Jump to content
House Price Crash Forum
Mega

Rent Cap Woes - Merged Threads

Recommended Posts

http://www.independent.co.uk/news/uk/politics/osbornes-cap-on-housing-benefits-will-drive-poor-families-into-ghettos-2024372.html

Osborne's cap on housing benefits will 'drive poor families into ghettos'

Coalition's welfare cuts will combine with joblessness and home repossessions to leave thousands homeless, charities predict

Thousands of people will be made homeless as public spending is slashed because of a dangerous combination of higher unemployment, increasing repossessions and cuts to housing benefit, housing experts have warned.

The retired, disabled people, carers and working families will be hardest hit and charities predict it will trigger the steepest rise in families living in unsuitable accommodation and individuals sleeping rough since the 1980s.

Those in London will be the worst affected, forcing an exodus of poorer people from the centre to outer boroughs, and adding to the financial pressures on local authorities, which are obliged to find homes, school places and social care for the newly arrived families.

The homeless charity, Shelter, said that some households in London currently receiving housing benefit will have to find a shortfall of up to £1,548 a month to meet their housing costs. The result, say opposition MPs, will be "social cleansing" of poorer tenants from richer areas.

Campbell Robb, the chief executive of Shelter, said: "The consequences have not been thought through by the Government. If this support is ripped out suddenly from under their feet, it will push many households over the edge, triggering a spiral of debt, eviction and homelessness."

There are 4.72 million housing-benefit claimants and 1 million of those receive Local Housing Allowance, the housing benefit for tenants in the private rental sector. In his Budget, the Chancellor imposed caps on housing benefit of £400 a week for a four-bedroom property and £250 a week for a two-bedroom home. Future increases will be linked to retail-price inflation rather than actual rents, which will further erode the value of the benefit.

Since 2000, average rents in London have increased by 65 per cent while the CPI has increased by just 17 per cent. There will also be a 10 per cent cut in housing benefit for those unemployed for more than a year, criticised by the independent Institute for Fiscal Studies as a blunt and "punitive" instrument to encourage people to find work.

Seyi Obakin, the chief executive of Centrepoint said: "The young people Centrepoint supports, who often present complex needs including mental health issues, are already disadvantaged when competing for limited jobs available in the current climate. If these young people have 10 per cent of their housing benefit cut, they will struggle to pay their rent, and could get into arrears and could seriously risk becoming homeless again."

But the pressure on local authorities and the housing-benefit budget could easily intensify if the economy relapses into a double-dip recession. Last week, the IMF radically downgraded its economic forecast for the UK, and the prospect of a weak "jobless recovery" seems certain to push many more families into arrears on their mortgages, or unable to pay the rent.

Some will also find re-financing their home loans much more difficult if house prices continue to slide, thereby automatically pushing more borrowers into negative equity. The Halifax recently confirmed that house prices fell by 0.6 per cent during June, the third month in a row.

Sue Witherspoon, the head of housing at Havering Council, in outer east London, said several authorities in the capital have no private rents below the cap: "The implication for a borough like Havering is we will have a flood of people moving in because of the lower costs. It will lead to a ghettoisation of benefit claimants.' Simon Harris, the chief executive of Stoke Citizens Advice Bureau in Staffordshire, said that the reduction in allowance for long-term jobseekers will "plunge people further into rent arrears".

Mortgage lenders also fear that a review of support for those in arrears announced by Eric Pickles, the Secretary of State for Communities and Local Government, will drive repossessions higher and end the culture of "forbearance" by banks and building societies. Tens of thousands of repossessed homeowners would exacerbate the acute pressures already piling on local authorities. Some 47,000 homes were taken back by lenders in 2009.

Michael Coogan, the director general of the Council of Mortgage Lenders (CML), said: "While low interest rates, lower unemployment than expected, lender forbearance and state support have so far combined to cushion the number of households unable to keep their homes, it is by no means a given that these relatively benign influences will remain indefinitely.

