Changes to Housing benefit how much will rents fall?

IveSeenTheLight

neverdespairgirl wrote: »

Where are all these prospective tenants living now?

The rental market is a continually moving and flexible market.
New tenants come in to the system and others leave.
Some move throughout the UK for work.
Some want to move out from the parents.

There are plenty of answers to where tenants come from.

Shakethedisease

I've rented out a couple of properties for a number of years now, always to private renters, never those receiving benefits.
Why would I need to reduce my rent?

You won't. You're not affected if that's the way you run your business model. However, there are many that 'specalise' in renting out to lha tenants. They WILL be affected.

And they'll drag you down with them..

As LHA rates go down, so will the 'average' rental in a particular area as per rightmove stats etc. These listings make no difference to 'whom' the landlord is prepared to rent out to when searching ( until you read the details at the very bottom ) by price.

For example if there are 3 properties in your street up for eg £700 a month, ( dhss accepted ) and yours is still up for £1000 ( no dhss).. do you really think you'll be the first one ANYONE will call ??? Nah, you'll be the very last one on the list of 'possibles' for everyone. Lha or not.

You're making the mistake of thinking that because you don't do benefits, that your potential tenants.. won't consider a property where a landlord has stated 'dhss considered'. A mistake imho.

Even those that don't get benefits will still look for the cheapest deal in their preferred area. And they won't give a monkeys whether you take lha or not, only what they can get for the price. And if rents are going down all around you because those around you are having to accept less to make their business model work.. then you will take a hit one way or another as things ripple out. You simply won't be competitive any more..

Market forces in'it. Everyone wants the cheapest deal, not just those on LHA forced to find it.

In short, if I was looking for a rental just now ( and I don't get any benefits), I'd look for the cheapest and best I could find. I don't care that the landlord 'may consider dhss'.. If it was an area and a property that was good for me I'd go for that... and not yours...because yours is on at £ xxx amount more expensive and I don't give a stuff that you say 'sorry no dhss' on the listing. I reckon most folks would tbh.

But they are protected if they have children, aren't they? Young families won't ever be left homeless.....

I guess that depends if you consider temporary accomodation, b+b's and such as suitable for primary school children or not ?

http://scotland.shelter.org.uk/media/press_releases/press_release_folder/2010/equivalent_of_three_primary_school_classes_every_day_made_homeless

Every day last year, 60 children – the equivalent of three primary school classes – were made homeless [1], whilst Scottish Ministers delayed important guidance to councils and other agencies that would ensure children's needs are prioritised....

..He added: 'For the 22,000 children in homeless families, we must ensure child homelessness becomes a relic of the past not a pitiful blight on a 21st century Scotland.'.

And that's just Scotland.

But yes, it depends what you mean regarding 'protected' ?

IveSeenTheLight

Shakethedisease wrote: »

You're making the mistake of thinking that because you don't do benefits, that your potential tenants.. won't consider a property where a landlord has stated 'dhss considered'. A mistake imho.

Even those that don't get benefits will still look for the cheapest deal in their preferred area. And they won't give a monkeys whether you take lha or not, only what they can get for the price. And if rents are going down all around you because those around you are having to accept less to make their business model work.. then you will take a hit one way or another as things ripple out. You simply won't be competitive any more..

Market forces in'it. Everyone wants the cheapest deal, not just those on LHA forced to find it.

Something that you may have overlooked is the availability of rental property.
You've made a number of statements in your post that everyone is looking for the cheaper property, but if there is a limit in supply.......

This has been discussed many times before and the upshot it seems is that those who are on benefits and rent will likely have to move to an area where there are cheaper rents. Less desireable places.

If you wish to live there, go ahead and save yourself some money.
Most other renters will be looking for a compromise on their quality and affordability.

IveSeenTheLight

Shakethedisease wrote: »

You won't. You're not affected if that's the way you run your business model. However, there are many that 'specalise' in renting out to lha tenants. They WILL be affected.

And they'll drag you down with them..

As LHA rates go down, so will the 'average' rental in a particular area as per rightmove stats etc. These listings make no difference to 'whom' the landlord is prepared to rent out to when searching ( until you read the details at the very bottom ) by price.

For example if there are 3 properties in your street up for eg £700 a month, ( dhss accepted ) and yours is still up for £1000 ( no dhss).. do you really think you'll be the first one ANYONE will call ??? Nah, you'll be the very last one on the list of 'possibles' for everyone. Lha or not.

You may find this interesting reading.

http://www.parliament.uk/briefingpapers/commons/lib/research/briefings/snsp-05638.pdf

From page 5, there are only 14,030 recipients of HB who exceed the new criteria.
As discussed earlier, there are 8.3million rented properties, of which 3.8 million are private and 4.5 million are social rented.

Do you really think that 14,030 (or 1.7%) out of 8.3 million will make that much of a difference?

Shakethedisease

Government figures are all fine and well, ( *spin*).. however, you might be better reading what the biggest lettings angency in the Uk had to say a few days back...

A survey suggests a third of social tenants could be made homeless and 90% of landlords in London and the South East will be affected by the upcoming changes in housing benefit legislation.

The Chancellor announced plans in June to cap the level of Local Housing Allowance (LHA) payable to between £250 per week for a one-bedroom property and to £400 per week for a four-bedroom property.

