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

Procrastinator333

HAMISH_MCTAVISH wrote: »

Oh dear.......

Not as straightforward as some seem to think.

Concentrating all the benefits claimants that previously had access to 50% of housing stock, into just 30% of housing stock, will have some serious unintended consequences.

There is still a limited supply of housing.

Shuffling people from price point A to price point B does not create an overall surplus. Demand and rent/house prices will rise in the lowest priced 30% of houses, for sure.

Demand and price may or may not fall at the next bracket up, depending on how much money is diverted into rent from other things from those now unable to find a place in the bottom third.

If you're a current private renter of low cost housing, your "freedom and flexibility" to move will go out the window, as cheap places become as rare as rocking horse poo. You won't dare move. If your landlord decides to sell, you'll be screwed. If you need to move for a new job you'll be screwed.

If you're on benefits and get a cheap place, you won't dare move for the same reasons. Vacancy rates and voids at the bottom end will fall off a cliff, and prices below the 30th percentile will rise rapidly up towards it as demand outstrips supply.

Anyone with the ability to pay more will then be forced up the ladder.

Take the example of any one of the hundreds of potential FTB's that post on any of these boards, bragging about how much money they are saving by renting a cheap place and putting money away towards a deposit.

When they can no longer find a cheap place, because all the cheap places are full, because you've concentrated all the benefits crowd into just 30% of housing instead of giving them access to 50%, then some of the non benefits crowd who previously chose to live cheaply to save money will find they have no choice but to move up the ladder, spend more, and save less.

I don't doubt for a second this will cause some fluctuations around price in some parts of the country.

The cheaper areas will rise in price, as demand for them strengthens, the areas around the previous cut off price may fall, as demand for them weakens. Or may stay broadly the same, as prices in the bottom third rise and push up the median, and thus benefits allowances.

Low income workers renting for flexibility and not claiming benefits may find themselves trapped in their current rental, unable to move and have that flexibility for fear they won't get another place they can afford.

House prices at the top end are likely to rise, as streets or neighbourhoods become more desirable without benefits claimants living next door.

There will be unintended consequences.

There always are.

This is one of the biggest social experiments of all time. It'll be fascinating to see how it all pans out.

This is all a hypothetical, and even in a few years we could still be arguing about who is right. But imo that is a ridiculous piece of logic.

The fact is, £1.8bn is no longer going to be put in to the system by the government, and probably more by the time they are done. On that I think most would agree.

I can only see 2 options for where it goes - either a) tenants in some form or another pay this extra or b) landlords receive less rent. Any 3rd option? Maybe a mixture of the 2, but I can't think of any other outcome?

If you are a landlord in this bottom 30% and you have a sitting non housing benefit tenant are you going to turf them out for a HB tennant? No.

If you are a landlord with a sub 30% tennant, will you be willing to rent to a non hb tennant, even if at a slightly lower rate, probably yes - after all, what is to stop them reducing hb further?

If you are a landlord with a HB tenant who is facing a cut, but they are a good tenant, do you split the difference? Most likely, they find an extra £25, you take £25 less.

You assume those currently in the bottom 30% neatly shuffle up the ladder and pay more to make way for those to enter on the lower rungs. Some maybe, some won't have to (already live there), some will be given first choice over the HB tenants, some won't have the option (unemployment ain't going down).

Take your theory another step, say HB was reduced to the bottom 5%. Then what? They don't all just find extra money, or be homeless, the rents fall as lower rents are better than voids.

The only question is how big are the numbers affected. £1.8bn suggests there are quite a few out there, but I have no idea what the total rent bill is per annum. If say 200bn is paid in rent per annum, that is less than 1%. Plus the £1.8bn is over the course of the parliment. So maybe this is only 0.5% or 0.1% of the total rent cost per annum. That may make this meaningless anyway, but not the rather stretched logic train laid out at the start of this thread.

Anyway, as usual Chumish will just multipost until others run out of steam.

chopperharris

so lets recap , all those worsky scum have to work or lose benefits and NOW the roof over their heads.

In the meantime theres 500,000 jobs currently available including both part and full time available ,theres 2.5 million unemployed , and add another 1.5 million to be turfed off incapacity and a further 500, 000 minimum public sector jobs that are to go .

So just how the !!!! can no one in the media , parliament , or on here do any !!!!ing maths and ask just how nearly 5 million people can get a job when theres only half a million jobs there for them.Or ask yourself this just how WILL you get a job when , not if , your laid off with those numbers on the job market.....and there wont be any roof over your head if you are.Its going to be like those middle class tent cities in america.

