arrears have increased by 340% following the housing benefit cuts

Graham_Devon

N1AK wrote: »

That really is crazy isn't it? We tend to think of a roof over our heads as a basic necessity (which I agree it is) yet millions need government help to get one. We as a society seem to be in denial about how big a problem we are facing

This lack of forward thinking is what I just don't get.

For every increase in house prices, there is a corresponding increase in the amount of people who will need to take up housing benefits.

For every increase in house prices, rental prices will increase, leading to an increase in the amount paid to claimants.

So basically we have an increasing cost each year per claimant and an increase in claimants.

For example, the average weekly benefit in 2008 was £76 per week. It is now £89 per week. So much for "cuts". As rents increase, so do the housing benefit costs.

There is no let up in the pace of increases, infact, the Guardian report that the increase since 2011 was the fastest increase since records began.

In 2010, the housing benefit bill was £16.6bn. Today, just 3 years later, it's £22bn.

That equates to just over a third of the total tax take per year from income tax. Going forward, it's estimated that the housing benefit bill will be £30bn by 2018, though looking at the increase in the last 3 years, we could reach that by 2016.

A further £420m per year was being spent on SMI payments (paying the interest on a private mortgage) for 170,000 households. This was in 2011.

N1AK

grizzly1911 wrote: »

I agree with your post but surely the problem with the last point is that some non/low skilled work will always need to be done in the UK. We can't export all these jobs, they need a physical presence here.

As more peeps only do the high skill/value work they often create more of a need for low skill assistance to mop up the stuff they don't want to do, can't do, haven't the time to do.

I don't accept the premise that a high wage worker requires considerable low skill assistance. A farmer used to have dozens if not hundreds of farm hands, often they won't need any now. How many secretaries does a Lawyer really need? A typical office used to have a typing pool but chances are that even executives write the majority of their own correspondence these days.

Yes there are many service jobs that are comparatively low paid and they won't all vanish overnight. I don't think anyone is suggesting that we try and get 100% of the workforce into graduate level or higher employment.

A large part of my job is implementing business systems; many result in decreased workload and that can mean redundancies or decreases in head count by churn. It isn't the skilled workers jobs that are being automated it is the guy who spends 38 hours a week doing, reasonably complex, data entry for £18k.

grizzly1911

N1AK wrote: »

I don't accept the premise that a high wage worker requires considerable low skill assistance. A farmer used to have dozens if not hundreds of farm hands, often they won't need any now. How many secretaries does a Lawyer really need? A typical office used to have a typing pool but chances are that even executives write the majority of their own correspondence these days.

Yes there are many service jobs that are comparatively low paid and they won't all vanish overnight. I don't think anyone is suggesting that we try and get 100% of the workforce into graduate level or higher employment.

A large part of my job is implementing business systems; many result in decreased workload and that can mean redundancies or decreases in head count by churn. It isn't the skilled workers jobs that are being automated it is the guy who spends 38 hours a week doing, reasonably complex, data entry for £18k.

I wasn't really thinking of the help to do your job rather the help to live your life because one CBA.

Household domestics, gardeners, concierge services, coffee shop workers, car wash operatives, laundry & ironing services etc.

Yes Business Change, Process Management, Service Delivery Improvement is fascinating and I appreciate where you are coming from. Always nice chasing the arms and legs to balance the business case.

Deangelo

N1AK wrote: »

That really is crazy isn't it? We tend to think of a roof over our heads as a basic necessity (which I agree it is) yet millions need government help to get one. We as a society seem to be in denial about how big a problem we are facing

The only reason millions need government help is because the government help has pushed up prices beyond where they would be without said government help.

As the government help is going down every year going forward from now on, so will rents and property values.

grizzly1911

Deangelo wrote: »

The only reason millions need government help is because the government help has pushed up prices beyond where they would be without said government help.

As the government help is going down every year going forward from now on, so will rents and property values.

With ever increasing population, increasing levels of employment, limited supply why will they start going down? The occupants will just get displaced if they can't keep up.

N1AK

grizzly1911 wrote: »

Household domestics, gardeners, concierge services, coffee shop workers, car wash operatives, laundry & ironing services etc.

That I agree with, though as a cleaner is now being paid to offer a trusted personal service to a high earner they are probably earning more than they would if the job didn't exist.

The jobs that will get displaced are those that are least geographically tied (non-skilled production for example) or don't provide perceived value (shops like HMV shutting as Amazon expands etc).

Look at how much people are willing to pay for a coffee these days and the wages earned vs the kind of shops available ~20 years ago and the wages they would have paid. The wealthy in society spend more on those kinds of services, and those providing those services benefit.

Deangelo

grizzly1911 wrote: »

With ever increasing population, increasing levels of employment, limited supply why will they start going down? The occupants will just get displaced if they can't keep up.

I would not be so sure about increasing levels of employment. Did you mean to say increasing levels of unemployment?

You could have all the population growth in the world it does not make any difference if cost of housing is more than people can afford.

You are right about the occupants will just get displaced if they cant keep up. I think this will happen slowly over the years as benefit cuts keep increasing and many people will have to move to cheaper areas. But this will free up supply and there will be less demand due to less government help in the nice areas. The end result will be lower rents in without government support in nice areas.

There may even be some growth in rents in less popular areas, but not necessarily. If its not cheap enough people will just move somewhere cheaper. There are lots of cheap areas in the UK.

robmatic

Deangelo wrote: »

I would not be so sure about increasing levels of employment. Did you mean to say increasing levels of unemployment?

Employment is increasing.

http://www.ons.gov.uk/ons/rel/lms/labour-market-statistics/june-2013/index.html

Hope this helps.

ukcarper

Deangelo wrote: »

I would not be so sure about increasing levels of employment. Did you mean to say increasing levels of unemployment?

You could have all the population growth in the world it does not make any difference if cost of housing is more than people can afford.

You are right about the occupants will just get displaced if they cant keep up. I think this will happen slowly over the years as benefit cuts keep increasing and many people will have to move to cheaper areas. But this will free up supply and there will be less demand due to less government help in the nice areas. The end result will be lower rents in without government support in nice areas.

There may even be some growth in rents in less popular areas, but not necessarily. If its not cheap enough people will just move somewhere cheaper. There are lots of cheap areas in the UK.

With 93% of people claiming housing benefit working will the take their jobs with them.

grizzly1911

Deangelo wrote: »

I would not be so sure about increasing levels of employment. Did you mean to say increasing levels of unemployment?

As we keep growing both statements can be true.

If accommodation is not keeping pace with growth then demand can only grow. If demand grows then prices will follow unless supply is increased.

I think the gap between rich and poor is growing in income and personal wealth. I am sure the demand from the higher earners will take up the slack from the those that can't keep up.

I think the mix of property will change.