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You Think London Prices Can't Go Higher?


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#1 Trampa501

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Posted 03 March 2012 - 08:03 PM

SocialHsgRentTo rise

Council and housing association rents look set to rise steeply if proposals from the government and the Mayor get the go ahead.

They claim the money is needed to build more affordable homes but critics say the plans will drive people on low incomes away from some parts of London.


I know there is a resentment here of those fortunate enough to occupy council/social housing in London, but doubling their rents can only increase house prices. Why? Those out of work or claiming benefits will probably get most of the rent paid from Housing Benefit (ok so they may have to do illegal p/t work if HB doesn't cover all the rent), but what about those in decent paying jobs? They'll look to buy somewhere asap (if only in zone 4,5 or 6) once the rents start to rise.

Well done, the jealous bigrade. You've now made an overpriced housing market even worse.
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#2 Pent Up

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Posted 03 March 2012 - 08:07 PM

Can't watch the video. But I don't understand the caption paragraph. I thought rents were being cut??
Remember that buying a house is a highly leveraged investment and can result in losses that exceed your initial deposit. Buying a house may not be suitable for everyone, so please ensure that you fully understand the risks involved.


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#3 Trampa501

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Posted 03 March 2012 - 08:19 PM

Can't watch the video. But I don't understand the caption paragraph. I thought rents were being cut??

Nope, but they are trying to stop high housing benefit pay-outs.
The govt policy is to change the current social rent (which is about 30% of private) to something called "fair rent" which is 65-70% of the private market value.
What do you think those who are earning good money will do, as they realise their rents will more than double? Either a) buy B ) move away or c) stop working and claim hb.
Those who move away will find their flats/homes snapped up by benefit claimants.
But those who now decide to buy will add to the demand for housing in London, unless they all buy the place they currently occupy.

Chances of a London HPC now? Zero, I would have thought?

Edited by Trampa501, 03 March 2012 - 08:20 PM.

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#4 Trampa501

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Posted 03 March 2012 - 08:21 PM

I have to get out more. I now think Sibley could be right :o
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#5 Pent Up

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Posted 03 March 2012 - 08:45 PM

I have to get out more. I now think Sibley could be right :o


Drunk too much? He's already been proved wrong as of now.
Remember that buying a house is a highly leveraged investment and can result in losses that exceed your initial deposit. Buying a house may not be suitable for everyone, so please ensure that you fully understand the risks involved.


"The time to buy is when blood is running in the streets" Baron Nathan Rothschild

#6 aSecureTenant

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Posted 03 March 2012 - 09:09 PM

I have to get out more. I now think Sibley could be right :o


As I've posted on here before they are putting up social rents in areas, and on properties (one bed flats) where they are starting to push private (bubble) rents (I refuse to use the term "market rent").

Social rents are not just rising in London. For instance my social rent in West Yorkshire will increase from 57.29 per week to 64.62 from April 2nd (and partially because service charges cannot be hidden in the rent).

Admittedly there is a greater disparity with family homes.

Edited by "Steed", 03 March 2012 - 09:37 PM.

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#7 Dorkins

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Posted 03 March 2012 - 09:55 PM

More money being spent on rent = less money available to buy (and bid up prices). It's not rocket science.

#8 hotairmail

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Posted 03 March 2012 - 10:03 PM

I didn't understand this at all. But now I think I do....basically you're saying 'social rents' are council houses and flats? (and housing associations?)

Whereas housing benefit, paid to 'poor' peope, is not 'social rent' but rent paid to people to rent either privately or from councils/housing assocs?

Note to self: Must get up to date with the language.


But why would 'social rents' be going up because of lower housing benefit rents?

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#9 sims

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Posted 03 March 2012 - 10:20 PM

But why would 'social rents' be going up because of lower housing benefit rents?

Not on existing ones. This whole argument is about rents on newly built properties billed as affordable homes, which are much more expensive than old council/social rents.

#10 MongerOfDoom

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Posted 03 March 2012 - 11:09 PM

SocialHsgRentTo rise



I know there is a resentment here of those fortunate enough to occupy council/social housing in London, but doubling their rents can only increase house prices. Why? Those out of work or claiming benefits will probably get most of the rent paid from Housing Benefit (ok so they may have to do illegal p/t work if HB doesn't cover all the rent), but what about those in decent paying jobs? They'll look to buy somewhere asap (if only in zone 4,5 or 6) once the rents start to rise.