Upad.co.uk, the UK's largest online lettings agent, said just under 40% of survey respondents say their rental payments will be affected with the vast majority or 90% of those letting in London and the South East affected by the change. A third of landlords in the Midlands and North West, as well as a quarter of those in Scotland also say they will be hit.
Half the landlords whose tenants pay more than the government cap said that they would ask their DSS tenants to leave and let the property within the private sector.
Another 34% said that they expected their tenants to replace lost housing benefit from other sources of income and only 12% intend to lower their rents to the new LHA levels.

http://www.yourmortgage.co.uk/news/3626984


90% affected in London. Of that 34% that 'expect' their tenants to make up the the lost housing benefit ( good luck with that, they're already on benefits because they can't afford the rent ).. and most that would ask their current dss tenants to leave. That means there will be an awful lot of landlords issuing section 21's.. and hoping to get new tenants from those aren't in receipt of benefits.

Supply and demand alright. And it'll be landlords competing for 'prime tenants'. And I'm not sure where the rest of the tenants are going.. don't think the government does either tbh ( but that's another thread).

But don't kid yourself that 'things will just stay the same' for everyone. Because the whole 'supply and demand' thing is about to be shaken up like a big snow-globe. It may not be your particular properties 'in demand' any more, just the kind of tenant you, and every other landlord out there, wants... and that means competition.

IveSeenTheLight

Shakethedisease wrote: »

Government figures are all fine and well, ( *spin*)..

Ah I see where your coming from.
Time for me to bow out from this conversation.

Incidently the link I provided also said that London and the South East would be most affected
http://www.parliament.uk/briefingpap...snsp-05638.pdf

The introduction of national caps on the rates of LHA payable within BRMAs will impact most on claimants living in certain parts of London. The VOA tables referred to above, and reproduced at Appendix A, indicate that at June 2010 LHA rates based on the 30th percentile of local market rents there would be no one bedroom properties or larger that a claimant would be able to rent (without experiencing a benefit shortfall) in central London. In inner
north London there would be no three bedroom or larger properties, and in inner west and south west London no four bedroom or larger properties.

Steve Webb: [FONT=Arial,Arial][FONT=Arial,Arial]At March 2010, for housing benefit claims in England assessed under the local housing allowance arrangements, our records show there were: [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]3,340 recipients with a one-bedroom entitlement receiving over £250 per week; [/FONT][/FONT]
[FONT=Arial,Arial][FONT=Arial,Arial]6,970 recipients with a two-bedroom entitlement receiving over £290 per week; 2,710 recipients with a three-bedroom entitlement receiving over £340 per week; and 1,010 recipients with a four-bedroom entitlement receiving over £400 per week
[/FONT][/FONT]

RDB

Shakethedisease wrote: »

Government figures are all fine and well, ( *spin*).. however, you might be better reading what the biggest lettings angency in the Uk had to say a few days back...



http://www.yourmortgage.co.uk/news/3626984

90% affected in London according to the uk's biggest lettings agency.

Of that, 34% that 'expect' their tenants to make up the the lost housing benefit ( good luck with that, they're already on benefits because they can't afford the rent ).. and most that would ask their current dss tenants to leave. That means there will be an awful lot of landlords issuing section 21's.. and hoping to get new tenants from those aren't in receipt of benefits.

Supply and demand alright. And it'll be landlords competing for 'prime tenants'. And I'm not sure where the rest of the tenants are going.. don't think the government does either tbh ( but that's another thread).

But don't kid yourself that 'things will just stay the same' for everyone. Because the whole 'supply and demand' thing is about to be shaken up like a big snow-globe. It may not be your particular properties 'in demand' any more, just the kind of tenant you, and every other landlord out there, wants... and that means competition.

Very good post.

You are spot on, those land lords that say "Ok your housing benefit has been reduced you have to find that extra money yourself or get out", they will find 100% of their good reliable tenants will move out. Yes they may move to smaller place a little way away in not such a nice area.

Then they will be one of many increasing empty over priced homes advertised desperately looking for tenants.

After a few months they will have to lower the rent and take a risk on new tenants.

They will wish they kept the old ones who they knew were reliable.


The smart LLs will lower their rents every year as housing allowance is reduced every year from now on.

BTL is dead, with rents and house prices falling for years to come and mortgage interest payments going up one way or another even if base rates do stay low a little longer.

IveSeenTheLight

RDB wrote: »

Very good post.

You are spot on, those land lords that say "Ok your housing benefit has been reduced you have to find that extra money yourself or get out", they will find 100% of their good reliable tenants will move out. Yes they may move to smaller place a little way away in not such a nice area.

Then they will be one of many increasing empty over priced homes advertised desperately looking for tenants.

After a few months they will have to lower the rent and take a risk on new tenants.

They will wish they kept the old ones who they knew were reliable.


The smart LLs will lower their rents every year as housing allowance is reduced every year from now on.

BTL is dead, with rents and house prices falling for years to come and mortgage interest payments going up one way or another even if base rates do stay low a little longer.

I mentioned this a few posts ago

You may find this interesting reading.

http://www.parliament.uk/briefingpap...snsp-05638.pdf

From page 5, there are only 14,030 recipients of HB who exceed the new criteria.
As discussed earlier, there are 8.3million rented properties, of which 3.8 million are private and 4.5 million are social rented.

Do you really think that 14,030 (or 1.7%) out of 8.3 million will make that much of a difference?

RDB

IveSeenTheLight wrote: »

I mentioned this a few posts ago

We have already established that some say hardly any will be affected by the changes and some agree that 90% affected in London according to the uk's biggest lettings agency.

Depends whos figures you go by.

Im sure the government will say not many will be affected just like the were saying 'green shoots' a year ago. Funny they are not saying this anymore!

sjaypink

treliac wrote: »

But they are protected if they have children, aren't they? Young families won't ever be left homeless.....

No, Judge might look slightly more kindly, but theres nothing to stop eviction

Only thing is if is there are kids (or other reasons that the tenant is considered vulnerable) then when they are evicted they are usually able to get help with emergency housing and/or re-housing