"There is a risk that the relatively muted scale of difficulties to date will come under significant pressure under a less benign set of economic circumstances," he added.

The withdrawal of £185bn of official support to bank lending via the Bank of England's Special Liquidity Scheme, for example, will add to the banks' problems in funding new mortgages to underpin the market, and in exercising patience with those unable to keep up their repayments.

Some fear a return to almost Dickensian conditions in London in particular. James Murray, a cabinet member for housing at Islington Council, said: "In Islington we have thousands of families on the waiting list for housing, many living in desperate overcrowding. It is not rare to see seven or eight people in a two-bed flat – with the children often unable to do their homework, unable to have any privacy, and with the whole family suffering under the stress.

"A cap on housing benefit could put a third of Islington's private-sector tenants who are on housing benefit at risk of eviction," he added. "This will only increase the pressure on social housing, and so more than ever we desperately need more investment in social rented homes. "

Karen Buck, MP for Westminster North, said the changes would result in a mass "exodus" of families from districts such as Westminster, Chelsea, Fulham and Islington.

"For more than 400 years, central London has been socially mixed and this Government now wants to radically end that," she said. "This would lead to social cleansing on an unprecedented scale, with poorer people shipped out in large numbers to the outskirts. It is as if Dame Shirley Porter had been put in charge of housing policy, but this time on a national level. The massive increase in rough sleeping in the early 1990s was directly linked to changes in entitlement and the inability to get deposits and rent in advance paid through benefits".

And Colin Glover, the chief executive of The Connection at St Martin's, said: "In central London, there is the real possibility of people having to leave existing accommodation, some may be moved into more expensive bed and breakfast.

"For single people some may, particularly as a result of the changes to invalidity benefits, be spurred to look for work," he added. "For others, the additional problems may lead to a return to the streets. Like many changes of this sort, the models may work for the majority, but it is the vulnerable minority who can end up suffering most."

Research by Lily Thomas

Terry Lane: 'It would be easier to get housing if I didn't work'

The 49-year-old and his wife, Teresa, are two "ordinary working people" who will lose out under proposed cuts to housing benefit and allowances.

The Government's promise to cap housing payments at £250 for a one-bedroom property, £290 for two, £340 for three, and £400 for a four-bedroom property could make many properties unaffordable, especially for people in areas such as Inner London.

Rates will also be based on the 30th percentile of rents of the local area, rather than the 50th at present. Campaigners say that this will affect people across the country and result in more families living in sub-standard and overcrowded accommodation.

But Terry and Teresa Lane have already lost their home in Westminster after running up nearly £20,000 in rent arrears because their housing benefit did not cover the full cost of their rent.

The family had waited for seven years for a council house but there were none available. Instead Terry, Teresa, their son Joshua, now 22, and daughter Graciela, now 23, were temporarily housed and spent the last four years in a three-bedroom, ex-council flat owned by a private landlord. They were charged £1,580 a month and received around £900 in housing benefit but struggled to find the rest of the rent from their wages.

Mr Lane earns around £18,500 as a document controller for an architects' firm, his wife earns around £5,000 as a teaching assistant. Joshua is an undergraduate at a London university while Graciela left home because of the stress.

He said: "That is why we ended up in arrears. We just couldn't afford to find that kind of rent from our wages. I have been waiting seven years to get permanently rehoused by Westminster. An estate agent would have said our flat was in St John's Wood, which sounds posh, but it was actually in Lisson Grove in one of the most deprived wards. But private landlords are still charging ludicrous rents.

"There is going to be a new breed of poverty. It will be people who are working who get caught by the system. If the new limits on housing benefit are not adequate for living in central London, then more people like us are going to be left to struggle to try and make up the difference from their wages.

"These changes will make things more difficult for people who work – if we didn't work I'm sure benefits would cover the lot. There is not enough public housing stock so people are forced into the private sector. The Government needs to invest in public housing before they review housing benefit.

