Debate House Prices
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Impact of Housing Benefit Cuts
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Another impact of the changes.Shared accommodation
Pressure will be felt most keenly amongst landlords and tenants in the shared accommodation sector – the mainstay of the market for rented accommodation. Until the new rules were implemented, single people under the age of 25 were entitled to the shared accommodation rate for LHA benefit but single people between the ages of 25 and 34 were able to claim for a one-bedroom self-contained flat. Under the new rules all single claimants under the age of 35 will only be entitled to the shared accommodation rate.
This is likely to result in a rise in demand for properties designated as houses in multiple occupation (HMOs). These are almost exclusively owned by larger professional landlords. But as the British Property Federation points out, ‘Article 4 directions prohibiting the construction of HMOs are ‘popping up left, right and centre'.
According to the BPF, planned changes to the Shared Accommodation Rate could see an estimated 88,000 of 25-to-34-year-olds dropped from a higher benefit rate designed to cover the cost of a one bedroom flat, to a rate that will only cover shared accommodation.
http://www.citywire.co.uk/money/local-authorities-make-life-difficult-for-landlords/a489552?ref=citywire-money-latest-news-list0 -
The housing benefit cuts do not really show up yet, because they postponed them unless people move.
So when people in London come to move for whatever reason they will get a shock that they will get less money than they did before they moved. This will have a knock on effect of lowering average rents.
In North London for instance it used to be about 340 per week for a 2 bed place now 290, and just a bit further North than that it used to be 230 now down to 220. Doesnt sound like much but these cuts will continue.
Also they have just postponed forcing the cuts on everyone who gets help with the rent, but when they do have to force it because they just can not keep paying out so much in housing benefit, then you will see average rents crash.0
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