1. drewster said...

It's about Housing Benefit recipients losing homes, not homeowners.

If I've interpreted this correctly, the National Housing Federation believe that there are 750,000 people (in London & the South East alone) who are HB claimants living in houses which they couldn't afford even if they were working full-time. Just goes to show that the system was long overdue reform. (I imagine the figure includes a higher-than-average proportion of children, so the number of families affected will be lower.)

Brain-dead statement of the day: "The housing benefit caps could see poorer people effectively forced out of wealthier areas, and ghettoised into poorer neighbourhoods."

3. The Baldman said...

The great housing benefit scam which has kept rents (and hosue prices) artifically high is coming to an end. What is the issue?

5. uncle tom said...

As Drewster says, this was taxpayers cash - and a lot of it - that was used to prop up London house prices.

The initial measures being proposed are very modest, and the Grauniad's article is shameless scaremongering.

A gradual drawing in of HB availability will pull down house prices and their rents to match what their occupants can afford - the suggestion that there will be thousands of empty properties with their occupants roaming the streets is utter nonsense..

7. uncle tom said...

"George Osborne imposed caps on housing benefit of £400 a week for a four-bedroom property and £250 a week for a two-bedroom home."

I think most people would feel that state handouts on that scale were outrageously high. Properties can be rented for less than half that amount within a 30 minute commute time from the capital.

Hopefully these numbers will be further reduced once the bleating left have calmed down a little, and got used to the idea..

9. andrew said...

The winners here were, the funded tenants, the private landlords getting higher than average rents from taxpayers and the house price mafia. Sad as it may be for the families that have to downsize, there are many who have to live in cramped conditions already and have not had the connections one way or another to get the "sympathy" of their local council (political correct speak), to get taxpayers money to pay for their housing costs.

The proposal is fair and good, if and when it gets implemented then this will produce downward pressure on houseprices.

11. nickb said...

I'm extremely saddened to see the callousness and complete lack of sympathy on this thread for the people who will be forced out of their homes because of this. We have a right to housing benefit in time of need, having paid for it through our taxes. It's part of our social contract, it seems to me. Anyone who has been on HB will tell you that you don't get enough as it is to cover your rent, excepting some outlier cases hawked around by the likes of the Daily Mail. Why do people think that rents will magically adjust downwards, leaving things as they were? Maybe they will fall the long run (never enough because HB is also tied to an order statistic like the median rent), but people don't live in the long run, they live in the here and now. I'd like to see any of you negotiate a lower rent with a BTL landlord because your HB has fallen!
Don't forget that kids will suffer because of this either, who are completely blameless, whatever attitude one chooses to take towards their parents.
Nick

13. sibley's love child said...

@ 9

True, but you can't make an omelette without breaking some eggs. My sympathy is reserved for me and my ilk who have had to rely on a two-wage household in order to meet the exorbitant private rents kept aloft by the very welfare system that you claim is so unfair to the recipients. Max LHA for a two-bedder in my Borough is £813 pcm; my rent is £800 pcm - quelle surprise.

Feck 'em.

15. uncle tom said...

"I'm extremely saddened to see the callousness and complete lack of sympathy on this thread for the people who will be forced out of their homes because of this."

A few people living in expensive neighbourhoods will be asked to move to a cheaper district when asking the taxpayer for housing assistance.

How can anyone suggest that is callous?

- Get real!

17. nickb said...

@Uncle
Get real yourself. When was the last time you had to live on HB?
750 000 is not a few people, and what will happen to supply in the crap areas when people are forced to move there?
4 room family houses available for less than £800 per month, you say, within a 30 minute commute of the capital. Examples please.
Nick

19. mark said...

nickb

give me some money, i have decided to no longer work, i think you should keep me and feed me.. OH yeh i won't be happy unless you fit a new kitchen i want granite tops, i want a 60inch TV, i want to live in mayfair, now give me your money, by the way you don't have a choice if you won't give me money i will take it out of your taxes.. Now what can i watch on my 3D LED TV the size of the odeon one in my mayfair pad.

hmm i could do with a car and some drugs too, give me more money nickb

21. techieman said...

Nick

This is not about tennants this is about the BTL business. HB acts as a floor for private renters which then have to pay over the odds for accomodation.

It does make me smile. What really are landlords going to do? Are they going to say no - i can rent this property out to the private sector for more (really? what in this economic climate), or are they going to say hmmm this still covers my costs and so if i lose this tennant i only have to find another etc etc.

Personally i think they just swallow it - sure there will be some that dont, but if that is the case (and this obviously doesnt include the BTL jonny come latelys who have mortgaged based on a particular yield and cant afford to go under this), then why arent you going to blame the greedy parasitical landlords?

