Thursday, Jul 01, 2010
New LHA Rates Have Huge Implications for All Landlords
Landlord Association: New LHA Rates Have Huge Implications for All Landlords
This is the crunch time - if what landlord association claim is true, then those expensive properties will find private renters who will
pay the same rates for it. If not, then we will see rent fall in the expensive areas. But they do have a point that rents in outer
borough of say £350 will now go to £400...
Posted by easybetman @ 08:27 PM (965 views) Add Comment
4 Comments
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1. fubar said...
Interesting article, predicts rising rents and house prices in boroughs neighbouring the expensive ones like Westminster as an exodus of LHA tenants gets under way. Possible I suppose. Although the article is short on a complete analysis of all the possibilities. i.e. falling prices as more accidental BTL landlords sell up when the heat gets turned up.
2. Moll1085 said...
Does anyone know, when they start calculating LHA from the 30 percentile mark next year, if council /housing associations rental cost are used in that calculation? and if they are does any one know the percentage of council/housing asc to private rental, as I have a sneaky suspicion that the con/libs are trying to bring HB payments in line with local authority /ha costs, which would have a massive effect on the BTL brigade and the housing market as a whole.
3. paul said...
Hang on.
The fact is that landlords will be taking the hit on their bottom line. There's no way that they can afford to raise rents and no way that LHAs will allow the described uplift from £350 to £400.
Take the pain landlords, it's been coming your way for some time!!
4. techieman said...
"then those expensive properties will find private renters" - will they why? I mean if that were the case why wouldnt they be being rented to private people now? If you any landlord they would prefer private renters over DHS.... nope it means rents must fall.
From the article:
"The very real concern is that as a result of the new caps, some vulnerable people will be forced to move from their old homes in these expensive areas to other areas – one has horror visions of armies of old grandmothers with disabilities and young Mums being forcibly moved to cheaper boroughs further out." cynical scaremongering rubbush.
"So what will these landlords do? Well, they will have to 1) Accept reduced rents from their old LHA tenants but keep going or 2) Give notice to the LHA tenants and let to non LHA dependent tenants instead or 3) Sell up." This choice depends on the economics of the arrangement for the landlord - i.e. his costs. Personally i think he just does 1 in most cases. However when new rentals come to market, these will be offered to private renters (with a knock on reduction).
As for moving to less expensive boroughs.... well its pretty certain this law will come in, but its not yet finalised as to what it will look like. I would have thought the government would be aware of this, and would likely prorate the cap across boundraires.