Place your bets..... Mass Evictions or Lower Rents

HAMISH_MCTAVISH

From April, rents will only be paid at 30% of the local average and capped at £400 for a four-bed and £250 for a one-bed home.

That limit means all housing benefit families in private property will be evicted from central London: even in outer London the cap will not cover their rent.

Anyone out of work for over a year will lose another 10% in housing benefit on top, and at the same time the value of housing benefit will fall every year, only rising by CPI inflation: over the last decade when rents rose by 65%, CPI only rose 17%.

What will be the net effect?

A mass exodus of the poor, those in work as well as the unemployed, the disabled along with pensioners who form 20% of those on housing benefit – all abruptly ejected from their homes, forced to move to the lowest rent, poorest zones all over the country.

This is social cleansing on an epic scale.

If the government expects private landlords to cut rents in response, a recent conference of landlords said demand is so high in the south-east – and anywhere with jobs – that they will re-let vacated properties easily.

Not only will ghettos of the poor grow, segregating society and local schools yet more sharply – but the poor will live in places that are cheap because there are no jobs, cementing in joblessness.

The homeless will spill on to every city's streets, London theatre-goers stepping over sleeping bags in the Strand again.

http://www.guardian.co.uk/commentisfree/2010/jul/13/housing-labour-failure-now-gets-worse

My money's on mass evictions being the main outcome.

Let's add a poll.....

Malcolm.

I predict a combination of Evictions & Lower rents.

It won't simply be one or the other, but somewhere in between.

edit: the move could have a knock-on impact of increasing demand/rents in surrounding areas.

silvercar

I predict tenants moving to cheaper areas.

mbga9pgf

Mass evictions and lots of repossessions is my bet!

Generali

Mass evictions and significantly lower rents too..

I reckon evictions first then, as landlords have trouble letting their properties, falling rents. Fundamentally by removing a subsidy on rented accommodation you are cutting demand. That means lower rents and fewer places rented.

The cut in prices should be seen in the inflation figures, the drop in demand should be seen in the reduced weighting given to rents in the inflation figures.

chucknorris

Maybe I have misunderstood this but I don't think the impact will be anywhere near as dramatic as the options Hamish has presented, if it was an option I would vote for 'a few evictions and some minor localised rent falls (particularly to LL's that have been abusing the system where the falls will be significant and rightly so)'.

It's not a fall to '30% of local rent' its a fall to the level of the 30th percentile of local rents which is a HUGE differnce and this starts next october NOt April (ie the fall wil be to the lower end of local rents but not to 30% of local rents)

Llubrevlis

Mass evictions and significantly lower rents too..

HAMISH_MCTAVISH wrote: »

http://www.guardian.co.uk/commentisfree/2010/jul/13/housing-labour-failure-now-gets-worse

My money's on mass evictions being the main outcome.

Let's add a poll.....

How about mass evictions then after these places empty for ages the desperate LL`s are begging then old tenants to move back in for the capped HB rate.

Llubrevlis

Mass evictions and significantly lower rents too..

chucknorris wrote: »

Maybe I have misunderstood this but I don't think the impact will be anywhere near as dramatic as the options Hamish has presented, if it was an option I would vote for 'a few evictions and some minor localised rent falls (particularly to LL's that have been abusing the system where the falls will be significant and rightly so)'.

It's not a fall to '30% of local rent' its a fall to the level of the 30th percentile of local rents which is a HUGE differnce and this starts next october NOt April (ie the fall wil be to the lower end of local rents but not to 30% of local rents)

I would be very grateful if someone could explain these new changes to housing benefit coming in next year.

As an example can we talk about a family with 2 adults and 2 kids under 10. So they qualify for a 2 bedroom place.

In NW11 at the moment they would qualify for 330 per week.

Will this go to 290 per week from next April?

Then next October what does that mean that it will go to one 30th percentile or something? I dont understand that bit.

A good link or good explanation would be much appreciated.

chucknorris

Llubrevlis wrote: »

I would be very grateful if someone could explain these new changes to housing benefit coming in next year.

As an example can we talk about a family with 2 adults and 2 kids under 10. So they qualify for a 2 bedroom place.

In NW11 at the moment they would qualify for 330 per week.

Will this go to 290 per week from next April?

Then next October what does that mean that it will go to one 30th percentile or something? I dont understand that bit.

A good link or good explanation would be much appreciated.

I think it means from the range (in value) of the rents in your local area 0% being the lowest and 100% being the highest, where the rent is on the 30% mark, so towards the lower end (however I could have misunderstood it, perhaps someone could confirm).

Yes in your example it would be reduced to £290 in April then possibly a bit further too depending on that 30th percentile figure for the area conserned

Llubrevlis

Mass evictions and significantly lower rents too..

Thanks Chuck Norris and then by the sound of it keep going down every year.

Maybe they were right those who said rents and house prices could be falling for the next decade.

chucknorris

Llubrevlis wrote: »

Thanks Chuck Norris and then by the sound of it keep going down every year.

Maybe they were right those who said rents and house prices could be falling for the next decade.

Personally I think that the impact will be low, but that's just my opinion