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Tired of Waiting

Reductions In Lha - Government Estimates For 30Th Percentile

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The table below shows the:

PUBLISHED LHA RATES (Month Year) compared to SHADOW 30th PERCENTILE LHA (Month Year)

highlighting the rates that would also be affected by the capping to be introduced from April 2011

"Budget Changes to Local Housing Allowance (LHA)"

http://www.voa.gov.uk/LHADirect/Documents/LHA_percentile_rates_Oct_2010.html

I've copied the table from that site, pasted it in a spreadsheet, and if I didn't make any mistake, the national averages and changes are:

(BTW, it would be useful if someone could double check this though.)

(And I don't know how to paste or post a table properly in this forum.)

Weekly Rents, National Average

1 ROOM__1 BED__2 BED__3 BED__4 BED

£68.61___£113.35__£141.18__£170.05__£228.49 = LHA OCTOBER 2010

£63.04___£105.62__£131.37__£156.06__£203.82 = LHA 30th PERCENTILE

-8.12%___-6.82%___-6.95%___-8.22%___-10.8% = Reduction

(Note: these are just simple averages, not weighted by city size. For local info see the original table.)

The source is this "VOA":

Valuation Office Agency (VOA)

The Valuation Office Agency (VOA) is an executive agency of HM Revenue & Customs (HMRC) with 85 offices spread

throughout England, Wales and Scotland employing around 4,300 people.

Our main functions are to :

* Compile and maintain the business rating and council tax valuation lists for England and Wales.

N.B. In Scotland council tax and business rates are dealt with by the Scottish Assessors

* Value property in England, Wales and Scotland for the purposes of taxes administered by the HM Revenue & Customs

* Provide statutory and non-statutory property valuation services in England, Wales and Scotland

* And give policy advice to Ministers on property valuation matters

(EDIT: Averages were calculated for 151 areas (lines 5 to 156 in my spreadsheet). Wrong! line 5 to 156 = 152 areas. Fixed now. :D )

Edited by Tired of Waiting

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I haven't double-checked your figures, but for a 2-bed house, going from ~£616pm to £573pm doesn't sound so bad. It's not something that's going to be a huge shock in the short term, at least. But it might make BLT'ers consider if they should cash in now without forcing them into outright bankruptcy.

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I haven't double-checked your figures, but for a 2-bed house, going from ~£616pm to £573pm doesn't sound so bad. It's not something that's going to be a huge shock in the short term, at least. But it might make BLT'ers consider if they should cash in now without forcing them into outright bankruptcy.

I agree, it looks sensible.

I think the plan is to reduce by this 30th percentile for 2 years, and then correct by inflation.

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"Budget Changes to Local Housing Allowance (LHA)"

http://www.voa.gov.u...s_Oct_2010.html

I've copied the table from that site, pasted it in a spreadsheet, and if I didn't make any mistake, the national averages and changes are:

(BTW, it would be useful if someone could double check this though.)

(And I don't know how to paste or post a table properly in this forum.)

Weekly rents:

1 ROOM__1 BED__2 BED__3 BED__4 BED

£69.06___£114.10__£142.12__£171.17__£230.01 = LHA OCTOBER 2010

£63.46___£106.32__£132.24__£157.10__£205.17 = LHA 30th PERCENTILE

-8.12%___-6.82%___-6.95%___-8.22%___-10.8% = Reduction

The source is this "VOA":

still too high for no reasons ..... 1000s of Britons worked, purchased and are happily living in mobile houses for much more less ... why unemployed should be treated better ????

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£573pcm is still more than a lot of working people can afford.if that's all the cuts are then it's a waste of time. (...)

Sorry, I meant the reductions looked sensible, considering they are the first year reduction (between -6.8% and -10.8%), and that they will be repeated again next year (30th percentile again).

I agree that rents are still too high.

Ideally I think they should re-evaluate the plan in 2 years. Perhaps we could have further reductions then.

HB has been propping the BTL/hosue price ponzi for years and it's a f****** disgrace.not as disgraceful as that utter tw1t simon hughes fretting about all the people on benfits who's lives are sh1t.well simon,you muppet,there are plenty of working people who's lives are sh1t because rents are too high.

was flicking through rightmove the other day and I saw a tiny one bed flat,full of baby stuff.had two cots in the bedroom photo(those f***** letting agetns don't miss a turn when it comes to invading people's privacy) as obviously the kid had outgrown the small one.obviously people who have a job struggling to raise a kid.makes me pewk when I hear these bleeidn heart guardian readers banging on about poverty from the plush leather chair that comes with their fancy public sector job that comes courtesy of the same people footing the bill for bailing the f***** banks out at the same time as they're footing the bill for the gvot debt and the public sector pension deficit.

+ 1

Edited by Tired of Waiting

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If the guiding rule is supposed to be you'll always be better off working then these are nowhere near low enough. At these rates a worker has to earn 12-13K of pre-tax income to compete with the work-shy for a three bedroom house. Doesn't leave much left over from an average wage to cover luxuries like food and energy, not to mention non-directionals like council tax which the other lot are probably getting for free too.

