The Budget

ukcarper

MFW_ASAP wrote: »

Or do what I did and just rent a room in a shared house. It's amazing that despite having so many advantages in being a citizen of the First World, that there are still some people who expect a leg up.

They could learn a lot from the poor people who are literally dying to get here just for the chance to get a job, any job, and make something of themselves.

It truly is the Entitled Generation.

That's all they get housing benefit for now.

merlin68

'Rents paid in the social housing sector will be reduced by 1 per cent a year for the next four years.'
Can someone explain the above bit to me please.

Thrugelmir

merlin68 wrote: »

'Rents paid in the social housing sector will be reduced by 1 per cent a year for the next four years.'
Can someone explain the above bit to me please.

Previously Housing Associations could raise rents by inflation plus 1% every year. Now they have to be lowered.

The impact was to increase rents in the market across the board, i.e. private rents moved in line. Thereby increasing cost of HB to the Treasury.

This is obviously part of a much wider policy which includes reducing tax relief on BTL interest. To address the wider issue of the cost of housing. Expect more levers to be pulled in future budgets.

wotsthat

Graham_Devon wrote: »

However, having said that, the various vested interests, such as Emoov, PWC, Knight Frank etc are all stating these costs will be passed onto tenants through increased rents.

My gut feeling is that if landlords could all just increase rents, they already would have done.

Deloite go as far as suggesting landslords could now struggle to turn a profit. I would say in response they shouldn't have been lent the money if this tax change see's them struggling to turn a profit.

This comes up a lot. If the cost of steel increased and it affected all carmakers by £150 per car it wouldn't be a surprise if the cost of a car increased by around £150. It would be a nonsense to say if the car makers could just increase the cost of a car by £150 they already would have done.

The costs that were being met by the taxpayer are now looking for a new home which doesn't mean it's guaranteed to be passed on but only a poor business responds to an increase in costs by doing nothing.

Graham_Devon

wotsthat wrote: »

This comes up a lot. If the cost of steel increased and it affected all carmakers by £150 per car it wouldn't be a surprise if the cost of a car increased by around £150. It would be a nonsense to say if the car makers could just increase the cost of a car by £150 they already would have done.

The costs that were being met by the taxpayer are now looking for a new home which doesn't mean it's guaranteed to be passed on but only a poor business responds to an increase in costs by doing nothing.

As rates are so low, there should be spare capacity in the rents.

Or are we to assume landlords only ever pass on any increase....but never a decrease?

You see, the car makers....they pass on decreases too in order to compete.

cells

But working families in social housing who earn a combined £30,000-a-year - or £40,000 in London - will be ordered to pay the full market rates, meaning their monthly rent will soar.

this has got to be one of the bigger changes and probably a very stupid idea

if you are paying £600 month a rent and it goes to £2600 a month because your combined income is >£40,000 you will definitely make sure you get your income below £40,000

In London alone the social housing stock is ~850,000 units. There must be lots of people who are on a combined income of >£40k considering the average full time income in London is >£40k

unless there is a sliding scale of sorts its going to be madness and force people out of work to try and hold onto their social housing rent subsidies

wotsthat

Graham_Devon wrote: »

As rates are so low, there should be spare capacity in the rents.

Or are we to assume landlords only ever pass on any increase....but never a decrease?

You see, the car makers....they pass on decreases too in order to compete.

I'd assume a couple of things. Firstly, when rates fell it coincided with increased deposits and an increase in demand for rented. i.e. the steel is an example of something happening in isolation whereas your example isn't. There's also a possibility, more so in London, that yields have fallen because BTL owners saw a nice increase in profits but have gradually been passing on to attract the best tenants.

Secondly, I wouldn't assume the rental market is efficient. I know the price paid for every house in the UK and there are a multitude of indices to help me work out current values. There's no simple way to do the same with rented.

Even if we assume landlords just pocketed the cash and they've had these enhanced margins for over 6 years the point still stands - a good business tries to mitigate increased costs. Reacting to increased costs by doing nothing is a recipe for disaster.

Increased costs you try to pass on. Decreased costs you try to keep. Same for car makers and BTL owners - if car makers are passing on cost savings its because they have to. If BTL owners didn't pass on cost savings it's because they didn't have to. There are many reasons why this is the case but it's not because car makers are nice and BTL owners are nasty.

Generali

cells wrote: »

this has got to be one of the bigger changes and probably a very stupid idea

if you are paying £600 month a rent and it goes to £2600 a month because your combined income is >£40,000 you will definitely make sure you get your income below £40,000

In London alone the social housing stock is ~850,000 units. There must be lots of people who are on a combined income of >£40k considering the average full time income in London is >£40k

unless there is a sliding scale of sorts its going to be madness and force people out of work to try and hold onto their social housing rent subsidies

Surely you'd exercise your right to buy...?

Mistermeaner

I'm too busy paying taxes and raising my son to read through all the bumf. Can someone just tell me if I'm now going to be better off.

Single dad, earns 80k paye, cheap house, small mortgage, good dc pension, modest savings, no benefits or tax credit of any kind, don't drink or smoke, 1 car. 1 son age 8 probably won't go uni.

lisyloo

You'll be slightly better off (because the income tax thresholds are moving up).