Changes to Housing benefit how much will rents fall?

ILW

brit1234 wrote: »

£3k-£4k on commuting costs, easy.

Its not as if rail fares go up over inflation every year is it.

Its well known that housing benefits have been paying better rents than normal tenant in much of the country. Hence all the landlord blogs and forums recommending them like Ajay Ahuja. It will have a massive effect especially when you combine the public sector cuts on top.

In most areas lower priced accomdation can be found by just moving a couple of miles. eg NE London to East London or SW London to SE London.
And if the claimant is non working there are no commuting costs.

RDB

Its not just a case of either everyone moves out of central London areas or rents are lowered a lot.

It will almost certainly be a bit of both.

HAMISH_MCTAVISH

Strings wrote: »

Without any figures you cant really speculate what will happen can you?

Figures.....

Detailed tables from the Department for Work and Pensions now show about 159,370 tenants in London will lose an average of £22 a week, while eight out of 10 will lose more than £10 a week.

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.

Graham_Devon

HAMISH_MCTAVISH wrote: »

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 think I already covered this above

The inflation is a new one though. Rent payments falling won't effect the rent one can charge. Cus it's small numbers like.

But, the good news is, these small numbers WILL have enough of an impact to reduce inflation.

Just not enough of an impact to reduce rents, oh, no no no. Categorically, landlords will not lose a penny, no matter what you throw at them. Infact, they will benefit now, through interest rates.

Good stuff.

Meanwhile, in the real world...

System

So much confusion in one post.

HAMISH_MCTAVISH

Joeskeppi wrote: »

So much confusion in one post.

Remarkable, isn't it?

Graham, I suggest you research "primary need" and "discretionary spending"....

When you can figure out the difference, let me know which one is more likely to be cut.;)

And therefore which is more likely to take the hit. Landlords or purveyors of cheap chinese tat.

System

The way I looked at those posts:

22pw off the average rent, I would guess that's between 5 and 10 percent depending on area, possibly a bit more in the bronx, I would classify that as

certainly not going to cause a big crash in rents or house prices

However, an extra £88+ a month on expenses DOES reduce discretionary spend significantly.

See, I thought about it, rather than going out of my way to look like an utter dipstick.

silvercar

Calculations I've seen suggest that the max LHA payments, in areas outside the cap, will drop by 8-10%. ie the difference between the 50% and the 30% level is about 8-10% of the current LHA.

In areas where there are few claiming LHA, the rent levels won't be effected. In areas where there are a lot of private rentals claiming LHA there could be a drop in average rates, but it is unlikely to be more than 5% and it will be skewed ie the cheaper properties will drop but the more expensive ones are unaffected. It could well be that the costs and hassle of moving together with the unwillingness of private landlords to take LHA tenants force LHA tenants to fund the excess themselves rather than move.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Remarkable, isn't it?

Graham, I suggest you research "primary need" and "discretionary spending"....

When you can figure out the difference, let me know which one is more likely to be cut.;)

And therefore which is more likely to take the hit. Landlords or purveyors of cheap chinese tat.

I suggest you step back into the real world if you think people on benefits can suddenly just cut £88 worth of expenditure out of their monthly outgoings, and hand it over to their landlord instead.

But who really cares right? As long as the landlord doesn't lose a penny, it's all good. Child benefit should sort it out, the landlords can have that to cover the £22 a week. No one suffers and the landlord actually prospers now that people are so poor they can't buy anything and inflation reduces. Low interest rates, woohoo!

Generali

HAMISH_MCTAVISH wrote: »

Remarkable, isn't it?

Graham, I suggest you research "primary need" and "discretionary spending"....

When you can figure out the difference, let me know which one is more likely to be cut.;)

And therefore which is more likely to take the hit. Landlords or purveyors of cheap chinese tat.

Joeskeppi wrote: »

The way I looked at those posts:

22pw off the average rent, I would guess that's between 5 and 10 percent depending on area, possibly a bit more in the bronx, I would classify that as


However, an extra £88+ a month on expenses DOES reduce discretionary spend significantly.

See, I thought about it, rather than going out of my way to look like an utter dipstick.

Economic theory is pretty clear about what happens when you reduce a subsidy like housing benefit, that is that both parties take the hit. Perhaps of £22, the landlord will get £12 less in income and the tenant pay an extra tenner. Perhaps it'll be the other way round.