arrears have increased by 340% following the housing benefit cuts

ukcarper

Deangelo wrote: »

Yes I can see it becoming normal again all over the UK. Freeing up lots of supply and getting rid of lots of demand.

So the argument seems to be on the one side the property bears are saying that prices are so high people can only just afford housing costs. As incomes go down with future cuts to Tax credits/child benefit housing benefit and all when universal credit replaces them all, the bears say this will put downwards pressure on property because they are already at their high limit what people can afford.

the prop bulls seem to say people will just have to spend less on other things as housing costs go even higher than their highest limit what can be afforded. I say in many cases this is already the case, all those on one meal per day due to all their money going on housing costs.

I say to the prop bulls that the free market does not work like that. Things always correct in time. Either average incomes go up a lot (unlikely) or property costs (rent and house prices) will come down over the next few years as the cuts start to bite.

With regards to housing I'm neither a bull or a bear, I would prefer prices to stay as they are in nominal terms falling in real terms. But your arguments do not stack up and the only thing that will bring house prices down is a massive house building program especially in the areas where prices are high.

Deangelo

ukcarper wrote: »

With regards to housing I'm neither a bull or a bear, I would prefer prices to stay as they are in nominal terms falling in real terms. But your arguments do not stack up and the only thing that will bring house prices down is a massive house building program especially in the areas where prices are high.

Where do you think my arguments do not stack up? Do you not agree that universal credit is coming in this October and it will affect millions? Or do you not agree that housing costs are already at the high end of what people can afford?

grizzly1911

ukcarper wrote: »

With regards to housing I'm neither a bull or a bear, I would prefer prices to stay as they are in nominal terms falling in real terms. But your arguments do not stack up and the only thing that will bring house prices down is a massive house building program especially in the areas where prices are high.

@Deangelo

What UKC says really. I am not a bull or a bear either. I think property in most areas of the country will continue to flat line for a few more years then rise slowly. I brought my house to live in, I expected it to appreciate roughly in line with inflation over the long term.

More house building is required and a good slug (IMO) needs to be on an improved council house model funded by the taxpayer, amortised and collected through rent and or a re-diredted "HB subrogation", to make any meaningful difference.

ukcarper

Deangelo wrote: »

Where do you think my arguments do not stack up? Do you not agree that universal credit is coming in this October and it will affect millions? Or do you not agree that housing costs are already at the high end of what people can afford?

Explain how it will reduce the actual amount tpeople will get as I understand it won't and if it does the amount will be small.

Deangelo

ukcarper wrote: »

Explain how it will reduce the actual amount tpeople will get as I understand it won't and if it does the amount will be small.

It may be small to start with, but some say it will be a lot less than taxcredit for most working families. It will get less and less per year going forward, there is no way it can be sustained at these levels. All this happing at the same time as interest rates will slowly be going up over the next several years. How can it all not put downwards pressure on housing costs?

ukcarper

grizzly1911 wrote: »

@Deangelo

What UKC says really. I am not a bull or a bear either. I think property in most areas of the country will continue to flat line for a few more years then rise slowly. I brought my house to live in, I expected it to appreciate roughly in line with inflation over the long term.

More house building is required and a good slug (IMO) needs to be on an improved council house model funded by the taxpayer, amortised and collected through rent and or a re-diredted "HB subrogation", to make any meaningful difference.

Yes I pretty much agree with that and although I didn't mention it this time I agree on council house type.

The only thing I would add is that I'm not sure what will happen to prices and admit to being surprised to find prices increasing in my area.

ukcarper

Deangelo wrote: »

It may be small to start with, but some say it will be a lot less than taxcredit for most working families. It will get less and less per year going forward, there is no way it can be sustained at these levels. All this happing at the same time as interest rates will slowly be going up over the next several years. How can it all not put downwards pressure on housing costs?

It will be a slow incremental process and if interest rates rise most likely earning will to. When LHA was reduced to the 30% percentile people were saying rents would fall they didn't the £400 cap also has made no difference .

OffGridLiving

grizzly1911 wrote: »

They will just have to readjust their expectations from life.

From my previous post:-

That 90% of HB claimants that are working presumably buy consumer items, find money for holidays, buy cars, have children etc. Presumably some of this stuff will have to stop being brought if they want shelter.

Totally agree. People will go back to the days when 'want' and 'need' weren't the same thing. Good post, Griz.

ermine

Deangelo wrote: »

Where do you think my arguments do not stack up? Do you not agree that universal credit is coming in this October and it will affect millions? Or do you not agree that housing costs are already at the high end of what people can afford?

There are other responses possible to high housing costs than house prices coming down. I have no personal desire to see house prices as high as they are relative to earnings, but don't see that changing too much because of the cultural expectations in the UK.

When I started work in London I shared a house with four other guys, simply to reduce housing costs because London, then as now, was damned expensive to live in.

Over the interventing decades Brits have been thinning ourselves out. More of us want to live on our own. Families want a house to themselves. Families want a room for each child. These are all developments in recent decades, and have resulted in more of our individual income going towards housing.

There's no law saying the direction of living density must always go down. There are great economies of scale in sharing your accommodation with other households - you share all your white goods, you waste much less food, and you pool skills. I repaired the electrical bits, and the plumbing others did a better job of cooking and bicycle repairs

As Britain gets a little bit poorer though the whole world in general gets a bit richer we will rediscover some of those ways of reducing our accommodation costs. If it makes us a little bit less narcissistic and consumer-orented that may not be altogether a terrible thing...

dktreesea

paulineb wrote: »

Personally, Ive cut down on everything. My heating is rarely on. Last month my gas bill was 37 pounds. 17 of that was gas usage, the rest was my standing charge and VAT

I dont smoke and never have. I dont have a tv. Im on the cheapest mobile tariff.
I buy a bus ticket which I need because I teach fitness classes and I need to take a sound system with me, thats £9 a week.

And if I do go out with friends on occasion, its not unusual for me to spend £3 or £4 of an evening.

I can make an evening meal that costs between £1 and £1.50 and I use a lot of the sites that sell off food close to or past its best before date such as approved foods.

Some stories in the press do the perception of what people who get housing benefit do no favours at all, because for everyone saving thousands a year on benefits and overpaying mortgages, there are people who are just scraping by.

The roof over my head is priority but this HB cut has had a big impact on my life, even £40 a month when you dont have a lot of money is a big drop in income.

Yes, I can appreciate that even £10 a week out of someone's budget can have a huge impact. But is there anything stopping you from working more, either for someone else or on your own account, to make up that shortfall? E.g. doing surveys and clicks online, or selling a few personal things online then reinvesting some of the money made in some other stuff to sell?