I dont think the BTLs can complain. The 1988 housing act (i think) introduced the AST. Effecvtively that gave new LLs the right to more or less print money for a while. Fair enough. The increases in HB gave those LLs more money in their pockets - fair enough. This law (assuming it comes in) will just mean they have to adopt their business plans, or maybe sell up.

I think that people in general have to adapt - i think (myself included) have had to go through some of lifes traumas without assistance from the state. If that means being uprooted then (and again i doubt that will happen in many cases) i am sorry but life is a bitch!

23. sibley's love child said...

Nickb

Collectively - as taxpayers - we are all 'dipping into our pockets' to assist those worse-off which I have no issue with. Whether life on HB is a party or not for its recipients is neither here nor there. The real issue here - and what makes me incandescent with anger - is that our own taxes are being used to price ourselves out of that basic fundamental right; that of shelter. That is why I welcome these reforms as astronomical house-prices have impoverished us all.

25. nickb said...

Mark,
I think you are missing the point. These reforms don't discriminate between different kinds of person.
Anyway, must get off this bloody board - some of use have work to do ;-)
Nick

27. letthemfall said...

It seems to be a general truth that the more money people have the more they feel they deserve it and the more contempt they pour on the recipients of benefits. Those who feel they "earn" their money through their hard work or brilliance should bear in mind that an ever-larger section of society are underpaid - the root cause of many of the credit problems we now have.

Living on benefits is a pretty thin existence for most, notwithstanding the tabloid stories about mansions. Cuts in HB will undoubtedly cause hardship for some. These things always skewed to the rich. Rises in HB quickly benefited landlords: falls will quickly disadvantage tenants. Yes, life is unfair, but trying to make it fairer is preferable to repeating that tedious cliche.

29. techieman said...

" if rents come down then so will the HB eventually because of the link to the median." Well thats actually ar5e about face.... well i think it is anyway, although i would be prepared to concede on that point!

UT - "HB is fine for the disabled, and the genuinely unfortunate" can we add to that "and those that find themselves in short term hardship". I am sure that some people get themselves in all sorts of a mess with money. But the question really is who to blame for that? All takes all sorts, i think if people get into trouble and need HB, then they should be given some education and be incentivised to come off HB.

Easier said then done - right i've now put down the socialist worker and picked up my FT.... phew that feels better!!!!

31. letthemfall said...

techieman
Well, I'm right on the first count - observed it happening when HB was introduced. Almost impossible to imagine I'm not right on the 2nd too. Yes, in time all things will even out. From the point of view of people on here, it will probably be all to the good. But if you're on HB you won't be thinking about the long term.

33. nickb said...

OK, it's worse than I thought. From April 2011, when the douple dip is really kicking in?, HB will be set at the 30th percentile of rents, not the median as at present. This is the basis for the prediction in the article. Rents may come down, but that won't help because the HB would then fall since the 30th percentile rent would then be lower.
Uncle says "Luton, Harlow" etc. I just looked on rightmove, for Luton. There seem to be about a dozen properties for 4BR less than £800 pcm, so clearly the very tail of the distribution. So, I repeat my question: what happens if literally hundreds or thousands of households try to snap up those few scummy properties?
So in answer to the original poster, yes, it's going to be a bloodbath all right. All this so we can bail out a few more f*cking bwanksters with public money.
Any on here been bailed out recently?
N

35. sibley's love child said...

"So, I repeat my question: what happens if literally hundreds or thousands of households try to snap up those few scummy properties?"

Quite, so it's absolutely right then that my wife and I (both whom are hardly rolling in it nor on a subsistence wage) can only (barely, I hasten to add) afford one of these 'scummy properties' that you speak of ;ie the cheapest 2 bed house available for rent?

It seems to me that you have you priorities mixed-up. In any event, how does reducing LHA equate to bailing out the bankers?

37. nickb said...

Many people on here seem to be living in a tabloid fantasy land, where posh London properties are generally rented by unemployed people living the high life. Here's someone who just posted on a housing blog, there must be thousands of people like her:

"I am a single parent. While my daughter has been small, I have been self employed- I use LHA towards my rent. It doesn’t cover the entire rent on a my two bedroomed terraced house- but it contributes.

When I was working full time, I still needed a small contribution from LHA to my rent. I was a social worker. Not because I was living in a mansion. Not because I was sat on my ar5e. Not even because my landlady was extortionate- she was just a buy to let mortgage holder- renting out her house, with me covering the mortgage.

I qualified for LHA not because I was a single parent- but because my income, minus my rent- was not sufficient to live on. I worked full time, and lived at benefit rates. But survived. I stopped working full time, because I couldn’t sustain living on that income(it was costing me money to go to work) and started working self employed at home.