"This has had a terrible effect on my family. My son has been badly affected by the worry of it all. He has lost weight and has dark circles under his eyes. My daughter left home because of it.

"Because we are in rent arrears we have now lost all our rights to be rehoused by the council so will now have to look through the private sector. We'd be looking for a two-bedroom property now my daughter's left home so we'd be affected by the new cap of £290 a week. I think we will struggle to find somewhere at that price. We have looked further out of London but it's a difficult balance – we both work in central Westminster so you have to balance the cost of the fares."

Campbell Robb, the chief executive of Shelter, said: "These cuts are a devastating blow for the most vulnerable people in our society, and will push many over the edge into a spiral of debt, rent arrears, eviction and homelessness.

"The underlying issue which this Budget has failed to address is the critical shortage of affordable housing, which means more and more people are being housed in the private rented sector where rents are almost double those in social housing. If we are to reduce the housing benefit bill in the long term we must continue to build more affordable housing."

Share this post


Link to post
Share on other sites

I'm pretty sure the houses will still be there.

The problem is easy to solve.

Start getting all the landlords who have empty houses, tie their hands and feet, and drop them off a few miles from shore.

We don't have a lack of houses, it's just they're all owned by BTLers and speculators. If we get rid of them, the problem goes away.

Edited by TaxAbuserOfTheWeek

Share this post


Link to post
Share on other sites

drive them into WHAT ghettos ?

even a ghetto hole rents at least 500pcm.

A new cardboard city? In a different place of course, they did away with the old one and built an IMAX cinema over it.

Edited by Britney's Piers

Share this post


Link to post
Share on other sites

The homeless charity, Shelter, said that some households in London currently receiving housing benefit will have to find a shortfall of up to £1,548 a month to meet their housing costs

£1,548 a month, if only landlords had a charity that paid out every month no matter what the rent was.

Share this post


Link to post
Share on other sites

So all these parasitic landlords that have been living off the largesse of the state for years, are going to prefer £0/pcm, over whatever new rates are available? Following the logic in this article if said landlords doubled the rents they charge, the state would be morally obligated to meet their demands, lest people be made homeless. No wonder we're in such a mess.

Edited by Boom Boom

Share this post


Link to post
Share on other sites
Some fear a return to almost Dickensian conditions in London in particular. James Murray, a cabinet member for housing at Islington Council, said: "In Islington we have thousands of families on the waiting list for housing, many living in desperate overcrowding. It is not rare to see seven or eight people in a two-bed flat – with the children often unable to do their homework, unable to have any privacy, and with the whole family suffering under the stress.

That is what happens when a nation and city won't allow building of new houses.. yet has significant population growth.

If we have 22 million housing units, but need 25 million units, raising the housing benefit rate will not change overcrowding. As people on hpcforum have pointed out time and again all it does is transfer money from taxpayers to landlords.

Only when we are willing to 'build baby, build'.. will we solve the housing problems. It would also create hundreds of thousands of good jobs if we simply allowed massive new developments.

Share this post


Link to post
Share on other sites
Sue Witherspoon, the head of housing at Havering Council, in outer east London, said several authorities in the capital have no private rents below the cap: "The implication for a borough like Havering is we will have a flood of people moving in because of the lower costs. It will lead to a ghettoisation of benefit claimants.'

Central London authorities have always been placing homeless families in the suburbs as it made huge financial sense to do so. Until this January a council like Westminster received a subsidy from DWP based on local rents plus a whopping management fee but then shifted the homeless to places like Havering with lower rents and pocketed the difference. Fact is no council wants these people who are just a drain on local services. Quite right as well as most of them are homeless because they see it as a route into social housing.

James Murray, a cabinet member for housing at Islington Council, said: "In Islington we have thousands of families on the waiting list for housing, many living in desperate overcrowding. It is not rare to see seven or eight people in a two-bed flat – with the children often unable to do their homework, unable to have any privacy, and with the whole family suffering under the stress.

