Changes to Housing benefit how much will rents fall?

Graham_Devon

IveSeenTheLight wrote: »

But surely so would demand..........

Why would demand surge?

IveSeenTheLight

Graham_Devon wrote: »

Why would demand surge?

Because if there were 8,500 new rentals come on to the market as a restult of tenants leaving previous rented properties, then presumably they would be looking for rental properties thus increasing the demand.

Unless they are all going to live with mum and dad, friends, lala land

Graham_Devon wrote: »

Well if you assume that 50% of landlords chuck their tennants out. This would, I assume, happen over a 6 month time frame.

You'd have some boroughs with 8 and a half thousand new rentals coming on to the rental market over those 6 months.

That's where I can see the falls in rental prices coming in. IF landlords kick tennants out instead of taking lower payments, supply will surge.

chucky

carolt wrote: »

Oh come on, just walk around some areas of London and compare local rents to the people you see walking around you - there are so many areas where it is clear the average local esp recent arrival (ie not pensioners who may have bought years ago when it was cheap) could not possibly afford to pay local rents if they had to pay them fully themselves.

It's blatantly clear that local rents have been supported at unrealistic levels in recent years. Only someone who walks around London with their eyes shut could think otherwise.

or people on this very forum :eek:

chucky

IveSeenTheLight wrote: »

Because if there were 8,500 new rentals come on to the market as a restult of tenants leaving previous rented properties, then presumably they would be looking for rental properties thus increasing the demand.

Unless they are all going to live with mum and dad, friends, lala land

it's pretty obvious but unfortunately not in the mind of some on here...

not only do they think that rents will collapse but they think that people are going to live in tents when they move out of the property they were renting previously...

only in lala MSE land these things can be believed

Graham_Devon

IveSeenTheLight wrote: »

Because if there were 8,500 new rentals come on to the market as a restult of tenants leaving previous rented properties, then presumably they would be looking for rental properties thus increasing the demand.

Unless they are all going to live with mum and dad, friends, lala land

Bit of an oxymoron isn't it?

The reason for eviction in this case would be because landlords would not be willing to accept the payments the LHA can make on behalf of these (now evicted) tennants.

So how would these ex tennants, create demand, if they have been evicted because they can not afford the rent the landlords are asking for?

They may create demand elsewhere, but they wouldn't create demand where the surge of supply is, which I believe is what you were getting at, unless I'm mistaken, as I'm sure you would have said "but they would create demand elsewhere"....but we are still left with a surge of supply in London...so don't get the point?

On a personal level, I doubt they will be evicted, and I believe landlords will take the hit, just like Sue, as they know they will not achieve the desired rent from the private renter.

silvercar

On a personal level, I doubt they will be evicted, and I believe landlords will take the hit, just like Sue, as they know they will not achieve the desired rent from the private renter.

There will be some tenants who will top up the rent themselves. Honest folk who know they have signed an AST committing to pay £X per month and not wanting to get CCJs or risk eviction.

There will be those who are now looking to move, to get the best cheaper property to be able to afford their rent.

I also think there will be some benefit-thrivers who will do some cash in hand work to earn some money to pay the top-up.

Lets face it, tenants have had notice that their LHA is reducing, they should be planning their next step.

Graham_Devon

silvercar wrote: »

There will be some tenants who will top up the rent themselves. Honest folk who know they have signed an AST committing to pay £X per month and not wanting to get CCJs or risk eviction.

Oh come on. I don't mean to be rude but a bit of reality please! These people are on Housing Benefit for a reason. Topping up payments will require in a lot of cases a few hundred quid a month. If they could simply afford to top up payments, they probably wouldn't be receiving housing benefit in the first place! Even an extra £100 a month would probably not be do-able.

There will be those who are now looking to move, to get the best cheaper property to be able to afford their rent.

Probably. But talking to the people who actually work in this area, I would assume these people make up the very minority.

I also think there will be some benefit-thrivers who will do some cash in hand work to earn some money to pay the top-up.

I doubt it. If this is their mindset, they are more likely to say to the LHA "I'm your problem, house me".

Lets face it, tenants have had notice that their LHA is reducing, they should be planning their next step.

As have landlords, who have little choice. Were back to chuck out tennants and receive less in rent and face a void period....or keep tennants and receive less in rent.

As I say, I believe most will do what Sue stated.

74tnemele

IveSeenTheLight wrote: »

Because if there were 8,500 new rentals come on to the market as a restult of tenants leaving previous rented properties, then presumably they would be looking for rental properties thus increasing the demand.

Unless they are all going to live with mum and dad, friends, lala land

As we have said before they will have to move away from the S,E.

Places like Wales and Scotland or countryside in N,England.

These families getting up to 4.5grand a week will now have to move to an area where they can find a house for under 400 week. It wont be anywhere near London.

ILW

So all in all it seems to be a pretty good policy.

the_flying_pig

HAMISH_MCTAVISH wrote: »

Figures.....



The average will be £22 a week in London.

Presumably far less in other areas of the country.

It's certainly not going to cause a big crash in rents or house prices, but it will reduce discretionary spending and impact the wider economy. The positive side is that a million or two people spending less will reduce inflationary pressures, and keep rates lower for longer.

I don't mean to be rude Hamish but what level were you educated to [and how well did you do at this level?]?

There's a horrible fogginess about your posts and you have this ghastly way of using convoluted chains of reasoning that are missing lots of links.

Anyway, back to H's old favourite supply and demand - less government money being pumped into rents means less demand means lower prices. I couldn't tell you whether that's half a percent or twenty percent [I hope it's the latter, obviously]. The cap is clearly small fry other than for big, reasonably upmarket, London family homes, but looking beyond that this business about changing from average [or median or whatever it is] rents to below average [or whatever] sounds like a reasonably big deal to me. I would guess [assuming a normal-ish distribution] that the budget available to HB tenants might fall by maybe 5-10% or something as a result so, given that private demand wouldn't be impacted i might imagine that the final impact on price might be perhaps half of that or something of that order.