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

tincans

Mass evictions and significantly lower rents too..

IveSeenTheLight wrote: »

The thing is, there is only a limited supply of properties in the cheaper area.
Unless there is an upsurge in landlords wishing to take on cheaper area properties.

Let's say theres 20 renters.
10 in the cheaper area, 10 in the more expensive area.

4 of those in the more expensive area find the HB does not cover the rent so look to rent in the cheaper area.
They however find that the demand in the cheaper area goes up and thus the landlords could opt to charge more

The more expensive area finds that it is over supplied.
So the LL's could try and lower their rents to fill the void, but also the extra supply in the cheaper area, may find they need a property and have to compensate the rent to secure the property.

The more expensive area could see the LL's selling up if there is limited demand or falling rents.

Going back to Generali's list


I think you could see the lower end rates rising, the higher end lowering thus a closing of the gap, also a reduction in the higher end but an increase in the 30th percentile

As an example
List them in numerical order:
£50, £130, £140, £150, £160, £170, £1,200, £2,500

The 30th percentile is now between £130 and £140 instead of the previous list of £110

Whats this, a landlords guide to fantasy economics ?

When there is less money chasing the same amount of goods, prices will fall. Over the next 5 years this will apply to Housing Benefit and people who pay their own rent.

Graham_Devon

chucky wrote: »

my thoughts exactly but... that's a lot of funds that is going be removed from the rental system. i'm not sure who's going to be impacted more - tenants or landlords.

Personally, the only real impact I can see, going forward, is that the BTL landlord probably isn't going to rush out to invest in another property. Let's face it, there was a system there to be milked. It can still be milked, but it won't bring you the fortunes it once did.

There may be some big stories to be had from the London area, but that's about it. If a landlord really needs to evict a DSS (or whatever it is now) tennant to keep the landlord solvent, theres issues with that overextended landlord. An overextended landlord is less likely to evict in the hope of getting somoene else.

If a family really is going to be evicted, then they become the responsibilty of the state in a way, so that's when I personally think the clause will kick in and that particular family / house will be granted an extension to the limit.

IveSeenTheLight

tincans wrote: »

Whats this, a landlords guide to fantasy economics ?

When there is less money chasing the same amount of goods, prices will fall. Over the next 5 years this will apply to Housing Benefit and people who pay their own rent.

You presume there is no change from how people live.
already there are predicitons and websites set up to deal with the shortage of property and the sharing of property.

michaels

I wonder what the saving would be if the new rules were blanket applied to the existing HB claims - should be easy to calculate and the impact on the market of removing the subsidy fairly easy to predict. A bit like the poverty target there could be some perverse effects where HB claimants make up an appreciable proportion of a local areas renters as it may then move the market equilibrium prices and thus produce second round effects the following year.

silvercar

What will tenants do? If they know they are unlikely to afford their current rent in a years time, surely they keep they eye open for somewhere affordable and decent now.

Exocet

Do some landlords specialise in letting to DHSS? Therefore their income will surely drop. Unless they try to regentrify their properties for those elusive 'professional' renters.

chucknorris

chucky wrote: »

my thoughts exactly but... that's a lot of funds that is going be removed from the rental system. i'm not sure who's going to be impacted more - tenants or landlords.

Oh No! Graham and Chucky agreeing! I have somehow been moved to a parallel universe. I am going to check on savings to make sure I have the same amount here in this other version of our world

Generali

Mass evictions and significantly lower rents too..

tincans wrote: »

Whats this, a landlords guide to fantasy economics ?

When there is less money chasing the same amount of goods, prices will fall. Over the next 5 years this will apply to Housing Benefit and people who pay their own rent.

On average this will push rents down, no doubt. I can see how you'd get rents clustering around cut-off points for housing benefit though. Nice places falling in price so that people can afford the top-up payment, dodgier ones rising in price as there will be more tenants wanting them and none of them paying the rent so not being price sensitive.

The easiest way to cut the housing benefit bill is to scrap the benefit, give people a sum of money and let them get on with it. People are much more price sensitive when spending their own money. For example, when I was in the UK I got taken by a broker to see Leeds United play up in Leeds (long story) and he bought a train ticket for each of 6 of us. They cost £280 each (from memory)! If I was paying there is no way I'd have gone 1st Class for that money. As it was I was happy to accept the 'free' newspaper and pastries.

Thrugelmir

Significantly lower rents, few evictions

Chaos_A.D. wrote: »

seriously how many landlords give a toss about the type of person they rent to ?, I'm pretty certain none do, as long as they pay up and don't wreck the place.

All the landlords I know care immensely. As one bad tenant can cost thousands.

chucknorris

Thrugelmir wrote: »

All the landlords I know care immensely. As one bad tenant can cost thousands.

We go out of our way to get decent tenants, we delibrately market the property a little below the full market rent to widen our choice of tenant to ensure that we get a good tenant