Changes to Housing benefit how much will rents fall?

HAMISH_MCTAVISH

Shakethedisease wrote: »

Hi, that sounds awfully low.. Are you taking into account lha being reduced to 30 per cent of current median levels ?

LHA is not being reduced to 30% of current median levels.

It is being reduced to the 30th percentile from the 50th percentile.

However this could in fact be a very small change, depending on current rental rate distribution within an area.

Earlier in the thread, the average impact on London families in receipt of the benefit was reported to be £20 or so a week.

So in roughly 30% of Londons private rented households, there will be £20 less income per week on average. However, how much of this is taken from landlords pockets, and how much is diverted to rent from other spending, remains to be seen.

Gorgeous_George

RDB wrote: »

The Government now says they will

· reduce all Local Housing Allowance rates so that about 5 in 10 properties for rent in the area should be affordable to people on Housing Benefit rather than every 3 in 10 properties as now.

Is that the right way around? If is going to be 50% of rents being affordable compared to 30% then surely HB needs to rise.

GG

Shakethedisease

It is being reduced to the 30th percentile from the 50th percentile.

Sorry, I do know this but was posting from my phone and was distracted.

However..

Earlier in the thread, the average impact on London families in receipt of the benefit was reported to be £20 or so a week.

So in roughly 30% of Londons private rented households, there will be £20 less income per week on average. However, how much of this is taken from landlords pockets, and how much is diverted to rent from other spending, remains to be seen.

This is grossly underestimated and only true of those on the peripheries of London..

From the links I posted earlier ( I won't replicate again for quickness) on the thread, the problem is going to be a rather bigger one than 'just' finding a spare £20 a month..otherwise Shelter and other leading bodies are making a fuss about nothing ?

The housing charity has analysed the impact of cuts announced in last month’s budget which reduced the rate of Local Housing Allowance to the bottom third (30%) of local rents, and placed a cap on the maximum amount of LHA that claimants can receive.
The results show that London is hit hardest due to a combination of both measures, with a three bedroom family household in Central London seeing a 51 per cent drop in the amount they receive, forcing them to find an extra £360 a week to keep a roof over their head.
Families in the outer areas of London will also be left with a shortfall of between £11.50 and £23.02 a week. For those on the minimum wage of £218 a week this is a significant portion of their income.

The cap, which limits LHA payments to between £280 and £400 a week depending on house size from April 2011, is lower than current local housing allowance rates for homes of two or more bedrooms in Camden, the City of London, Hackney, Hammersmith & Fulham, Westminster, Kensington and Chelsea, and Tower Hamlets. Large families will be hardest hit with five-bedroom homes unaffordable everywhere in the capital apart from one area within Waltham Forest.
Meanwhile Valuation Office Agency figures show tenants in parts of central London would lose an average of £200 a week in benefit on a four bedroom home, while those in Ashford, Kent, would lose £4.37 a week on the same size of property.

The BPF estimates that the government’s suggested budget reductions could force up to 800,000 claimants of local housing allowances to leave London and other cities where jobs are more available, to find shelter.
The trade body believes there are over 400,000 new claimants that will be hit by the changes, and that a further 400,000 people already in work and claiming the benefit may be priced out of their homes.

I could keep quoting on and on, but will leave it there. But I think the problem is a little more than £20 a week for some, and even that is quite a hit for someone to take on minimum wage.

And sorry but imho I think that ..

Claims have risen in the recession to the point where 42 per cent of homes in Hackney and 38 per cent in Tower Hamlets are reliant on the weekly payment. In Greater London as a whole, a quarter of households rely on the benefit to meet their rent.

..IS a significant number based on the above articles and figures presented, especially by Shelter.

HAMISH_MCTAVISH

Shakethedisease wrote: »

This is grossly underestimated and only true of those on the peripheries of London...

It's an average. Averages do of course mask far bigger changes for some.

But the fact remains that on average, the difference is around £20 a week and on average, around 30% of privately rented households in London receive benefits.

Obviously, some (expensive) areas will be hit very hard and see rents fall, other (cheaper) areas will be overwhelmed by people looking to move there and see rents rise.

Most will be somewhere between those two extremes.

chucky

Shakethedisease wrote: »

A lot of very scared and very unprepared people out there if what I've read online ( not just here ) is anything to go by. And not much they can do about it either.. Repossessions will rise also do you think ?

you're the guy that was trying to convince everyone that 90% of London property was going to be affected by the HB cuts.

you're even trying to convince people some nonsense about the 30th percentile

you now claim repossessions will rise. you obviously live in a fantasy world. good luck with peter pan and tinkerbell...

