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Are The Landlords Kicking Off Yet?

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Anyone know any good BB for them?

BTL-ers crying....we want to know!

Mike

The way it has been sold prior to the budget they will think they have got away lightly. No tax on empty homes, lower than expected CGT active tonight without a fire sale.

It will take a while for them to twig the stealth attack on mortgage support and housing benefit.

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The way it has been sold prior to the budget they will think they have got away lightly. No tax on empty homes, lower than expected CGT active tonight without a fire sale.

It will take a while for them to twig the stealth attack on mortgage support and housing benefit.

Won't make much difference to those LLs who won't touch DSS tenants with a bargepole. General downward pressure on rents, true, but only LLs in DSS ghettos (Hastings, for example?) will really suffer.

The real sufferer will be the Daily Wail, who may be deprived of their regular "Here's a refugee with six children our researches have found, and who we've conned into saying, Yes, he would like a bigger house."

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Thanks to these low interest rates, ALL my BTLs will be paid off by year end. With the thresholds that have been set, it will not change the rent from my housing benefit single mum as well.

From Jan 2011 I'll be saving for the next half dozen - probably look to buy in the Autumn/Winter 2011.

Although I know a few BTL speculators/flippers who still hold a lot of property who may be crying into their drinks tonight.

Edited by A_Landlord

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On the face of it that seems sensible but won't the downward pressure on LLs who do take DSS tenants begin to spread? The drops will be noticed by working tenants and some of them may start to negotiate more.

Furthermore, a large number of working tenants (i.e. those in the public sector) have just been told that their wages are going to be frozen for two years, and I doubt if many in the private sector have been enjoying significant pay rises recently.

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Thanks to these low interest rates, ALL my BTLs will be paid off by year end. With the thresholds that have been set, it will not change the rent from my housing benefit single mum as well.

From Jan 2011 I'll be saving for the next half dozen - probably look to buy in the Autumn/Winter 2011.

Although I know a few BTL speculators/flippers who still hold a lot of property who may be crying into their drinks tonight.

So are you saying that the median local rents where your investments are are the same as the 30th percentile? Chops your yields a bit, no?

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think it will be a year before they start Local Housing Allowance, does not start until april october 2011

It's the 25% dept cuts of £30Billion that will have the severest effect. No cuts of this amount have ever been attempted in peacetime. It will lead to a public sector clearout. They actually fall short of being enough to erradicate the deficit - the Chancellor is being too optimistic there.

The cuts will soon have severe effect on many things including spending habits and confidence and also hous prices. With another 91 on sale here in last 7 days - now into the thousands for sale- the prices are beginning to fall already.

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So are you saying that the median local rents where your investments are are the same as the 30th percentile? Chops your yields a bit, no?

I don't think landlords have really twigged about the 30th percentile yet. They're often a bit slow mind.

http://www.landlordzone.co.uk/forums/showthread.php?t=29473

Twitter: housing benefit cap vs. housing benefit percentile

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It's the 25% dept cuts of £30Billion that will have the severest effect. No cuts of this amount have ever been attempted in peacetime. It will lead to a public sector clearout. They actually fall short of being enough to erradicate the deficit - the Chancellor is being too optimistic there.

The cuts will soon have severe effect on many things including spending habits and confidence and also hous prices. With another 91 on sale here in last 7 days - now into the thousands for sale- the prices are beginning to fall already.

Yes, it seems to me they are still living in lalaland growth projections, without the massive govt stimulus thered have been no growth, the private sector cant produce it because of the debt levels, and they are deluded to think growth will resume when govts are cutting. In fact im pretty confident that the deficit will rocket despite the cuts because GDP will be falling quicker, id put money being back in negative growth/ technical recession (coz we never actually left it) by Q4 or Q1 at the latest

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Won't make much difference to those LLs who won't touch DSS tenants with a bargepole. General downward pressure on rents, true, but only LLs in DSS ghettos (Hastings, for example?) will really suffer.

The real sufferer will be the Daily Wail, who may be deprived of their regular "Here's a refugee with six children our researches have found, and who we've conned into saying, Yes, he would like a bigger house."

40% of households in Central London (Kensington, for example?) are on Housing Benefit; 25% in Greater London.

Landlords in London are going to get slaughtered by the changes in Local Housing Allowance.

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forgive me but can someone explain this 50th to 30th percentile? What does the percentile actually mean?

If you take all of the rental properties in an area and line them up in order of price, then the 50th percentile is the halfway point - ie where 50% of the properties are cheaper and 50% are dearer. The 30th percentile is the price where 30% are cheaper and 70% more expensive.

It's a fairer way of calculating "averages" than what most people use (add up all the prices and divide by the number of properties) because it is not distorted so much by a small number of properties much more expensive than the rest.

So the 30th percentile will be a cheaper property than the mid-way ("average") property. How close the 30th and 50th percentiles are depends on the range of rents in an area - if most places are at pretty much the same rent then the 30th and 50th percentiles will be close; if there is a wider distribution then the 30th percentile will be a lot cheaper than the 50th.

Essentially this is saying that HB claimants can pick only from the cheapest third of the market.

Why this is a big deal is that in theory it brings downward pressure on all rents. By forcing HB claimants into the bottom third of the market (from Oct 2011) it brings down the average for the whole market, thereby forcing a further reduction in HB allowances (as these are based on the local average), bringing the local average down again etc etc - a spiral of downward pressure on all rents.

Edit to add: the current policy was to set HB at the 50th percentile, which was seen as inflationary.

Edited by RentingForever

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forgive me but can someone explain this 50th to 30th percentile? What does the percentile actually mean?

Say there are 10 rental properties on the market of the same type (below in rank order, from sh1thole to penthouse) As there are 10 properties each represents 10%. The first property is the bottom 10th percentile, the first 2 properties represent the bottom 20th percentile etc.