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Sorry, I meant the reductions looked sensible, considering they are the first year reduction (between -6.8% and -10.8%), and that they will repeated again next year (30th percentile again).

I agree that rents are still too high.

They need to reach the levels of council housing rents....

To raise the lower end of rents seems madness to me.

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Sorry, I meant the reductions looked sensible, considering they are the first year reduction (between -6.8% and -10.8%), and that they will be repeated again next year (30th percentile again).

I agree that rents are still too high.

Ideally I think they should re-evaluate the plan in 2 years. Perhaps we could have further reductions then.

+ 1

exactly , there should be a positive feedback effect where the rental price, and hence the 30th percentile, decrease year on year, this is just the start

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They need to reach the levels of council housing rents....

To raise the lower end of rents seems madness to me.

I agree that rents have to go down. And I understand that it has to be gradual. I think the proposed speed is reasonable.

EDIT: Unless that Simon Hughes b@stard manages to block or weaken this HB reform. We have a thread about that: http://www.housepricecrash.co.uk/forum/index.php?showtopic=153410&st=0&p=2760241entry2760241

Edited by Tired of Waiting

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I agree that rents have to go down. And I understand that it has to be gradual. I think the proposed speed is reasonable.

EDIT: Unless that Simon Hughes b@stard manages to block or weaken this HB reform. We have a thread about that: http://www.housepricecrash.co.uk/forum/index.php?showtopic=153410&st=0&p=2760241entry2760241

Indeed. Which is why I started the thread saying to email him about it :)

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"Budget Changes to Local Housing Allowance (LHA)"

http://www.voa.gov.uk/LHADirect/Documents/LHA_percentile_rates_Oct_2010.html

I've copied the table from that site, pasted it in a spreadsheet, and if I didn't make any mistake, the national averages and changes are:

(BTW, it would be useful if someone could double check this though.)

(And I don't know how to paste or post a table properly in this forum.)

Weekly rents:

1 ROOM__1 BED__2 BED__3 BED__4 BED

£69.06___£114.10__£142.12__£171.17__£230.01 = LHA OCTOBER 2010

£63.46___£106.32__£132.24__£157.10__£205.17 = LHA 30th PERCENTILE

-8.12%___-6.82%___-6.95%___-8.22%___-10.8% = Reduction

(Note: these are just simple averages, not weighted by city size. For local info see the original table.)

The source is this "VOA":

I already did this here:

http://www.housepricecrash.co.uk/forum/index.php?showtopic=153410&st=60&p=2760977entry2760977

But I got different figures to you.

tim

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£573pcm is still more than a lot of working people can afford.if that's all the cuts are then it's a waste of time.H

It may be more than they want to afford but it demonstrably isn't more than they can afford.

For most regions of the UK that is a low rent and as most working people are actually housed somewhere we can assume that (those that are renting) are actually paying a rent in that region.

tim

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They need to reach the levels of council housing rents....

To raise the lower end of rents seems madness to me.

How does that help if LLs wont reduce the rents to that level? Something which I have said more than once I don't believe will happen.

There is just no market incentive to provide properties offering yields of 2% when let to the least reliable tenants and private LLs wont do so.

tim

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How does that help if LLs wont reduce the rents to that level? Something which I have said more than once I don't believe will happen.

There is just no market incentive to provide properties offering yields of 2% when let to the least reliable tenants and private LLs wont do so.

tim

LL will take the highest rent they can get. If the highest rent they can get falls 50%, then it is take it or leave it. What would you do, leave it and get zero?

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LL will take the highest rent they can get. If the highest rent they can get falls 50%, then it is take it or leave it. What would you do, leave it and get zero?

That is what it comes down to. The landlord can only get what someone is willing to pay. If the LHA recipients get less than they were getting then they can outbid fewer who pay their own rents. Hence average rents are down hence 30 percentile is down. Positive feedback and those who pay their own rents eventually better off. Although council rents are meant to reach 80% of market rents they will be 80% of a reduced market rent compared with today. The end result should be lower rents and lower house prices.

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How does that help if LLs wont reduce the rents to that level? Something which I have said more than once I don't believe will happen.

There is just no market incentive to provide properties offering yields of 2% when let to the least reliable tenants and private LLs wont do so.

tim

stuff and nonsense - 2% yield is better than 0% yield if that is what it boils down to. Not my problem if the LL failed to realise the risks.

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For my area this should make an interesting change

Current 4 bed LHA - £184pw/£797pm

New 4 bed LHA - £166.85pw/£723pm

My current house is a 4 bed detatched on the edge of the village backing onto fields and we're paying £745, but the average house round here is advertised for around the £800 mark.