Well done, the jealous bigrade. You've now made an overpriced housing market even worse.



I don't follow your argument at all.

There will be less public resources going into subsidised housing, so that hardly sounds like the sort of thing likely to increase prices. Social rents will still be below market rates, hence there is very little chance of anybody wanting to leave for similar-sized accommodation elsewhere. The only effects I can foresee are i) increased interest in RTB, ii) benefits no longer covering the largest council properties, and iii) people not wanting to live in disproportionately large council houses.

Even if the effect was somehow to increase prices, subsidising the rents of an arbitrarily chosen part of the population who can afford to pay for it on their own would still be a very poor use of public money.

#11 MongerOfDoom

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Posted 03 March 2012 - 11:24 PM

Not on existing ones. This whole argument is about rents on newly built properties billed as affordable homes, which are much more expensive than old council/social rents.


I thought all new council tenants would face much higher rents anyway, of around 80% of the market rent? It seems to me that either the article below or the BBC report is confused, though they both mention the 80% figure.

http://www.telegraph...-new-homes.html

#12 peter_2008

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Posted 04 March 2012 - 12:03 AM

Where I live, rent as well as house price is back to 10 years ago if not cheaper. Not sure if this is the direct result of HB cuts, but good news anyway.

London is always a special case.

The woman in that video have a two bed flat to herself. She talked as if it is her divine right to live there. I have friends on above national average income that have been living in bedsits for 10 years in London, because they do not breed like HB claimants. Madness.

#13 Bruce Banner

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Posted 04 March 2012 - 12:09 AM

London is always a special case.


It certainly was in the 90s, Greater London had pretty much the biggest falls of the lot, about 30% from memory.
.



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Lest there be any doubt.

No I believe prices will fall and am astounded that a so called Conservative led government could act in such a stupid way. As you can see from today, there are 2,000 HtB applicants and it has been on MSM none stop all day and they make up about 3.5% of a typical months mortgages.

BTL is a good potential way to bankruptcy and yes sometimes I make points to hopefully make people think.


#14 Bruce Banner

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Posted 04 March 2012 - 12:28 AM

It certainly was in the 90s, Greater London had pretty much the biggest falls of the lot, about 30% from memory.


Not a bad guess. The Nationwide House Price Calculator shows a drop of -30.6% between 1989 Q2 and 1993 Q4 for Greater London.

http://www.nationwid.../calculator.asp

Results:-
A property located in Greater London which was valued at 500000 in Q2 of 1989, would be worth approximately 346996 in Q4 of 1993.
This is equivalent to a change of -30.6%.
.



----------------------------------------------------------------------------------------------------------
Lest there be any doubt.

No I believe prices will fall and am astounded that a so called Conservative led government could act in such a stupid way. As you can see from today, there are 2,000 HtB applicants and it has been on MSM none stop all day and they make up about 3.5% of a typical months mortgages.

BTL is a good potential way to bankruptcy and yes sometimes I make points to hopefully make people think.


#15 crash2006

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Posted 04 March 2012 - 02:16 AM

SocialHsgRentTo rise



I know there is a resentment here of those fortunate enough to occupy council/social housing in London, but doubling their rents can only increase house prices. Why? Those out of work or claiming benefits will probably get most of the rent paid from Housing Benefit (ok so they may have to do illegal p/t work if HB doesn't cover all the rent), but what about those in decent paying jobs? They'll look to buy somewhere asap (if only in zone 4,5 or 6) once the rents start to rise.

Well done, the jealous bigrade. You've now made an overpriced housing market even worse.


I did high light the higher rents to people, they are rising social rents to use as a tool to justify private rents, they arent going to build more, they are now looking for extra income and social housing is one of them.
They are trying to diffuse the argument for more social homes to be build, what this would do its restrict even more homes being built, private rents will go up aswell, these people in power have no idea how to run a country they are pushing for a revolution in this country and leading us to be the most uncompetitive driving more jobs offshore.

Edited by crash2006, 04 March 2012 - 02:19 AM.

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