Private Landlords to Evict up to 200,000 tenants because of benefits cuts

vivatifosi

tartanterra wrote: »

If this report is accurate, then standby for a boom in HMO's.

I wondered whether that would happen too.

silvercar

vivatifosi wrote: »

I wondered whether that would happen too.

I suspect that the number of people stuck in a miserable relationship, but unable to afford to separate, will increase.

tartanterra

vivatifosi wrote: »

I wondered whether that would happen too.

I wonder if the government did as well?

Have the Tory's binned the proposed legislation from Labour to limit HMO's?

amcluesent

>This is one of the biggest social experiments of all time.<

Yep. In pretty much every way, the public sector is at least 5 years behind the private sector. So, to understand what's coming, just look at what happened in UK plc from 2000-2005. All the more so, now that arch cost cutter Browne has appeared from BP to lead the HMG slashing.

Essentially, everything that doesn't need 1-2-1 delivery will be pushed off-shore. So get used to speaking to 'John' in Bangalore when you want to discuss your tax return!

The public-sector workforce remaining in the UK will be split. Firstly, 75% will be casualised on zero hours contracts, rolling contracts etc. with no job security and pay trending down to towards the minimum wage as EEs will take up the work we don't fancy, just as they have in warehousing and agricultural.

The 15% middle-managers will be 'right sized' and pushed out on legally diminished early retirement deals and not replaced, as has happened across industry.

The remaining 5%, the hyper-elite around Whitehall, will take their lead from FTSE100 executives, with undreamed of perks and income well in excess of £1M/year based on bonuses for 'quick fixes', but no thought to the future, so long at they get to 40% cuts by 2014.

This will create a nice cash reserve for the Treasury to use in reducing income tax by 2p in order to buy votes at the 2015 election.

HAMISH_MCTAVISH

tartanterra wrote: »

If this report is accurate, then standby for a boom in HMO's.

Such a boom was inevitable anyway. But this move will hasten it along.

I've already stated clearly I think a large growth of HMO's will be the only way society will be able to house increasing population.

Growing population and a a long term systemic failure to build enough houses means a flat of your own is probably a pipe dream for many of todays youth.

BTL is very last decade. Landlords of the future will be making a killing from HMO on a massive scale.

Don't know what to do with that £250K 5 bed house Granny left you? Rent it by the month as a house and you might get 12K a year. Rent it by the room by the week and you'll get more like 24K a year..... Phenomenal yields for those that can make the effort.

HAMISH_MCTAVISH

tartanterra wrote: »

Have the Tory's binned the proposed legislation from Labour to limit HMO's?

Yes they have.

They also know that the shortage in housing cannot be overcome any other way.

And of course, the traditional Tory voters are the property owning classes that will make the biggest killing from it.

amcluesent

>Don't know what to do with that £250K 5 bed house Granny left you?<

The interesting thing is what happens if you just leave it empty? The Tories may value property rights, but I wonder if political pressure around empty homes/holiday homes etc. will increase so that legal action will be taken unless you rent out?

HAMISH_MCTAVISH

carolt wrote: »

I think that what Hamish's OP forgot is that whilst it may be good times ahead for those offering cheap and cheerful rentals in the bottom 30% of the market, it will be desperate straits ahead for the remaining 70% of the market.
.

You really aren't a maths teacher, are you carol?

Benefits claimants previously had access to 50% or so of the market.

Benefits claimants will in the future only have access to 30% or so of the market.

This will result in an increased concentration of benefits claimants at the bottom end of the market.

This does not mean 20% of properties become vacant, leading to voids or "greater choice" for people like you.

As benefits claimants are not 100% of the market at either the 30th percentile or the 50th percentile.

And everyone still has to live somewhere......

So all you do is shuffle the people least able to pay from the higher cost houses into lower cost ones, and shuffle the people most able to pay more from the lower cost houses into the higher cost ones.

