Housing benefit cuts to have no impact on rents.

HAMISH_MCTAVISH

So apparently the cuts in housing benefits will cause a crash in rents.

Or so we've been told on here for quite some time now.

Except of course, it's yet another discredited bear meme.

1.10 [Chartered Institute of Housing] and the [British Property Federation] have collaborated on research to review available data on the LHA to see what if any effect it has on rent inflation. In particular we looked at whether the increase in average rents for LHA claims could be caused by other factors such as changes in the composition of the caseload.

1.11 Caseload composition can cause an uplift in average rent levels if the proportion of claimants shifts from between regions where rents are relatively inexpensive (such as the North and the Midlands) to more expensive areas (London and the rest of Southern England).

1.12 Likewise a shift in the composition of the caseload away from single person households towards a higher proportion of families would also cause some uplift in average rents because larger properties are more expensive.

1.13 A simple comparison of the LHA rates at the start and end dates will show whether rents levels have generally risen or fallen and the size of any caseload effect can be estimated by superimposing the caseload characteristics at the start date onto the LHA levels at the end date.

1.14 We also tested whether there was any evidence for a relationship between the proportions of the market that is let to housing benefit claimants and LHA inflation by applying a standard statistical test.

1.15 We found that between November 2008 and February 2010 the number of areas in in which LHA rates had fallen outnumbered those in which there had been an increase by a ratio of more than 2:1.

1.16 This pattern was repeated in all the regions and if anything was more marked in London and the rest of southern England. This trend was also stronger in the one to three bedroom property sizes that together account for over 85% of all claims.

1.17 The increase in average housing benefit rent levels during this period is entirely due to a shift in the relative distribution of the caseload from the North and the Midlands towards London and Southern England. After adjusting for this „caseload effect‟ average housing benefit rent levels fell by 1% (instead of the reported 3% rise).

1.18 We found no evidence for a relationship between the LHA inflation rates and the proportion of the market that is let to housing benefit tenants.

1.19 Overall it seems that LHA rates do broadly reflect what is happening in the wider (non-housing benefit) market and this should not be surprising because LHA rates are set from data that excludes housing benefit lettings. There is no evidence to support the contention that the LHA is inflationary or produces a feedback loop.

1.20 Our findings call into question the Government‟s strategy that it can use its power as a bulk purchaser to force landlords to reduce their rents. If LHA rates do not contribute towards rent inflation then conversely they cannot be used as a tool to force rents down.

http://www.cih.org/policy/CIHBPF-August2011.pdf

the_flying_pig

Hamish. this. is. an. advocacy. piece. funded. by. these guys I]"...we are one of the main three residential landlord representative organisations in the UK..."[/I.

What else would they say? 'oh please please cut our handouts, please'.

How a person who's forever prattling on about how nothing other than supply and demand can somehow argue that taking out a nine-figure amount of subsidy out won't reduce prices at least a little bit, well,...

1984ReturnsForReal_2

Why are you quoting stuff/information/opinion gathered from periods of time not affected by any cuts?

You are getting desperate mate.

HAMISH_MCTAVISH

the_flying_pig wrote: »

taking out a nine-figure amount of subsidy out won't reduce prices at least a little bit.

We'll see soon enough.:)

geneer

HAMISH_MCTAVISH wrote: »

We'll see soon enough.:)

We will. I predict you will have found other interests once the jury comes in.

Graham_Devon

If cuts have no effect on rents why don't we simply cut them tommorow?

You embarrass yourself with this stuff Hamish.

grizzly1911

I don't know either way and am interested in the debate.

No doubt their are some landlords taking the mick. I also expect there is a heavy regional weighting to the problem. There are no doubt, a relatively small number of, families that make the headlines and politically need to be addressed.

I personally know of a property let under housing benefit where the rate was already dictated by the LA If more had been demanded they would "simply" have rehomed the tenants. The rate paid has been less than the market rate for some 3 years. There is another reason why the landlord hasn't terminated in this instance.

If there is more demand than supply then what happens if landlords simply decide not to renew lettings? What will the LAs do with the people left homeless, that they are obliged to find accommodation for or will funding be found and called something else?