I only make a few hundred a month at home- but without a childcare bill, I am in the same financial position as I was when working full time- and have been able to parent my daughter.

In September I return to a new job full time(if my position is there- and has not been taken by the cuts). THis is the first time since my daughter was born that work would pay. This means that it won’t.

Depending on the cost of childcare, I will either be worse off than I was when I was at work full time last time, or the same. THere is no way for me to go to work and earn enough money to live above subsistence.

This autumn- the spending review is likely to suggest that the state rewarded me for leaving my husband(when I had 80k a year coming in and an extra adult!)- and is likely to cut my tax credits on that basis.

I sit here, and I don’t entirely know what to do. I can’t suddenly have a successful marriage. I don’t have access to higher education, to retrain unless I have tuition. Social services is about to be slashed by 25 percent- and even if there is a job- I am not sure that being a social worker in those conditions is not the equivalent to asking to have your name above a Sun petition.

Me and my daughter are not going to dissapear. We are going to be in poverty, and are likely to face homelessness unless I am very smart."

N

39. sibley's love child said...

@ 37

Cry me a river; an anecdote of one does not a point make.

Which goes back to my original point; why is she in poverty? Because housing costs are too expensive. Ad nauseum.

41. nickb said...

Sibs.
I'm sorry you feel that way. The point is, how typical is this person, compared to someone gorging themselves on the supposed generosity of the system. It rings true from my experience, and everything I've read about housing in this country. I don;t know about yours.
N

43. techieman said...

Nick @ 37. This is interesting (sorry if that sounds patronising). I think you are right many benefits are not targeted properly. For example, wife gets divorced and gets maintenance payments from ex. Whether these payments are £1 or £1m a month makes no odds. So long as they dont "save" that money, it doesnt get included in the calculations for tax credits.

I understand that working tax credits kicks in for those that work 16 hrs. So these women get the maintenance and then get the full working tax credit to which they are "entitled", even though for example, the settlement ex maintenance with the old man includes the marital home.

I have no clue to what extent the factor between the person i refer and to the one you speak of is at 37, but it just isnt right.

Perhaps you are right the whole system needs an overhaul. Having said that what system would be equitable for everyone? Maybe the person @ 37 and the one who lives in the tabloid paradise are opposite outliers. Admittedly this is probably skewed against your example but how skewed? Do any of us really know??

45. uncle tom said...

Consider this:

The money currently spent on HB is enough to build a third of a million new homes each year; which, directly and indirectly, would create about a million jobs.

Within five years, the nation's shortage of housing would be fully met, leaving people free to rent or buy their homes for amounts that even those on the lowest incomes could afford.

Whilst you can't suddenly stop one and start the other, it is clear that the status quo is insane..

47. uncle tom said...

The ray of hope at the moment is that the job of housing minister, which for many years has been given to some dozy non-entity, has now been given to Grant Shapps - someone who clearly likes to make the headlines at least twice a week.

I'm not sure whether he really warms to his brief, or is merely intent on getting one of the great offices of state; but so far he seems quite promising.

I also hope that DC gave him the job because he recognises that housing is a big issue and a big problem in the UK, one that needs a dynamic and competant minister in charge..

..we shall see!

49. uncle tom said...

loc,

GS was on the box this morning talking about his 'right to build' campaign..

..that's quite a radical concept, and not 'status quo' in my book..

51. clockslinger said...

Nick B, I've watched and read with a mixture of admiration and sympathy the well reasoned and humane arguments you have mounted time and again on this thread frequently against little more than rants in response (Techiman and Wadsworths reasoned engagement excused).
I'm amazed at your staying power! I'm also amazed the learned contributiors just about managed to avoid any references to "HB scum"...or perhaps they didn't, I glazed over a bit after a while as it was like reading a poorly written version of the Daily Mail.
Let Them Fall, maybe you too have some experience of recieving HB. For sure you are right, it is not easy to survive, just as trying to live on benefits was a daily exercise in humiliation and worry even back in the eighties. Your observation on the "general rule" @27 seems to me to be entirely correct, increasingly so now the Eaton plutocrats are ruling us. It seems to me something in the operation of this "rule" provides the self assured, casual indifference to keep posting in the tone of so many contributors today. Doctor Hubris is surely long overdue for a visit in some cases.
I agree entirely with every sentiment uttered about BTL landlords being subsidised but, surely, so much public money is being poured into keeping the property markert afloat (a policy which will not change under this government) that to focus on the unfortunate recipients of HB is to misguided fixation on spending which, although the fact is conveniently ignored, helps many deserving people. I'd cane child benefit for any household on over 50k... or the fact that police officers suspended under a manslaughter investigation get full (not 50%) pay. This is petty cash in the wall of money keeping house prices up in the UK. Wait for the next lot of QE in November-ish.
Sibley @ 35, the trade off is this, isn't it? You save money on public sector spending and welfare to "balance the books", so you can supply funding to banks with insufficient liquidity via QE without the bond market getting in a flap. Of course, it also happens to be a way of implementing a certain (tried and failed) ideological agenda too. Oh, sorry, no, all the public sector unemployed get jobs in the new private sector export driven manufacturing industries I see starting up everywhere around here! (Presumably many may have to claim HB/mortgage interest payments in the meantime. Scroungers.)