Another local authority scam - waiting lists. Islington will let people stay on their housing register for years on end even if they have no evidence of housing need. They let the numbers pile up and then use it as a phoney stat to try and bilk money out of central government. As for overcrowding, perhaps they should take a look at how many single elderly people are occupying 3 and 4 bed council properties before bleating on about the hardships caused by overcrowding.

Share this post


Link to post
Share on other sites

The unemployed have no need to live in London, go and live somewhere cheaper.

But that could easily reduce prices in London, but increase them everywhere else. I certainly dont pay £290 a week for my 2 bedroom!!!!!

London landlords will have to consider, do they want to make plenty of money, rather than lots of money? Depending on when they bought the house, size of mortgage etc Some will no doubt decide to keep the rent the same and get in private tenants.

Share this post


Link to post
Share on other sites

I'm pretty sure the houses will still be there.

The problem is easy to solve.

Start getting all the landlords who have empty houses, tie their hands and feet, and drop them off a few miles from shore.

We don't have a lack of houses, it's just they're all owned by BTLers and speculators. If we get rid of them, the problem goes away.

All what you talk about though will never happen under Tory rule. If you have ever visited America you

will realise what these crazy Tory plans will do

to the uk. We will end up with every city having a ghetto, homeless charities will be overwhelmed and the end result

will be wages for the poorest being driven even lower.

Stabilising fiscal environments won't help those on the breadline but the torys don't give a damn about a fair society. The private sector is retracting even faster than last year, living costs are rising yet the government still thinks the private is waiting in the winds to employ the 5 million about to lose their jobs.

Share this post


Link to post
Share on other sites

The unemployed have no need to live in London, go and live somewhere cheaper.

But that could easily reduce prices in London, but increase them everywhere else. I certainly dont pay £290 a week for my 2 bedroom!!!!!

London landlords will have to consider, do they want to make plenty of money, rather than lots of money? Depending on when they bought the house, size of mortgage etc Some will no doubt decide to keep the rent the same and get in private tenants.

I'm not sure reducing housing benefit will have impact on rents. I used to do a lot of work for landlords and most of them have waiting lists full of tenants. If they can't pay their rent they will in most cases be forced to leave.

Share this post


Link to post
Share on other sites

All what you talk about though will never happen under Tory rule. If you have ever visited America you

will realise what these crazy Tory plans will do

to the uk. We will end up with every city having a ghetto, homeless charities will be overwhelmed and the end result

will be wages for the poorest being driven even lower.

Stabilising fiscal environments won't help those on the breadline but the torys don't give a damn about a fair society. The private sector is retracting even faster than last year, living costs are rising yet the government still thinks the private is waiting in the winds to employ the 5 million about to lose their jobs.

Epic fail

This affects poor peoples' wages (the ones who work) the opposite way. Their housing costs go down so their disposable income goes up. People I know with low wages in London are delighted by the move.

It's just parasitic landlords that get hammered. Are you one of them? You're certainly no friend of the working poor.

Share this post


Link to post
Share on other sites

Central London authorities have always been placing homeless families in the suburbs as it made huge financial sense to do so. Until this January a council like Westminster received a subsidy from DWP based on local rents plus a whopping management fee but then shifted the homeless to places like Havering with lower rents and pocketed the difference. Fact is no council wants these people who are just a drain on local services. Quite right as well as most of them are homeless because they see it as a route into social housing.

Another local authority scam - waiting lists. Islington will let people stay on their housing register for years on end even if they have no evidence of housing need. They let the numbers pile up and then use it as a phoney stat to try and bilk money out of central government. As for overcrowding, perhaps they should take a look at how many single elderly people are occupying 3 and 4 bed council properties before bleating on about the hardships caused by overcrowding.

once you are in a council house or housing association home you are legally a protected tenant. You can't be removed unless you get very behind in your rent. You may well say change the tenancies for new contracts to fixed term let's but such a policy will cost us even more money.