So where will all these NEEDED jobs come from , its not like the DEMenTories are going to open up t'mines and shipyards , and then re-employ councils back to their heyday of all inhouse workers/crafstmen instead of contractors .......and for building more social housing that can be afforded by the benefit recipients , aka in the price bracket that the govt have now decided is the maximum amount for housing benefit , and in areas were there actually is mass employment.If this can be pulled off it would be made as a !!!!ing disney movie its that much of a fairy tale.

I reckon whats happening here is heading for turf them all out to scotland , give them independence and keep the oil revenues....all sorted.England will rise again and then finish off the wall once and for all.

silvercar

procrastinator33 wrote:

The only question is how big are the numbers affected. £1.8bn suggests there are quite a few out there, but I have no idea what the total rent bill is per annum. If say 200bn is paid in rent per annum, that is less than 1%. Plus the £1.8bn is over the course of the parliment. So maybe this is only 0.5% or 0.1% of the total rent cost per annum.

On the micro level:

Looking on rightmove in my area, the 30th percentile is 8% lower than the 50th percentile for 2 bed homes. Of course this is a rough estimate as a lot must be rented out before being listed (though I included let agreed properties). So will benefit tenants find that missing 8% or will landlords manage with 8% less rent and keep their tenants?

I actually think this is a problem in 2 years time or later. Initially landlords are making a decision on whether to keep a good tenant, later on a landlord will have to make a decision on whether to accept a tenant they know will struggle to afford the rent top-up.

HAMISH_MCTAVISH

silvercar wrote: »

On the micro level:

Looking on rightmove in my area, the 30th percentile is 8% lower than the 50th percentile for 2 bed homes. .

Interestingly, the total cuts in housing budget are around 7%, and the NHF estimates around 200,000 people will be seriously impacted.

diable

Money to be made in a Crisis..........

HAMISH_MCTAVISH

diable wrote: »

Money to be made in a Crisis..........

From HMO's, apparently.....

the_flying_pig

Procrastinator333 wrote: »

This is all a hypothetical, and even in a few years we could still be arguing about who is right. But imo that is a ridiculous piece of logic...

Agreed - H's posts was one of the fuzziest, most conflated & convulted pieces of 'logic' I've seen in quite some time.

He undermines his own [limited] credibility with such one-eyed nonsense... it would be perfectly sensible for him to say something like 'well yeah this will, ceteris paribus, clearly put downward pressure on prices in some areas but IMO the limited magnitude of this is such that its impact will be outweighed by other factors such as [X]', in the way that a 'bear' might say of [say] a decision by the MPC to keep rates low, but by responding in the way he does makes himself look either: (1) very foolish; or (2) so biased and desperate that you know you'll never have a sdnsible discussion with him.

He waffles on about 'supply and demand' continually but won't acknowledge a simple, verifiable, instance of demand being pushed down somewhat.

Llubrevlis

HAMISH_MCTAVISH wrote: »

Oh dear.......



Shuffling people from price point A to price point B does not create an overall surplus. Demand and rent/house prices will rise in the lowest priced 30% of houses, for sure.

You are assuming that LL`s will evict instead of dropping the rents.

With all these evictions are they going to find someone to rent to who will be paying out of their own pocket?

If they do will it be at the same high rent that the Gov paid, or much lower?


Will they risk having their property empty for ages and risking getting new tenants who may trash the place.

Or will they just reduce the rent and keep the reliable tenants there at the reduced rate.

Degenerate

HAMISH_MCTAVISH wrote: »

Expect an upsurge in drug dealing and prostitution then....

Every cloud...

carolt

This article:

http://www.timesonline.co.uk/tol/news/politics/article6973993.ece

shows clearly that some rents were being paid for out of the old system that were simply made-up numbers by landlords milking the system for all its worth. There's no way the landlord "being paid £2,875 a week for a seven-bedroom house in the north London borough of Brent" under the old system would now find a private renter either rich enough or enough of a mug to pay that out of their own pockets.

Clearly bonkers.

Likewise the "claimant in the east London borough of Hackney, who is receiving £900 a week for a seven-bedroom house".

There is no doubt that inflated LHA figures encouraged inflated rents. Not supported by the fundamentals - no private tenant could or would match those figures.

I recently read on here a poster talking about a friend of theirs whose landlord was turfing them out of their rented property to get a higher rent from a tenant on benefits, as the LHA was set so high in that area and the greedy landlord thought he could get more (this was just before the budget announcement re new limits on LHA). Ha ha. Bet the landlord's feeling a bit of a prat now - lost a very good reliable tenant, but won't get the extra rent he was hoping for now.

No - the new moves will clearly act to bring down rents overall - excellent news.