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Housing Benefit Cut


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#1 Ride_on

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Posted 06 January 2012 - 12:14 AM

What is going to happen to the 10's of thousands of private renter no longer able to afford to rent their houses / flats? Are the LLs going to suddenly find 10's of thousands of renters with more money?

I doubt it, the amount of money available for rent is going down, rents will have to come down. Rents have been forced up by the weak approval system and direct payments to LLs. I'd say we might see some LL selling up, along with the reduced ability to milk it for rate holiday aswell.

The news seemed to portray single unemployed professionals living in very nice houses, but at £300/month. That was much lower than I thought possible.

#2 TheCountOfNowhere

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Posted 06 January 2012 - 08:09 AM

What is going to happen to the 10's of thousands of private renter no longer able to afford to rent their houses / flats? Are the LLs going to suddenly find 10's of thousands of renters with more money?

I doubt it, the amount of money available for rent is going down, rents will have to come down. Rents have been forced up by the weak approval system and direct payments to LLs. I'd say we might see some LL selling up, along with the reduced ability to milk it for rate holiday aswell.

The news seemed to portray single unemployed professionals living in very nice houses, but at £300/month. That was much lower than I thought possible.

A better question is what is going to happen to the 10's of thousands of numpty BTL landlords who couldn't spot a selling scam if it smacked them square in the face.

The renters will be fine, they will just move to a house where the land lord has taken the hit and is being reasonable.

The idiot BTL landlord on the other hand.....

#3 2buyornot2buy

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Posted 06 January 2012 - 09:05 AM

Looking at property bee there's some reductions in the asking rent in the one bed apartment market.

#4 Damik

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Posted 06 January 2012 - 09:40 AM

What is going to happen to the 10's of thousands of private renter no longer able to afford to rent their houses / flats? Are the LLs going to suddenly find 10's of thousands of renters with more money?

I doubt it, the amount of money available for rent is going down, rents will have to come down. Rents have been forced up by the weak approval system and direct payments to LLs. I'd say we might see some LL selling up, along with the reduced ability to milk it for rate holiday aswell.

The news seemed to portray single unemployed professionals living in very nice houses, but at £300/month. That was much lower than I thought possible.


what will happen to all of us if the UK government will run out of money such as the Greek government, because both countries spend more than they earn ????

#5 tinbin

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Posted 06 January 2012 - 11:13 AM

I think that this could have far bigger consequences for the housing market than some may think. If the facts are correct that up to 70% of the private rental sector in NI is funded by housing benefit then there will be a mass of LL's papping themselves that the government is no longer going to fund on average £500 odd quid towards the rental income that they receive. They will either have to lower the rent ... which many will not be able to afford to do due to foolishly buying an investment property at the peak of the market and having large loan repayments themselves (likely on Interest only repayments), or they will have to attempt to sell up. Given that a high majority of LL's will be in negative equity this is unlikely to be a viable option as well.

Rental costs have been kept artificially high IMO due to the ridiculously high housing benefit support by the government. The sooner this support at this level is withdrawn the better.

#6 Shotoflight

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Posted 19 February 2012 - 02:30 PM

Impact of housing benefit changes

http://www.housepric...=105924&st=3195

If it's a choice between taking a reduced rent or no rent, then I think I know what decision the landlord will make in those circumstances”

Nelson McCausland Social development minister

#7 Ride_on

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Posted 20 February 2012 - 01:20 AM

Some of points posted above where actually the point I was making, I guess I was feeling a bit tongue in cheek after seeing a particular media story / documentary that was predicting mass forced moves of those poor renters.

I have predicted this reduction some time ago, my point has always been that the bottom of the purchase market is held up by unreasonably high rents given out on benefits, you could rent quadruple the 'value' for alot less than double the price. The relationship should be more linear to RV (for example). And that once the gov't realise this the handouts will reduce, the yield calcs (proposed by certain bulls a few years back) will no longer hold up.

Another point has always been that the rental market is very dynamic and clearly represents the actual money people have to spare on accommodation, its set by the market not the LLs. Hence reducing benefits will reduce rents and house prices.

I do feel sorry for the LLs, they were suckered into this as a way to avoid buying more council houses which Maggie decided to give away and not build steadily for the increase in population. The Gov't is pulling the carpet out from underneath them now that all the borrowed money has failed to actually grow the economy.

