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Private Landlords To 'slash Rents To Keep Tenants Because Of Housing Benefit Cuts'

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More than one million households who receive housing benefit will have to find extra cash to pay their rent to private landlords from next year.

If the cannot find the money they will evicted or forced to move.

Chris Norris, policy manager for the National Landlords Association, said: “Landlords will have to look at their profit and loss and decide how much they can afford to cut their rents by.

“If they are not going to do that, they will have to seek non-housing benefit tenants or sell up.”

Figures from the Valuation Office Agency, obtained by campaign group Shelter, show that households in area in the country will be affected by the cuts, which will be introduced in two stages, in April and October next year.

The shortfalls range from thousands of pounds a month for a large home in London to as little as £5.60 a month for a two bedroom home in the north west of England.

The biggest shortfalls will be felt in smarter areas of London, Cambridge, Bath, Guildford and Exeter, where private rents are more expensive.

In London a family in a five bedroom home could have to find as much as an extra £6,933 a month, or find somewhere cheaper to rent.

In one fifth of the country, a three bedroom household would face a shortfall of £65 a month from the cuts, and as much as £150 a month in expensive areas such as Guildford, the most affected area outside London.

People living in a four bedroom property in half of England’s villages, towns and cities will have to find an additional £100 a month to pay their rent.

Campbell Robb, chief executive of Shelter, said the changes would cause “significant social and personal upheaval”, create “huge clusters of poverty and inequality, creating an even bigger gap between rich and poor”.

He said: “The increased rental costs people will have to now find each month will force the poorest and most vulnerable in our society to leave the homes and communities and migrate to areas with the cheapest housing.

“Many people will be forced to cut back on essentials like food and electricity, or take on extra debt, just to make ends meet.

“Despite trying everything they can to stay afloat, some will be pushed over the edge into a spiral of debt, eviction and homelessness.”

Downing Street advisers are known privately to be very worried about the political damage of families being made homeless because of the cuts

Coalition ministers are already trying to prepare for the political damage of families being forcibly evicted because they cannot the rent by trebling the value of a special hardship fund from £20million to £60million.

Steve Webb, a Liberal Democrat Work and Pensions minister, has defended the cuts insisting they were “fair” to people on low salaries.

He said: “The state is paying someone who is unemployed to live in a better house than someone who takes a low paid job. You can see the unfairness of that.”

http://www.telegraph.co.uk/property/7869171/Private-landlords-to-slash-rents-to-keep-tenants-because-of-housing-benefit-cuts.html

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Downing Street advisers are known privately to be very worried about the political damage of families being made homeless because of the cuts

So they're not worried by families being made homeless, only the political damage that results from that.

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He said: “The increased rental costs people will have to now find each month will force the poorest and most vulnerable in our society to leave the homes and communities and migrate to areas with the cheapest housing.

Well tough f*cking sh1t, welcome to the same world the rest of us have to live in. If people end up homeless then yes, that's bad, but if the worst that happens to them is they have to go and live somewhere cheaper then please spare the violins. No-one had the right to live exactly where they choose and have the rest of us pick up the tab coincidentally helping price ourselves out of those very same areas in the process. If you can't afford the rent in Kensington, then move to Canning Town and be grateful you're not living in a cardboard box under the embankment.

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So they're not worried by families being made homeless, only the political damage that results from that.

The next thing HAS to be some sort of tax on empty property..... Oh happy days!

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Do you think the public might actually figure out what was going on all these years now?

Taxpayer subsidy to landlords over decades. The ponzi scheme is finally cracking, and nothing can stop it now! Yes!!

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If I can't afford my rent, then I end up homeless. Why should benefits claimants be protected? Housing benefits have bid up rents for everyone else anyway, when they should be falling!!

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A million households is not trivial, it's about 4% of the UK total. I wonder what practical effect this will have across the country?

Presumably it will liberate some property in more afluent areas; but correspondingly increase demand and rents in less desirable areas as displaced tenants relocate to cheaper postcodes.

I'd further guess that the law of unintended consequences says it might worsen the long-term unemployment figures, as people get shunted into unemployment blackspots.

What a f@cking mess.

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A million households is not trivial, it's about 4% of the UK total. I wonder what practical effect this will have across the country?

Presumably it will liberate some property in more afluent areas; but correspondingly increase demand and rents in less desirable areas as displaced tenants relocate to cheaper postcodes.

I'd further guess that the law of unintended consequences says it might worsen the long-term unemployment figures, as people get shunted into unemployment blackspots.

What a f@cking mess.

Overall, I doubt it will actually have much impact. The thing no-one seems to be pointing out is that all those landlords are currently paying the lowest mortgage interest costs in living memory and can, for the most part, quite easily afford to take what is, a few areas aside, a small percentage hit to their rents. Maybe this is the point where borrowers have to start to share the bailout pain with us savers who are currently being royally shafted by those same low rates couple with high inflation.

