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

chucknorris

carolt wrote: »

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.

Your examples demonstrate to me that it will not so much effect the mainstream rental market but target the rental properties that certain LL's were abusing the system with. Which is of course a good thing as it is public (our) money being wasted, so it would appear that it will mainly stop excessive profit being made on certain properties, rather than drag the entire rental market down.

carolt

But who knows how common this was?

chucknorris

carolt wrote: »

But who knows how common this was?

I would think your examples were the more extreme but there will be a lot of more minor abuse

FATBALLZ

What a scaremongering load of crap. There will be less money to go round paying rents, therefore rental prices will on average come down. Simple as that. I don't doubt some thick landlords will boot claimants out in the deluded assumption that a big queue of non-claimant tenants will be desperate to move in at sky-high prices but in time they'll realise it won't happen.

ruggedtoast

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.

I really shudder to think the amount of time it spent you to think of that load of rubbish, and then write it out here, and then invent some putative Ermentrude to continue your non sequitur.

All i can say is enjoy being a landlord of an HMO filled with benefit claimants. This is one case where I can wholeheartedly say that you deserve it.

IveSeenTheLight

carolt wrote: »

I take it from that comment, ISTL, that you do see that coming.

Interesting, you being a landlord and all.

It wasn't my scenario it was yours:)
Don't try to inflict your opinions as my thoughts.

The area I lease my properties out to is an extremely strong rental market..

This year I raised my rent.
If (and it's still a big if) there is a reduction in demand for rental properties, then more likely rents would stagnate rather than be driven upwards.

If (and it's an even bigger if given current circumstances) demand was so low that the suppliers had to be more competative with their pricing, I could accomodate a lowering of rents and would be prepared to do so.
I would only go so far mind you then have to reassess the buisiness model, potentially selling, reducing the amount of rental stock, thus meaning there is less competition between the suppliers.

as always, the market dictates the price.

carolt

Absolutely. And the market is influence heavily (the demand part) by the amount of cash the govt throws at the situation, as we both know.

Let's just say that if it leads to landlords selling up to redress the balance, I won't be weeping.

IveSeenTheLight

carolt wrote: »

Absolutely. And the market is influence heavily (the demand part) by the amount of cash the govt throws at the situation, as we both know.

Let's just say that if it leads to landlords selling up to redress the balance, I won't be weeping.

carolt wrote: »

Absolutely. And if I was in housing need, I'd rent in a cheaper place, or a smaller place, or kip on a friend's floor.

No-one's going to choose a place to live long-term that they simply can't afford.

It seems that taking the LHA part is assuming that there will be an impact on the supply, but lets think about the demand for a second.

If there is a reduction in prices, would this bring property into the afforability for those who "kip on a friends floor", stay with parents, in shared accomodation etc etc to be able to get a place of their own, thus increasing demand again.

Things are not always as simple or as one sided as you may think

carolt

No.

As my favourite poem in the whole world puts it so perfectly:

Louis MacNeice, "Snow"

The room was suddenly rich and the great bay-window was
Spawning snow and pink roses against it
Soundlessly collateral and incompatible:
World is suddener than we fancy it.

World is crazier and more of it than we think,
Incorrigibly plural. I peel and portion
A tangerine and spit the pips and feel
The drunkenness of things being various.

And the fire flames with a bubbling sound for world
Is more spiteful and gay than one supposes –
On the tongue on the eyes on the ears in the palms of one's hands –
There is more than glass between the snow and the huge roses.

IveSeenTheLight

carolt wrote: »

No.

Ignoring all the impacts will not make them go away.
It's akin to puttin gyour head in the sand