#8 tinbin

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Posted 21 February 2012 - 04:38 PM

Some of points posted above where actually the point I was making, I guess I was feeling a bit tongue in cheek after seeing a particular media story / documentary that was predicting mass forced moves of those poor renters.

I have predicted this reduction some time ago, my point has always been that the bottom of the purchase market is held up by unreasonably high rents given out on benefits, you could rent quadruple the 'value' for alot less than double the price. The relationship should be more linear to RV (for example). And that once the gov't realise this the handouts will reduce, the yield calcs (proposed by certain bulls a few years back) will no longer hold up.

Another point has always been that the rental market is very dynamic and clearly represents the actual money people have to spare on accommodation, its set by the market not the LLs. Hence reducing benefits will reduce rents and house prices.

I do feel sorry for the LLs, they were suckered into this as a way to avoid buying more council houses which Maggie decided to give away and not build steadily for the increase in population. The Gov't is pulling the carpet out from underneath them now that all the borrowed money has failed to actually grow the economy.


Good post. I agree ... with approx 70% of Private Rental market being paid by housing benefit it is no skin off the tenants nose if it is £ £500+ per month as they dont have to pay it. This keeps rents at an artificially high level IMO. I feel sorry for the other 30% who have to pay these rents out of their wages. With the current cost of living I just cant see how it is deemed affordable at these levels.

#9 2buyornot2buy

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Posted 21 February 2012 - 04:42 PM

Good post. I agree ... with approx 70% of Private Rental market being paid by housing benefit it is no skin off the tenants nose if it is £ £500+ per month as they dont have to pay it. This keeps rents at an artificially high level IMO. I feel sorry for the other 30% who have to pay these rents out of their wages. With the current cost of living I just cant see how it is deemed affordable at these levels.

HB underpins capital values.

#10 BelfastVI

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Posted 24 February 2012 - 10:10 AM

HB underpins capital values.

It hasnt done much of a job of it

#11 2buyornot2buy

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Posted 24 February 2012 - 10:28 AM

It hasnt done much of a job of it


With the average wage at 23K and the average house at 137K - I'd say it's not done too badly.

#12 BelfastVI

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Posted 24 February 2012 - 10:54 AM

At June 2011:

Total claimants 157,808

Total public rented 43.3% (68,330)
Total private rented 56.6% (89,319)

Average weekly entitlement
- Public rented £60.09
- Private rented £79.15 x 52/12 = £343 per month(not £500).

The average private rent in the Belfast MPA is around £550 per month. (I imagine its lower outside the BMA). Therefore the average housing benefit is almost 40% lower than the average private sector rent. Whether you agree with the concept of housing benefit is one thing but I for one would not describe it as 'ridiculously high housing benefit'

The private sector rental market has risen. That is clear. In 2001 there were approximately 44,000 privately rented houses. This has increased to 113,000. Is that a direct consequence of the boom or has the fact that the government has dramatically reduced its public housing stock had an effect. The slack has been taken up by the private sector.

#13 BelfastVI

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Posted 24 February 2012 - 10:55 AM

With the average wage at 23K and the average house at 137K - I'd say it's not done too badly.

Captial values have fallen by up to 50%.

#14 2buyornot2buy

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Posted 24 February 2012 - 11:12 AM

Captial values have fallen by up to 50%.

And still out of reach of the "average".

#15 2buyornot2buy

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Posted 24 February 2012 - 11:14 AM

At June 2011:

Total claimants 157,808

Total public rented 43.3% (68,330)
Total private rented 56.6% (89,319)

Average weekly entitlement
- Public rented £60.09
- Private rented £79.15 x 52/12 = £343 per month(not £500).

The average private rent in the Belfast MPA is around £550 per month. (I imagine its lower outside the BMA). Therefore the average housing benefit is almost 40% lower than the average private sector rent. Whether you agree with the concept of housing benefit is one thing but I for one would not describe it as 'ridiculously high housing benefit'

The private sector rental market has risen. That is clear. In 2001 there were approximately 44,000 privately rented houses. This has increased to 113,000. Is that a direct consequence of the boom or has the fact that the government has dramatically reduced its public housing stock had an effect. The slack has been taken up by the private sector.


300 million a year. £1300 per year cost to every working person in NI.


Don't know where you got the average belfast rent from there BVI? Tell me it's not citylet?




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