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Overall, I doubt it will actually have much impact. The thing no-one seems to be pointing out is that all those landlords are currently paying the lowest mortgage interest costs in living memory and can, for the most part, quite easily afford to take what is, a few areas aside, a small percentage hit to their rents. Maybe this is the point where borrowers have to start to share the bailout pain with us savers who are currently being royally shafted by those same low rates couple with high inflation.

Agreed, and even the new levels are quite generous. £280 pw for one bedroom home. You can get a place in London for that, and where I live it would be luxury penthouse pad!

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If the govt is paying less rent for properties, potential landlords are only going to pay what is going to make the yield they need (or not buy at all).. that can only be good news for HPCers

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Agreed, and even the new levels are quite generous. £280 pw for one bedroom home. You can get a place in London for that, and where I live it would be luxury penthouse pad!

That's not the rate for everywhere. It is a nationwide maximum. Most LAs have a lower rate.

tim

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Well tough f*cking sh1t, welcome to the same world the rest of us have to live in. If people end up homeless then yes, that's bad, but if the worst that happens to them is they have to go and live somewhere cheaper then please spare the violins. No-one had the right to live exactly where they choose and have the rest of us pick up the tab coincidentally helping price ourselves out of those very same areas in the process. If you can't afford the rent in Kensington, then move to Canning Town and be grateful you're not living in a cardboard box under the embankment.

thanks, you saved me the bother of saying just that

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He said: “The state is paying someone who is unemployed to live in a better house than someone who takes a low paid job. You can see the unfairness of that.”

...this statement sums up the benefit system in this country and the fact the mist has lifted from this brainless Nuliebour ethos 'Gordie Broon and all that' ...we will be taking the first steps towards a painful recovery...the alernative would have been total destruction ...but that was NuLiebour's delivery result.... hopefully.. not objective.... :rolleyes:

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If the govt is paying less rent for properties, potential landlords are only going to pay what is going to make the yield they need (or not buy at all).. that can only be good news for HPCers

Yes, absolutely fantastic for us HPCers.

The effect of this is huge.

Generous Housing allowance

leads to

Artificially Increased number of "high bidders" in the rental market

which leads to

Landlords being able to charge, at the very minimum, the Housing Allowance amount per month.

consequently

No one can rent anywhere for less than the Housing Allowance.

And as you say, BTLs are now going to have to factor in the drop in yield when thinking of buying more property. Also the calculation of owner occupier homebuyers will be further weighted toward the "cheapness" of renting when compared to likely monthly mortgage interest payments.

It's a major nail in the house price boom coffin, and there's no way it can be avoided, because the Government's last credit card is well and truly maxed out.

Edited by worst time buyer

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At some point the penny is going to drop just who benefits from a public sector deficit. i.e. where the surplus is.

I suspect it may be some time before the lightbulb goes on in some heads on here though (no names, no packdrill).

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What the hell? Typical torygraph spin rents will be cut so all the poor hardworking families will lose out. The only people who are losing out here is the BTL landlords receiving lower yields.

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Its all coming on top, "DC" & "Ozzy" are going move with speed & care in think the passangers are about to suss the ship IS going to sink!

mike

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At some point the penny is going to drop just who benefits from a public sector deficit. i.e. where the surplus is.

Indeed, but I suspect that the obscenity of it all is such that most people would refuse to see it no matter what.

The following quote from the article is a priceless misconception:

Campbell Robb, chief executive of Shelter, said the changes would cause “significant social and personal upheaval”, create “huge clusters of poverty and inequality, creating an even bigger gap between rich and poor”.

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Guest BetterOffOnBenefits

If I can't afford my rent, then I end up homeless. Why should benefits claimants be protected? Housing benefits have bid up rents for everyone else anyway, when they should be falling!!

I feel the same about homeowners. The mere thought of repossession represents the most horrid situation imaginable in life.

However, the continual moving on (6 mths) of a priced out FTB, who hasn't even defaulted on rent - just on the whim of a private landlord, is fair play and nobody in this land gives a **** about it.

If you rent from the private sector with EARNED income, you are a 3rd class turd.

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Guest BetterOffOnBenefits

Thick as **** comment

Chris Norris, policy manager for the National Landlords Association, said: “Landlords will have to look at their profit and loss and decide how much they can afford to cut their rents by. “If they are not going to do that, they will have to seek non-housing benefit tenants or sell up.”

Durrrrrrr. The non-housing benefits tenants have less disposable (for housing) than the benefits lot.

So Landlords will decide how much they can afford to cut their rents by, or sell up

What?? You mean they will have to price according to what the "market will stand"? rather than rely on the huge govt safety net/guarantee?

WELCOME TO THE WORLD OF BUSINESS.

Oh sorry, I forgot, I'm talking about BTL's, they probably can't even spell the word.

Edited by BetterOffOnBenefits

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So they're not worried by families being made homeless, only the political damage that results from that.

Maybe the reduced court system won't be able to handle the evictions - or maybe they'll instruct judges not to evict where LHA isn't meeting the full rent?

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  • 145 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
      • up 2.5%
      • up 5%



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