53. uncle tom said...

loc,

I think GS was the architect of the election pledge - he was previously the shadow minister..

..dare we hope that both DC and GS are broadly on side?

For the moment, I'm inclined to think that positive encouragement is a better policy than cynical disbelief. I know that GS is aware of this
site, although it would probably be over optimistic to hope that he reads it routinely..

..that said, unless and until such time as we have just cause to damn the new adminstration, it would be more productive to be constructive in our commentary..

55. d'oh said...

I should add that I do understand that the major change is the shift from the median to the 30th percentile rather than the cap. Still, if I was unemployed and about to be homeless, I'd be happy to live in a 30th percentile property. From what I have seen of the rental market, the difference between the 30th percentile and 50th percentile is likely to be very small. Rents seem to be quite tightly distributed for similar properties.

For my part, I have taken out short term loans, slept on people's couches and floors, and rented rooms in share houses for years at a time because of financial circumstances (when I was working in jobs that required a Ph.D. no less!) Never slept rough, but have come very close. Things are much, much better now, but it never would have struck me back then that I would or should be entitled for the state to house me in a "good" area. If you are broke, you accept that you will have to live in scummy circumstances. The argument that we should pay high housing benefit so that some token poor people can live in wealthy areas is absurd.

57. tenyearstogetmymoneyback said...

mark wadsworth wrote

3. In cash terms, social housing costs the taxpayer absolutely nothing - and the more of it there is, the lower rents will be in the private sector - so why don't we just build more of it?

I agree.

A couple of nights ago I had a (complementary) idea which could be implemented far quicker.

The Goverenment mostly owns Northern Rock, RBS, and Lloyds so consequently owns a lot of mortgages.

Why not repossess any delinquent mortgages from these organisations and designate them as social housing.

If done properly no one would get thrown out on the street, empty BTLs would get properly allocated,
house prices wouldn't crash due to a glut (I know thats what we would like but everyone else won't let it happen).
In the long term, houses that were thought to be too valuable for social housing could be sold when tenants moved out
and more suitable ones built.

The benefit would be that in the long term any profits from the property would go back to the Government rather than
the people who (in most cases) should never have been able to buy it in the first place.

Can anyone see the flaw in my idea ?

59. tenyearstogetmymoneyback said...

uncle tom said "The Banks are not being run as a charitable arm of the state"

that might be the official policy but not what is happening in practice.
Is there anything of value left in Bradford & Bingley ? The savings arm was sold so all that is left is a load of dodgy BTL mortgages.

"If the state decides to take possession of property that is subject to a delinquent mortgage, it has to find the money to pay for it"

The whole point is it already has by bailing out Bradford & Bingley etc.

With my plan being the owner of a dodgy mortgage, which might even be on a property which is or could be rented to someone on housing benefit, the Government becomes the owner of the property so it can be used for Social Housing.

At the moment it is quite possible that there are Spiv landlords owing the Government / Bradford and Bingley £thousands, renting or trying to rent their properties to people who need Social Housing. Where is the logic in that ?

Since we don't have Jingle Mail the Government could still chase the person who took out the mortgage for any unpaid mortgage payments and grab any equity left in the property. (If there is equity then why hasn't the Mortgage owner sold it ?). I don't think they could chase the Mortgage holder for negative equity as for that a true valuation would be needed, which could only be obtained through sale at auction (which they would want to avoid).

If you think that in a few months someone is going come along and buy the whole Bradford and Bingly loan book at 100p to the £ then I can see why you don't like the idea. What do you think the real chances of them getting the money back are ?

"On average, the money paid for each house could otherwise be used to build three houses on surplus MoD land; so would be a very poor use of taxpayer's money."

I agree that would be a good long term plan, which is why I suggested gradually selling off properties in expensive areas, and using the money to build new places.

61. uncle tom said...

Yes, B & B's mortgage book appears to be a basket case, but it still has a value, even though that may be less than B & B's obligations to its financiers.

Govt. needs to cut its losses, not pile up more..

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