1984ReturnsForReal_2

HAMISH_MCTAVISH wrote: »

the difference is around £20 a week and on average

For £100k mortgage its more like £50 per week

HAMISH_MCTAVISH

1984ReturnsForReal wrote: »

For £100k mortgage its more like £50 per week

That has to be the wierdest comment on changes to the way the allowable rent is calculated for housing benefits I've ever seen.

Care to explain?

Shakethedisease

chucky wrote: »

you're the guy that was trying to convince everyone that 90% of London property was going to be affected by the HB cuts.

you're even trying to convince people some nonsense about the 30th percentile

you now claim repossessions will rise. you obviously live in a fantasy world. good luck with peter pan and tinkerbell...

Oh mabye you should just read luv instead of mouthing off.

I posted a LINK (one among many ) with 90% of respondents (landlords who accept benefits claimants) saying they would be affected by the biggest lettings agency in the UK. 90 % of all respondents from London said they would be affected.

Changes to Local Housing Allowance (LHA) could leave a third of claimant tenants in the private rental sector unable to pay their rent in full...
According to a survey by Upad.co.uk, 39% of private landlords questioned said their businesses would be impacted by the restrictions.
On a regional basis, 90% of respondents letting in London and the South East said they would be affected; a third of landlords in the Midlands and North West and a quarter of Scottish landlords.

I made a mistake regarding Camden figs later on which I read back and thanked the person who pointed it out.

You're even trying to convince people some nonsense about the 30th percentile

What nonsense ? Are you deranged or on something that makes you feel wildly hopeful about the fact that LHA rates UK wide are going down from the 50th percentile to the 30th percentile is going to have no effect at all ? For anyone ?

you now claim repossessions will rise. you obviously live in a fantasy world. good luck with peter pan and tinkerbell...

People getting SMI support cut from 6% to 3% interest with not a lot of warning ( letters going out now ) and many wondering !!!!!! they're going to do about the shortfall ?

The scheme has kept "the rising tide of repossessions" under control but may not continue to do so under plans to pay it at the same rate as the Bank of England monthly rate, Shelter chief executive Campbell Robb said.
"Most people on SMI are on higher than average interest rates, so there is a real danger it will no longer help the people who need it most and could trigger a surge in repossessions," Mr Robb continued.

http://www.guardian.co.uk/money/2010/sep/05/disabled-homeowners-repossession-mortgage

http://www.telegraph.co.uk/finance/personalfinance/7940720/Repossession-threat-as-Government-reduces-home-owner-support.html

http://www.bbc.co.uk/news/business-10950327

http://uk.finance.yahoo.com/news/repossession-threat-as-government-reduces-home-owner-support-tele-63755951fb93.html?x=0

http://www.independent.co.uk/money/mortgages/repossessions-likely-to-rise-as-options-run-out-for-struggling-homeowners-2034686.html

The above from Shelter, and many others, Google for any more info you might require, or else simply read a bit more widely on these forums.. I can't be bothered informing someone who obviously only reads and takes in what they want to hear.

See you in Neverland mate, you definately belong with me there if you think I'm a fantasist after reading those links.

Oh and btw, the 'guy' is a she..for future reference.

chucky

Shakethedisease wrote: »

I made a mistake

you certainly do make a lot of mistakes...

you claimed that 90% of rental properties will be affected the Housing Benefit changes... Shakethedisease was wrong...

your claims about the 30% and 50% percentile... Shakethedisease was wrong...

the Camden figures... Shakethedisease was wrong...

you keep all your up fantasy stuff sweet cheeks at least you're consistent in being very, very wrong each and every time

chewmylegoff

Shakethedisease wrote: »

Hi, that sounds awfully low.. Are you taking into account lha being reduced to 30 per cent of current median levels ? Only 2.8 per cent of private tenants being affected across the whole of London by this change seems very unlikey ... Unless I've missed somerthing else. But are your figures focusing purely on tne £400 a week cap and not also rents being reduced to the 30 th percentile locally too. ?

it's not some figures that i have produced, it's a paper produced by something called "london councils" the purpose of it is to point out how nasty the caps will be and why they shouldn't be introduced, so i doubt the numbers are on the low side. however, it is obviously designed to only address the initial cap, so it doesn't take into account this 30th percentile (different to 30% of median) stuff.