100 pw 10th percentile

125 pw 20th percentile

175 pw 30th percentile

250 pw 40th percentile

350 pw 50th percentile

475 pw 60th percentile

625 pw 70th percentile

800 pw 80th percentile

1000 pw 90th percentile

1225 pw 100th percentile

So in this example, the 50th percentile calculation is 350pw, but if the distribution remains unchanged, the lha will now look at the 30th percentile for claculation of HB (reducing from 350pw to 175 pw). This is extremem distribution but you can imagine 10-20% coming off the lha calcualtion. I will lok for distributions later.

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So in this example, the 50th percentile calculation is 350pw, but if the distribution remains unchanged, the lha will now look at the 30th percentile for claculation of HB (reducing from 350pw to 175 pw). This is extremem distribution but you can imagine 10-20% coming off the lha calcualtion. I will lok for distributions later.

well the £1.8bn cut is a saving of 20% on private sector HB, so 20% rent reduction on average must be the target

Edited by oldsport

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40% of households in Central London (Kensington, for example?) are on Housing Benefit; 25% in Greater London.

Landlords in London are going to get slaughtered by the changes in Local Housing Allowance.

If that is true, then even in Kensington most people are scroungers. Shocking if you think about it, no wonder we're going bankrupt.

Instead of austerity we have more handouts for greedy parasite pensioners, huge public sector salaries locked in for two more years, and even an increase in benefits for the workshy. Insane?

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I was thinking, will these new housing association benefits change to existing benefactors of will it only apply to those who applying from here in.

I really cant see these changes working in the real world for existing benefactors.

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I was thinking, will these new housing association benefits change to existing benefactors of will it only apply to those who applying from here in.

I really cant see these changes working in the real world for existing benefactors.

The way it works (correct me if I'm wrong, anyone who knows better) is that you make a Housing Benefit claim, then the local Council determines how much of the LHA you're entitled to, based on the value of the LHA in the month in which you made the claim. That award then stays in place for (typically) one year.

When the new regulations come into force, the new LHA will determine how much a claimant gets; but when that takes effect for a given person will depend upon when they actually make/renew their Housing Benefit claim. Technically, I believe that if you successfully claimed on the day before the new regulations went live, you'd still get a year's award based on the LHA value on the day when you made that claim.

Edited: To back this up, have a look at how much the Government reckon they'll save as a direct result of this measure.

2011-12 65m

2012-13 365m

2013-14 415m

2014-15 425m

That is a stratospheric rise after 2011-12.

Just for fun, think of it this way: each figure represents a sum that will no longer be feeding directly into propping up the housing market.

Edited by Dingleberry

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I was thinking, will these new housing association benefits change to existing benefactors of will it only apply to those who applying from here in.

I really cant see these changes working in the real world for existing benefactors.

often when there's a change in benefits they give "transitional protection" for exisiting claimants to make sure they don't lose out

I'm pretty sure that on the last couple of occasions they've made a big change to housing benefits there was this sort of protection

we probably won't know any more now until we see draft regulations (I'm presuming this change doesn't need a Act of Parliament)

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I just spotted this in the small-print:

"The Government will introduce a package of reforms to Housing Benefit from April 2011 onwards. This includes changing the percentile of market rents used to calculate Local Housing Allowance rates, and uprating these rates by CPI from 2013-14"

So the 30-percentile calculation only applies for a couple of years, and then it's CPI from 2013 on. A CPI increase regardless of what the rental market is doing. In an environment where rents are decreasing it could lead to the HB allowances creeping back up to the 50th percentile or, theoretically, above!

Crazy!

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If you take all of the rental properties in an area and line them up in order of price, then the 50th percentile is the halfway point - ie where 50% of the properties are cheaper and 50% are dearer. The 30th percentile is the price where 30% are cheaper and 70% more expensive.

It's a fairer way of calculating "averages" than what most people use (add up all the prices and divide by the number of properties) because it is not distorted so much by a small number of properties much more expensive than the rest.

So the 30th percentile will be a cheaper property than the mid-way ("average") property. How close the 30th and 50th percentiles are depends on the range of rents in an area - if most places are at pretty much the same rent then the 30th and 50th percentiles will be close; if there is a wider distribution then the 30th percentile will be a lot cheaper than the 50th.

Essentially this is saying that HB claimants can pick only from the cheapest third of the market.

Why this is a big deal is that in theory it brings downward pressure on all rents. By forcing HB claimants into the bottom third of the market (from Oct 2011) it brings down the average for the whole market, thereby forcing a further reduction in HB allowances (as these are based on the local average), bringing the local average down again etc etc - a spiral of downward pressure on all rents.

Edit to add: the current policy was to set HB at the 50th percentile, which was seen as inflationary.

Ok, very interesting, what eventually will put a floor under rents? and do you think some BTL`ers will be thinking "f*uck this, I`m getting out"?

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Ok, very interesting, what eventually will put a floor under rents? and do you think some BTL`ers will be thinking "f*uck this, I`m getting out"?

why would they, they have nothing to worry about

From another post

"The Government will introduce a package of reforms to Housing Benefit from April 2011 onwards. This includes changing the percentile of market rents used to calculate Local Housing Allowance rates, and uprating these rates by CPI from 2013-14"

This whole change to the housing benefit is non news in the short term

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why would they, they have nothing to worry about

From another post

"The Government will introduce a package of reforms to Housing Benefit from April 2011 onwards. This includes changing the percentile of market rents used to calculate Local Housing Allowance rates, and uprating these rates by CPI from 2013-14"

This whole change to the housing benefit is non news in the short term

Looks like a short shock to the system for two years, then guaranteed CPI indexation after.

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  • 189 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
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      • up 5%



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