At least 10% Housing benefit cuts could be on the way

missbiggles1

Killerseven wrote: »

Talk is it will, everybody no matter working or not.

But this will really shake things up in London, if it happens.

Lots of families will have to move further out away from London, there will be lots of desperate landlords with empty flats and mortgages mounting up, but they will find it hard to find anybody to rent to, plenty who would like to live there but not many who can afford it without housing benefit ....

A link to that information, please.

jamesd

missbiggles1 wrote: »

Why should people on benefits be able to rent cheap, self contained studios while workers don't have that option?

I'm happy for there not to be that restriction but this topic is mainly discussing those on benefits so I was writing specifically about that area.

missbiggles1 wrote: »

Apart from anything else, only those over 35 would be able to claim enough LHA/HB to rent a self contained studio.

I expect this to depend on the region and the price. I assume that a pod would be more expensive than a room in a shared house but cheaper than a normal studio flat.

jamesd

Killerseven wrote: »

Think about that last line, how can they be affordable to min wage workers. That would be one hell of a property crash, I can't see such a crash myself.

I gave examples of £50k within 40 miles of London, which at 6% gross rental yield is 57.69 a week, £2999.88 a year. National Minimum Wage is £6.50 for those 21 and over, £13,520 gross a year ignoring benefits, £12,280 net. That housing cost is 24.4% of net income and is affordable even without considering any benefits.

At say 95k the 6% yield would be £109.61 a week, £5699.72 a year, 46.4% and pushing affordability hard for a single person if they have no benefits. But that's not pods intended for low earners, it's the normal housing market today.

It doesn't take a crash, just providing housing at suitable costs for the market, using an appropriate size and location to get the job done.

Of course that's London and SE. I've seen places for under 30k outside London, even £20k, and those are quite easy to afford on minimum wage at 6% rental yield.

jamesd

lisyloo wrote: »

New build going up e.g.battersea, nine elms is about £400K for a 1 bed flat.
You need a high household income to buy that.

So buy the 90k flat in London or the 50k flat within 40 miles of London instead.

gazter

stator wrote: »

I guess slumlords will be rubbing their hands with glee as more people will be forced into living in manky dumps.

Which is an accurate description of many a council house. In my neck of the woods, its the housing associations that often act as slum landlords.

missbiggles1

jamesd wrote: »

I'm happy for there not to be that restriction but this topic is mainly discussing those on benefits so I was writing specifically about that area.

I expect this to depend on the region and the price. I assume that a pod would be more expensive than a room in a shared house but cheaper than a normal studio flat.

If it's more expensive than a room in a shared house then only those claimants over 35 will be able to claim enough LHA/HB to pay the rent. This fact doesn't vary by area.

gazter

Graham_Devon wrote: »

Just a point which I haven't seen mentioned in all the talk of shipping people off elsewhere.

Many on housing benefit (I think the majority, though I could be wrong) DO actually work. It's just they cannot earn enough, for whatever reason, could be single parent to fully pay their bills.

.

960,000 on housing benefit are working, out of a total claim of 5,000,000.

Much of the growth in working housing benefit is a push from people long term not working into employment. Often very low skilled and thus min wage = entitlement to housing benefit.

jamesd

missbiggles1 wrote: »

If it's more expensive than a room in a shared house then only those claimants over 35 will be able to claim enough LHA/HB to pay the rent. This fact doesn't vary by area.

For anyone not familiar with the rules, those under 35 are normally entitled to Housing Benefit or Local Housing Allowance at the "shared accommodation rate", the area's rate for a room in a shared house.

There are several ways that a pod that is more expensive than a room in a shared house in a particular area might be able to help:

1. Those aged 35 and over could use them at local rates, reducing demand for rooms and potentially prices. Potentially a nice step up in housing quality for the over 35s and potentially increasing the rental stock of full houses rather than those divided into rooms because rooms are more profitable than houses for landlords (but also much more work).

2. It might be possible to produce pods at rentals close enough to the shared accommodation rate to be competitive even under 35, depending on the relative costs of the pods and rooms in construction/purchase/heating. Perhaps in less desirable areas or just through more efficient building than places originally intended as family homes.

3. The rules could be changed to specifically include pods meeting certain specifications, perhaps recognising that they can potentially offer improved housing at a cost that is not high.

4. Student pods aren't all entirely self-contained. Shared kitchens and/or bathrooms are quite common, perhaps even more common than fully self-contained types. These might fit into the HB/LHA rate anyway.

5. The tenant might not have to come from the same area if a local council in one area can be allowed to pay the lower rent in a cheaper area rather than having to pay the shared accommodation rate in their own area. That lower rent could still be more than the HB/LHA for locals in the destination area.

I know that back when I was in a shared house in London on benefits I'd have considered a student pod type of place with less in the way of shared facilities a step up. And not solely because of the other tenant who once threatened me with a knife.

princeofpounds

Once again - things like pods are utterly unnecessary, if ever we allowed people the chance to actually build some accommodation to house themselves.


It just seems utterly bizarre to me that we are considering sardine-tin type of solutions when we have hectare upon hectare of exceptionally low density suburbs where you could easily build spacious mid-rise European-style apartments. I'm not even talking about touching open countryside, which is a whole other topic.


Affordability of built accommodation is not an issue - it is far, far cheaper than buying, and that is why anyone who gets planning permission on a plot hits the jackpot - the problem is the availability of permission.

missbiggles1

gazter wrote: »

960,000 on housing benefit are working, out of a total claim of 5,000,000.

Much of the growth in working housing benefit is a push from people long term not working into employment. Often very low skilled and thus min wage = entitlement to housing benefit.

Many of those in this category will be working the minimum number of hours needed to claim WTC which can be as low at 16 hours pw, so not actually workers in the way that most people mean, particularly when the "work" can be a spurious Ebay business or selling Avon products.