Changes to Housing benefit how much will rents fall?

ukcarper

Silverbull wrote: »

Depends how many kids.

True it will be interesting to see what does happen I don’t think it will be very pretty. I can’t see people moving out initially and as LHA is paid to tenant a lot will probably just not pay the full rent.

Silverbull

silvercar wrote: »

History repeating itself. There are many areas that have been gentrified that started off as housing for the poor. Hampstead Garden Suburb in North London is one. It was built to provide homes to people who couldn't afford to live in central London. Now a 3 bed semi will cost £1m and they employ private security firms to keep the oiks out of the area.

At the moment in Hampstead Garden suburb a low erning household (single mum for example) with 1 child can get £340 wk to pay rent and all the council tax paid. Then £100+ child tax credit and £100+ income support or whatever. Plus child benefit and all the other top ups.

After the £500wk cap they would have just over £100wk to buy nappies baby stuff etc. Not to mention food clothes gas electric water.

If you have a few more kids there is no way you can still afford to live there.

ukcarper

carolt wrote: »

Really? 44K per annum = £2,689.20 per month after tax. Are you seriously suggesting a family could afford to spend c 50% of that, or £1300 a month (which = £300/week) on rent long term???!

All normal calculations suggest spending more than 30% of your monthly take-home pay on rent/mortgage is too much.

And that's calculated from your nominal 44K figure, not what these people get - they'd be spending c £1445 out of their £2166 a month on rent/council tax - a rate of 67% - surely you're not being serious???! :eek:

Someone earning £25k takes home about £1.600 per month if they pay just £100 a week rent they are left with £1170, I would suggest a lot of people are doing just that.

carolt

Not many familes in London get by on 25K, or have rents of £100/week (unless they're lucky enough to be living in council accomodation). In fact you just suggested they could happily afford £300 a week - you now appear to be agreeing with me that they can't.

Your calculations for rent of £100/week might work fine elsewhere in the country, where you can get a nice gaff for that - but surely what has been stressed over and over in this thread is that that doesn't apply in London and surroundings.

£100/week would be lucky to get you a bedsit in London, certainly not a family home.

I don't disagre that single people in London/S East will be just fine on their £500/week package, and not need to move at all - but basically all families will.

Which will mean lots of empty rental accomodation in London - and huge fall in demand = lower prices.

olly300

Silverbull wrote: »

I`m talking about a £250 a week property after the falls. Who knows how much the inflated rent is at the moment.

Do you know how expensive London rents are?

Workers, who pay all their rent, and students studying in London pay the same rents as most of these claimants.

One of my ex-landlords when he did allow housing benefit tenants to move into his properties actually charged them less because benefits actually charged them less then what he could rent a property out for. The reason he charged them less is because they stayed their longer.

I also know of properties which are company rentals and these rents were inflated as they were aimed at a different market. Unless these benefit claimants are living in those houses then their rent isn't inflated.

Silverbull wrote: »

But for the big families (few kids) that we are talking about they are getting several hundred or even thousands of pounds a week just for rent at the moment. These would be band B or even A.

Council tax is done on the value of the property in 1991 not on the size of the property.

That means it's possible for a terrace house in London to be in Band D there as in Manchester it would be in Band A.

Silverbull wrote: »

Rents can fall when supply is greater than demand but council tax only ever goes up.

True.

carolt

olly300 wrote: »

Do you know how expensive London rents are?

Workers, who pay all their rent, and students studying in London pay the same rents as most of these claimants.

One of my ex-landlords when he did allow housing benefit tenants to move into his properties actually charged them less because benefits actually charged them less then what he could rent a property out for. The reason he charged them less is because they stayed their longer.

I also know of properties which are company rentals and these rents were inflated as they were aimed at a different market. Unless these benefit claimants are living in those houses then their rent isn't inflated.

That's simply not true - we've had examples on this very forum recently where the claimant in receipt of LHA was charged way over the going rent - including 1 landlord who said she'd had a letter saying her the amount of LHA in her area would be dropping by 22% - she wasn't too bothered, because she admitted that she was currently able to get far more than the previous rent through LHA. And far more than she had been expecting.

There have been many similar stories - I remember another one recently where one house was being rented out via LHA at double what it had previously fetched on the open market.

The fact is few workers can afford these rents.

ukcarper

carolt wrote: »

Not many familes in London get by on 25K, or have rents of £100/week (unless they're lucky enough to be living in council accomodation). In fact you just suggested they could happily afford £300 a week - you now appear to be agreeing with me that they can't.

Your calculations for rent of £100/week might work fine elsewhere in the country, where you can get a nice gaff for that - but surely what has been stressed over and over in this thread is that that doesn't apply in London and surroundings.

£100/week would be lucky to get you a bedsit in London, certainly not a family home.

I don't disagre that single people in London/S East will be just fine on their £500/week package, and not need to move at all - but basically all families will.

Which will mean lots of empty rental accomodation in London - and huge fall in demand = lower prices.

As usual you’ve completely missed the point you said you could not afford £300 a week rent on £44k. Lots of people live on £25k and pay rent, I picked £100 per week but as you say they probably have to pay more than that leaving them less to live on..

Whether they live in London is irrelevant.

Silverbull

carolt wrote: »

Not many familes in London get by on 25K, or have rents of £100/week (unless they're lucky enough to be living in council accomodation). In fact you just suggested they could happily afford £300 a week - you now appear to be agreeing with me that they can't.

Your calculations for rent of £100/week might work fine elsewhere in the country, where you can get a nice gaff for that - but surely what has been stressed over and over in this thread is that that doesn't apply in London and surroundings.

£100/week would be lucky to get you a bedsit in London, certainly not a family home.

I don't disagre that single people in London/S East will be just fine on their £500/week package, and not need to move at all - but basically all families will.

Which will mean lots of empty rental accomodation in London - and huge fall in demand = lower prices.

Very well put.

I still say it will be a mixture of larger families having to move away and rents falling.

ukcarper

As pinkteapot asked on the other thread.

“Anyone actually know what percentage of London's 7.5m odd people are actually living purely on benefits? And how many of those will be affected by the cap on total benefits claimed

As what percentage of tenants are on full LHA has a big bearing on what will happen.

chewmylegoff

ukcarper wrote: »

You are probably right but I can’t see the government chucking them out and putting low paid workers in their price, good idea that it might be.

my point was that there's plenty of cheap, unskilled and currently unemployed labour sitting around in council houses who won't be affected by the LHA cap, so the idea that the city will suddenly grind to a halt if some people refuse to commute into inner london to do minimum wage work doesn't really wash with me. there are tons of students in london who will do minimum wage work in inner london as well, albeit only on a part time basis.