arrears have increased by 340% following the housing benefit cuts

Graham_Devon

I do feel sorry for those that are struggling with this. Though in some of the cases I have heard, it's not so much struggling, just re-adjusting. For example, one lady on the radio was complaining she now had to pay £14 per week more for her 3 bed.

Her son was living with her (so required 2 beds) though he was 18 and in employment. She didn't feel it was "fair" to ask him for the £14 per week, and that the taxpayer should pay.

I do hope the government stick with it. It will bring rents down in the end. It will have too, as the private sector can't afford what landlords are demanding in the same way housing benefits could.

Thrugelmir

IveSeenTheLight wrote: »

Two points to your post: -

1. Can you please show a link to where housing benefit has proven to increase rents and by what extent?
   
   
2. In terms of disposable income prioritisation, where would most people rate shelter? i.e. are there are areas of expenditure which can be reduced to secure shelter, heating and food?

Simple answers are:-

1. The Local Housing Allowance is set at the 30th percentile level for rents in the Broad Market Rental Area. Which will be driven by market forces.

2. Red herring. Doesn't address the fact that the level of spending is currently unaffordable.

grizzly1911

http://www.bbc.co.uk/news/uk-23122369


The consequences of the housing benefit cut introduced in April are worse than feared, the National Housing Federation has said.
Rent arrears have soared in some areas while larger houses are lying empty as people refuse to move into them.....

.......Also looking for a smaller property is Paul Wilson.
The 38-year-old has had his housing benefit cut by £11 per week since April but instead of going into debt, he's cut back on his outgoings, particularly energy and food.
"I now get by on one meal a day," he said.
His fortnightly food budget is £25. He's been looking for a job for years and has tried unsuccessfully on two separate occasions to start his own business.
He's been told he's likely to wait years to find a one bedroom property in his neighbourhood on Teesside. But even if that happens, a move won't be straightforward.
"Even if someone is willing to move, there's no funding for removal costs. [I'd have to find] money to move, which basically I just don't have," he said.

Hoopie1

Who would have thought that the National Housing Federation might come out with something like this?

IveSeenTheLight

Thrugelmir wrote: »

Simple answers are:-

1. The Local Housing Allowance is set at the 30th percentile level for rents in the Broad Market Rental Area. Which will be driven by market forces.

2. Red herring. Doesn't address the fact that the level of spending is currently unaffordable.

Sorry Thruglemir, neither of your answers were in fact answers.
Try again.

1. How much has rents risen because of housing benefit?

2. How is housing prioritised in terms of disposable income spending?
(We've discussed this before so I will send a link again if it helps)

robmatic

grizzly1911 wrote: »

http://www.bbc.co.uk/news/uk-23122369


The consequences of the housing benefit cut introduced in April are worse than feared, the National Housing Federation has said.
Rent arrears have soared in some areas while larger houses are lying empty as people refuse to move into them.....

.......Also looking for a smaller property is Paul Wilson.
The 38-year-old has had his housing benefit cut by £11 per week since April but instead of going into debt, he's cut back on his outgoings, particularly energy and food.
"I now get by on one meal a day," he said.
His fortnightly food budget is £25. He's been looking for a job for years and has tried unsuccessfully on two separate occasions to start his own business.
He's been told he's likely to wait years to find a one bedroom property in his neighbourhood on Teesside. But even if that happens, a move won't be straightforward.
"Even if someone is willing to move, there's no funding for removal costs. [I'd have to find] money to move, which basically I just don't have," he said.

Could he sublet his spare room for £11 a week?

IveSeenTheLight

Graham_Devon wrote: »

I do hope the government stick with it. It will bring rents down in the end. It will have too, as the private sector can't afford what landlords are demanding in the same way housing benefits could.

I rent out three properties and none have ever been on housing benefit.

All have been private sector.

I wonder indeed how much of an impact it will have on rents, especially as the population is increasing.

More likely people will adjust their spending from elsewhere / more people sharing / renting rooms out.

Many families did this in the past and unfortunately may have to again.

IveSeenTheLight

IveSeenTheLight wrote: »

2. How is housing prioritised in terms of disposable income spending?
(We've discussed this before so I will send a link again if it helps)

Here's the discussion
http://forums.moneysavingexpert.com/showpost.php?p=52741751&postcount=32

shortchanged wrote: »

But the simple fact is ISTL if people can't afford it they can't afford it.

There simply isn't a bottomless pit of money which is what some LL's seem to think there is.

Agreed, there isn't a bottomless pit of money, therefore people have to consider prioritising their expenditure.

Generali posted a good link to the breakdown of household expenditure and listed their weightings in this post from another thread

Generali wrote: »

This simple version (link) opens as a .pdf.

2011 weights for the RPI:

Food......118
Catering...47
Alcohol.....60
Tobacco...28
Housing...238
Fuel and light...42
Household goods..65
Household services..63
Clothing and footwear..44
Motoring...137
Fares & other travel..20
Leisure goods.....36
Leisure services..64

They will correspond pretty well with how the average person in the UK spends his or her money. The above is out of 1,000 so the average person spends £2.80 on tobacco of every £1,000 they spend in total (that's spend not earn). A smoker will most likely spend a lot more than that and a non-smoker a lot less (probably £0) but Mr Average spends £2.80.

Here is a really good explanation of the RPI & CPI.

To which I gave re-ordering into a list of priorities

IveSeenTheLight wrote: »

Very Good.
Now, forgetting about the percentages for a second, what would most people priorities lie in order of necessities

For me: -
Food......118
Housing...238
Fuel and light...42
Household services..63 (Not sure what this is for given Fuel and Light are above)
Motoring...137
Clothing and footwear..44
Leisure goods.....36
Leisure services..64
Catering...47
Fares & other travel..20 (Motoring is above)
Household goods..65
Alcohol.....60
Tobacco...28

Taking clothing downwards, that's 36.4% that could be reallocated to higher priority on the list.

So you can see that using the average, I've highlighted that there is at least 36.4% of disposable income that could be reallocated to higher priorities of which housing has to be a pretty high priority

A question back to you then....
If your wages increased by 3% but Housing, Food and Utilities all increased by 5%, where would you find the funds to pay these from?

Thrugelmir

IveSeenTheLight wrote: »

Sorry Thruglemir, neither of your answers were in fact answers.
Try again.

1. How much has rents risen because of housing benefit?

2. How is housing prioritised in terms of disposable income spending?
(We've discussed this before so I will send a link again if it helps)

1. My response was based on an ever spiralling HB bill. With over 5 million people now receiving HB. The amount that the Government makes available will in itself impact the market.

2. Lack of disposable income will force people to make choices. One likely course of action is simply not to pay the rent. So the problem then becomes the Landlords. Many BTL LL's are dependent on having tenats to pay the mortgage. So perhaps better to lower the rent than to have a void period. Commercial decision at the end of the day.

Fintwo

Ronaldo_Mconaldo wrote: »

If they can't live on £26k of benefits a year then hard luck.

For some of us with large families living in the city that £26K makes up most of our housing benefit.