Discussing UK law. Links: swarb.co.uk | law-index | Acts | Members Image galleries

Housing War

Housing War

Postby dls » Mon Jul 15, 2013 5:20 am

It seems to me that the government is carrying out an experiment - can it, by reducing housing benefits, reduce also private housing rental values. It seems to be an alternative to a more politically awkward choice of rent control.

Sadly those caught in the middle are those least able to cope with the cross-fire.

Can the government bring down rental values? Is there such a class of housing for which the only realistic tenant is one receiving housing benefits?
David Swarbrick (Admin) dswarb@gmail.com - 0795 457 9992
User avatar
dls
Site Admin
 
Posts: 11789
Joined: Thu Nov 01, 2012 1:35 pm
Location: Brighouse, West Yorkshire

Re: Housing War

Postby diy » Mon Jul 15, 2013 6:34 am

Had they implemented the benefits reform at the start of the economic problems, they may well have been able to dent the lower end of the private rented sector. However, house prices are on the up again and that tends to raise the cap on rents. Interest rates are also likely to go up as well, both of which will have a raising affect on rental prices.

Do many private landlords rent to both? I personally think you tend to specialise in one or the other. You either gear your place up to pitch to the LA or you work with an agent to get a private, working tenant.

If we get a mass movement of long term unemployed from high demand areas, then you will get dip in demand as some LL switch from benefits to working tenants.

To be honest, if they wanted to do this it would have been easier for the LA sector to simply state what rent they will pay and let the LL decide if the security of income was worth the lower amount.
My suggestions are not legal advice
User avatar
diy
 
Posts: 2327
Joined: Fri Nov 02, 2012 10:06 pm

Re: Housing War

Postby Slartibartfast » Mon Jul 15, 2013 9:54 pm

dls wrote:It seems to me that the government is carrying out an experiment - can it, by reducing housing benefits, reduce also private housing rental values.


If the govt holds it's nerve and maintains this through the next parliamentary term, it is feasible that they could turn the clock back on housing entitlement - so far back that we'll think we're in a Hovis advert.

By simultaneously capping what the state is prepared to pay and deregulating the market for accommodation, they might drive a race to the bottom. Why shouldn't three families share a semi for example, each having one private bedroom and common use of the other spaces? To the present government's neo-liberal view, the re-introduction of cheap, squalid and overcrowded pauper kennels is a necessary step towards a low-tax economy.

I have a tiny scrap of sympathy, when we discuss a single person occupying a three bed house at public expense. Moving towards a 'right-sizing' policy to reduce under-occupancy is very necessary, but I fear our political leadership intends to go some way further than that. I think they dream of ghettos, barrios, slums, tenements, sink estates, shanty towns and multi-generational / multi-occupancy 'battery hen' flats of the sort found in the Third World.

Anyone for another slice of Soylent Green?
"Judicial tergiversation is not to be encouraged"
User avatar
Slartibartfast
 
Posts: 3745
Joined: Thu Nov 01, 2012 5:06 pm

Re: Housing War

Postby dls » Tue Jul 16, 2013 9:43 am

Moving towards a 'right-sizing' policy to reduce under-occupancy is very necessary, but I fear our political leadership intends to go some way further than that. I think they dream of ghettos, barrios, slums, tenements, sink estates, shanty towns and multi-generational / multi-occupancy 'battery hen' flats of the sort found in the Third World.


I doubt t is a dream, but I can see a sleep walk.
David Swarbrick (Admin) dswarb@gmail.com - 0795 457 9992
User avatar
dls
Site Admin
 
Posts: 11789
Joined: Thu Nov 01, 2012 1:35 pm
Location: Brighouse, West Yorkshire

Re: Housing War

Postby landlordnightmare » Tue Jul 16, 2013 12:52 pm

I tried to resist commenting on this thead but...

This is not an overnight problem it has been created by a generation or two of under investment in building affordable housing. Demand is way out stripping supply - fundamental ecomonics drives cost up in that secnario. Private money will seek a return on investment - even in rented accomodation that is still only around 6% at current prices (OK that return is not consistent across the board but an average).

You can't drive private rents down without the prices also being driven down as private money will move to other investments offering a better return, a massive collapse in housing prices to allow rents to come down is both politically and economically very unattractive.

Catch 22. Personally I believe the failed social experiment of massive building of affordable housing in high rise estates resulted in now 40 years of failure to find (or even look for) a workable alternative - we suffer the consequences now. When was the last time any government had any vision that lasted beyond the next election (or at best the one after that)?

There are no short term solutions - but (maybe unfortunately) the only long term solution is a sensible long term building program that will eventually have the affect of driving prices down - but if over a long enough period the affects of stagnant house prices in real terms can be no bad thing. A quick sharp shock and a collapse in housing prices might work too - but I can't see anybody voting for that, or voting for any government that created such a scenario.

