FTBs.



http://news.bbc.co.uk/1/hi/politics/10374475.stm

my good friend Macaque...

this won't really affect rents IMO... the biggest factor that will have an affect (or is it effect) on rents is disposable income.

that's going to be reduced in the 12-24 months for many... this housing benefit stuff is nothing compared to that...