People who rent social housing often spend a lot on improvements because they know they will be there for as long as they want. Short term tenancies will stop this and increase the maintenance costs for the tax payer.

Share this post


Link to post
Share on other sites

Epic fail

This affects poor peoples' wages (the ones who work) the opposite way. Their housing costs go down so their disposable income goes up. People I know with low wages in London are delighted by the move.

It's just parasitic landlords that get hammered. Are you one of them? You're certainly no friend of the working poor.

But it won't reduce rents there is no evidence to support this at all. In particular London where there is a massive shortage of housing.

Share this post


Link to post
Share on other sites

dont like to hear about anyone becoming homless,

but if it means helping HPC well keep it coming, more cuts soon :)

And, contrary to popular media belief, having your home repo'd does not actually mean you're homeless-it means you have to (whisper the word) rent like 40% of the population do anyway.

Share this post


Link to post
Share on other sites

I'm pretty sure the houses will still be there.

The problem is easy to solve.

Start getting all the landlords who have empty houses, tie their hands and feet, and drop them off a few miles from shore.

We don't have a lack of houses, it's just they're all owned by BTLers and speculators. If we get rid of them, the problem goes away.

++1

Finally rents will have to come down no matter what or the landlord will have no repayment :)

Share this post


Link to post
Share on other sites

++1

Finally rents will have to come down no matter what or the landlord will have no repayment :)

That easy, wake up it won't happen that way. They will get evicted and they will rent to a working family.

Share this post


Link to post
Share on other sites

But it won't reduce rents there is no evidence to support this at all. In particular London where there is a massive shortage of housing.

Less money = lower prices. The desire for high rents may be strong amongst landlords but it means zip if renters don't have money to satisfy that desire. Similar to house prices - many believed this 'massive shortage of housing' would stop a hpc - it turned out that house prices were linked to availability of credit, not population demographics.

Share this post


Link to post
Share on other sites

Look guys how many times have we heard that the benefits system will change re housing from differing politicians, yet we still all read virtually daily of Somalians, illegals, large uk benefit manufactured family's dependent on the state, enjoying lifestyles in accommodation we could only dream about, do you really think anything will really change I dont, I have head it all before they may take some benefits away with one hand but give it back with the other. :angry:

Share this post


Link to post
Share on other sites

Stabilising fiscal environments won't help those on the breadline but the torys don't give a damn about a fair society. And New Labour did? How is watching millions of people putting their heads into debt nooses and allowing bankers to pay themselves billions in bonuses in the process creating a fair society? The private sector is retracting even faster than last year, living costs are rising yet the government still thinks the private is waiting in the winds to employ the 5 million about to lose their jobs.

What's your solution? Borrow £155 billion every year to keep paying for everything? To keep paying private landlords fortunes?

You do realise that the very people you help by paying private landlords high rents are the same people who will be paying the interest on the debt, and the debt repayments, for the next 50 years.

Share this post


Link to post
Share on other sites

Look guys how many times have we heard that the benefits system will change re housing from differing politicians, yet we still all read virtually daily of Somalians, illegals, large uk benefit manufactured family's dependent on the state, enjoying lifestyles in accommodation we could only dream about, do you really think anything will really change I dont, I have head it all before they may take some benefits away with one hand but give it back with the other. mad.gif

Normally, I would agree with you. But, this time, the money really has run out and this new government seems determined to do something about it.

If I were them I would halve the rents payable to private landlords and, if they don't like it, purchase the property for them on a compulsory basis - at the price they paid for it plus inflation as measured by CPI.

It really is time to get the parasites off society's back.

Share this post


Link to post
Share on other sites

That easy, wake up it won't happen that way. They will get evicted and they will rent to a working family.

And the house that working family would have rented otherwise-who will rent that? Btw-eviction isn't straightforward.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 261 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.