Just my opinion of course.
Note: I am not legally qualified, just been around a few blocks. The sorry cynic.
landlordnightmare
 
Posts: 2001
Joined: Wed Feb 06, 2013 2:37 am

Re: Housing War

Postby dls » Tue Jul 16, 2013 1:17 pm

This was one of Thatcher's BIG mistakes - selling off council houses.

a massive collapse in housing prices to allow rents to come down is both politically and economically very unattractive.


We live in a society with a politically distorted view of housing ownership and with false self-damaging expectations. I think house prices should come down again and substantially.
The booms in house prices were at the core of the false economics leading us to the present tales of woe.

By refusing to pay over the top in housing benefit, those housing owners renting to that sector will have to look elsewhere.
David Swarbrick (Admin) dswarb@gmail.com - 0795 457 9992
User avatar
dls
Site Admin
 
Posts: 11789
Joined: Thu Nov 01, 2012 1:35 pm
Location: Brighouse, West Yorkshire

Re: Housing War

Postby landlordnightmare » Tue Jul 16, 2013 1:38 pm

dls wrote:This was one of Thatcher's BIG mistakes - selling off council houses.


Not quite (in my opinion), her mistake was not re-investing the proceeds in building more. As any sensible investor should have realised - if I have invested in this thing in the past and made a great profit for myself and many others in the process - what is to stop me doing it again with my proceeds?

dls wrote:
a massive collapse in housing prices to allow rents to come down is both politically and economically very unattractive.


We live in a society with a politically distorted view of housing ownership and with false self-damaging expectations. I think house prices should come down again and substantially.
The booms in house prices were at the core of the false economics leading us to the present tales of woe.


I don't disagree. Note I said:

but if over a long enough period the affects of stagnant house prices in real terms can be no bad thing. A quick sharp shock and a collapse in housing prices might work too - but I can't see anybody voting for that, or voting for any government that created such a scenario.


It needs to be done, just how and over what period? If it took 40 years+ (my opinion) to create the problem it aint going to be fixed overnight - short term extreme pain = long term gain? Maybe, but extremely high risk.

And Cameron is indeed jumping on political 'opportunism' to act in a short term fashion to expoit the fact that whilst everyboy is sufferring those who work will question those on benefits more than 'in the good times'.

dls wrote:By refusing to pay over the top in housing benefit, those housing owners renting to that sector will have to look elsewhere.


Maybe - but that goes nowhere to increase the supply (and that is what is needed) - it does the opposite.
Note: I am not legally qualified, just been around a few blocks. The sorry cynic.
landlordnightmare
 
Posts: 2001
Joined: Wed Feb 06, 2013 2:37 am

Re: Housing War

Postby dls » Tue Jul 16, 2013 1:41 pm

it aint going to be fixed overnight - short term extreme pain = long term gain? Maybe, but extremely high risk.


Agreed, but arguably we have had 5 years already.
David Swarbrick (Admin) dswarb@gmail.com - 0795 457 9992
User avatar
dls
Site Admin
 
Posts: 11789
Joined: Thu Nov 01, 2012 1:35 pm
Location: Brighouse, West Yorkshire

Re: Housing War

Postby diy » Tue Jul 16, 2013 3:30 pm

Arguably (and a little controversial) mass Immigration has done nothing to ease the burden. Reverse the immigration trend and you ease pressure on housing. But there will be negative side affects.
My suggestions are not legal advice
User avatar
diy
 
Posts: 2327
Joined: Fri Nov 02, 2012 10:06 pm

Re: Housing War

Postby Boo » Tue Jul 16, 2013 6:24 pm

There has been widespread concern in the sector that the government plans to take welfare reform to another level by trying to move more tenants onto higher rent payments while capping benefits.

Housing minister Mark Prisk told delegates at the Chartered Institute of Housing’s annual conference last week that associations must take a rigorous approach to look at every re-let and maximise cross-subsidy from existing stock. But this could push up arrears, experts say, as tenants struggle to keep up payments on the higher rent properties, especially given the continuing squeeze on benefits.

‘In the areas where we can convert, what does that mean to people that are on low incomes with salary constraints?’ asks Angela Lockwood, chief executive of 4,000-home housing association North Star Housing.

Some see the move towards higher affordable rents as an indication the government is trying to accelerate the demise of social rented housing, pushing tenants into less affordable properties, while at the time restricting welfare.

Mr Menzies of Stones Solicitors says: ‘If there is this greater emphasis on flipping over [rental models], how are the needs of the very poorest of the poor going to be met?’

http://www.insidehousing.co.uk/finance/ ... 37.article

A landlord I signpost clients to is giving up renting to people on HB.
HB, unless safeguarded is going to the tenant before it reaches the landlord.
God - "I have made Mankind!"
Angels - "You screwed up a perfectly good monkey is what you did. Look at it. It's got anxiety!"
User avatar
Boo
 
Posts: 3780
Joined: Thu Nov 01, 2012 1:53 pm
Location: On the edge!

Next

Return to Benefits

Who is online

Users browsing this forum: No registered users and 1 guest

cron