It will take time, and there will be market disruption, but it will inevitably happen.

And you also seem to assume that the 1.8 billion reduction in benefits will all be coming from landlords pockets, and not diverted from other areas of the economy. Which is a fallacious assumption.

Housing is an absolute priority for spend, so unless your premise is that 100% of people living in cheaper houses are already paying 100% of their after tax/food/utilities money to landlords, then this 1.8 billion savings will not be coming from the pockets of landlords exclusively.

That money will not neccessarily be "removed from the housing market".... It will be removed from the economy in some regard, but we do not yet know from where.

As an example, lets take a prospective housing benefit tenant, we'll call her 'Ermentrude'.....

Now Ermentrude currently receives housing benefit to the tune of £200 a week. Under the new rules Ermentrude can only get £150 a week.

So Ermentrude goes to her landlord and says "you have to drop the rent".

Her landlord, a nice chap called Hamish, replies "F*ck off, pay up or you're out".

So Ermentrude takes a look around for a cheaper place, and can't find one, because there are thousands of other Ermentrudes out there doing exactly the same thing.

All the cheap places are taken.

So Ermentrude has two choices. Come up with the rent, or be homeless.

Ermentrude decides a roof over her head is the most important thing, so examines her budget for areas she can make a savings. As Ermentrude is on benefits, she obviously has a Sky subscription, smokes 40 a day, and drinks like a fish. (according to all the frothers, anyway)

Ermentrude decides the smoking will have to go, and cuts down on the booze as well.

Ermentrude pays the rent.

The landlords income remains the same. The governments income declines through less tax revenue on fags and booze, (by almost exactly the amount it "saved" on benefits reduction). The tobacconists income declines. The shareholder of Phillip Morris's income declines.

That £50 a week came out of the economy, but not out of the landlords pocket........

The reality will probably be somewhere in between the two extremes.

Rents in some areas will rise a bit, in others will decline a bit. Spending on non-essentials will certainly decrease.

But chances are there will be very little impact to rents as an overall average.

amcluesent

>an increased concentration of benefits claimants at the bottom end of the market.<

Student fees are spiralling and would-be graduates are realising that £20K debt but no jobs prospects is a silly idea. I'm thinking that buying up tatty student digs around hopeless 'universities' could be the best bet to acquire HMO stock.

silvercar

Now Ermentrude currently receives housing benefit to the tune of £200 a week. Under the new rules Ermentrude can only get £150 a week.

So Ermentrude goes to her landlord and says "you have to drop the rent".

Her landlord, a nice chap called Hamish, replies "F*ck off, pay up or you're out".

So Ermentrude takes a look around for a cheaper place, and can't find one, because there are thousands of other Ermentrudes out there doing exactly the same thing.

All the cheap places are taken.

So Ermentrude has two choices. Come up with the rent, or be homeless.

Ermentrude decides a roof over her head is the most important thing, so examines her budget for areas she can make a savings. As Ermentrude is on benefits, she obviously has a Sky subscription, smokes 40 a day, and drinks like a fish. (according to all the frothers, anyway)

Ermentrude decides the smoking will have to go, and cuts down on the booze as well.

Ermentrude pays the rent.

Or:

Ermentrude has already given up sky and smoking and there is nothing left to cut. So she falls behind with the rent.

Hamish puts up with this for a while, after all Ermentrude is a sweety and keeps the house immaculate and has little kids (never forget the kids).

Eventually the shortfall adds up and Ermentrude is 2 months behind with the rent and Hamish is worried.

Hamish phones the council and the council start paying Hamish direct.

Hamish is pee'd off that there is a shortfall but he is now getting the rent direct from the council and Ermentrude is keeping the house nice and now her little kids have just got a place at a half decent school. Hamish polishes his halo and decides that he will put up with the low rent, after all a tenant he knows is safer than one he doesn't and a new tenant could be messy/ stroppy/ abscond/ fall behind with the rent.