Currently our LL could kick us out and take an LHA recipient and make an extra £50 a month, from now on the LHA will be less than our rent which should make us slightly more secure andif we needed to move it should bring the areas average down :D

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For my area this should make an interesting change

Current 4 bed LHA - £184pw/£797pm

New 4 bed LHA - £166.85pw/£723pm

My current house is a 4 bed detatched on the edge of the village backing onto fields and we're paying £745, but the average house round here is advertised for around the £800 mark.

Currently our LL could kick us out and take an LHA recipient and make an extra £50 a month, from now on the LHA will be less than our rent which should make us slightly more secure andif we needed to move it should bring the areas average down :D

You should send your case to the Guardian, because if a HB tenant came along offering more money than you, in theory you would be kicked out of your home to make way for the more profitable HB tenant, all at your tax expense of course. Would the Guardian have bleated about that?

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You should send your case to the Guardian, because if a HB tenant came along offering more money than you, in theory you would be kicked out of your home to make way for the more profitable HB tenant, all at your tax expense of course. Would the Guardian have bleated about that?

jesus...that's a terrifying thought...and probably true

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It may be more than they want to afford but it demonstrably isn't more than they can afford.

For most regions of the UK that is a low rent and as most working people are actually housed somewhere we can assume that (those that are renting) are actually paying a rent in that region.

It does not follow at all. You are assuming that people who work can afford the same size accommodation as those who don't. Furthermore, you assume they can afford to live in the same place.

You will probably find "young" professionals in their mid-30s still living in shared housing while their tax pays for someone to have a self-contained flat without doing anything. If you look at the data, a 1-bed flat in central London is £322. I would hazard a guess that few people in receipt of this largess could afford to pay for the same accommodation if they worked (yes, I know they can claim LHA when working, but that does not help if their commuting costs and other expenses add up to more than they have left after paying the subsidised rent).

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I haven't double-checked your figures, but for a 2-bed house, going from ~£616pm to £573pm doesn't sound so bad. It's not something that's going to be a huge shock in the short term, at least. But it might make BLT'ers consider if they should cash in now without forcing them into outright bankruptcy.

Err its a massive shock. You truely have no idea how much £40 means to a low-paid worker.

What your not understanding (almost certainly because £40 a month is not much to you) is that the claimants of HB typically have zero to extremely little discretionary spending. Its not like they can not go out to the local restraunt, or do away with buying a new pair of shoes to make up the difference. £40 off of a £200 monthly minimum wage job is a bloody lot.

This means that inevitably they won't be able to pay the shortfall. And in the short-term at least they'll lose their current home as landlords attempt to find tenants that can pay their desired rent. Its why london councils are booking bed and breakfast rooms en masse. Of course after six months or so has passed landlords will start to get desperate and lower their rents, but before then the dislocation will be profound.

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If the guiding rule is supposed to be you'll always be better off working then these are nowhere near low enough. At these rates a worker has to earn 12-13K of pre-tax income to compete with the work-shy for a three bedroom house. Doesn't leave much left over from an average wage to cover luxuries like food and energy, not to mention non-directionals like council tax which the other lot are probably getting for free too.

The people you are talking about earning 12-13k if they have a family will all be on housing benefit.

For london 9% about are unemployed and will be collecting HB. That leaves the other 31% of housing benefit claimants, who will be pensioners, low-paid workers, etc. Though i agree HB-rent inflation needs tackling, in your rabidness you've bought the MSM message that this will only hit non-workers hook line and sinker.

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Err its a massive shock. You truely have no idea how much £40 means to a low-paid worker.

What your not understanding (almost certainly because £40 a month is not much to you) is that the claimants of HB typically have zero to extremely little discretionary spending. Its not like they can not go out to the local restraunt, or do away with buying a new pair of shoes to make up the difference. £40 off of a £200 monthly minimum wage job is a bloody lot.

This means that inevitably they won't be able to pay the shortfall. And in the short-term at least they'll lose their current home as landlords attempt to find tenants that can pay their desired rent. Its why london councils are booking bed and breakfast rooms en masse. Of course after six months or so has passed landlords will start to get desperate and lower their rents, but before then the dislocation will be profound.

I mean it's not a massive shock to the landlord. If they're already letting to HB tenants then they've pretty much admitted they can't get any more on the open market. They have a clear choice - suck up the smallish cut, sell the place or turf out the tenant and risk a void. Even a 1 month void (£573) is more than a whole year's reduction (£40 x 12 = £480) so anyone with their head screwed on will just suck it up.

London is a special case because the capped rates are so much less than the 30th percentile. I feel more ambiguous in that case as it will definitely force people out as the LL won't be able to manage such a big cut.

Outside of London, there will be sob stories, but on the whole I'd expect LL's to just accept the new rate. Life's unfair sometimes; shit happens; etc.

Edited by efdemin

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My area 4 bed changes from 240 to 205 (ish) , my town falls under the rates for a nearby city. Here there is nothing at those rates, something has to give.

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  • 246 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% +
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      • Even
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      • up 5%



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