Jump to content
House Price Crash Forum
Sign in to follow this  
HonestEA -

The Relationship Between Housing Benefit And House Prices In Your Area

Recommended Posts

I recently started a thread in annecdotals about how houseprices are being supported by Housing Benefit via the conduit of BTL.

For those interested in the subject please have a look at the thread here

What I would like is some more real world data from HPC members in the UK who know their local marketplaces to post some basic data.

Find out the Local Housing Allowance (LHA) paid to housing benefit claimants for 2 bed houses in your area pcm. (Each Local Authority has a different rate depending upon local factors)

Multply this figure x 12 to get the gross annual rental in £.

Multiply this figure by 100 then divide by 7 to get the implied price of a 2 bed house house based upon a benchmark gross yield of 7% which is the minimum most BTL investors will settle for. (RPI + 2%)

Look up some real world examples of 2 bed Victorian Terraces ( the most common entry level house type in most locations) and observe what they are currently being sold for.

Divide the real world price by the Implied price worked out above and multiply by 100 to express as a percentage so we can compare areas objectively.

It is my contention that affluent areas not supported by Housing Benfit will score substantially above 100% on this metric. Areas where housing benefit is broadly keeping house prices stable will score around 100%. Areas where housing benefit is artificially propping up house prices should come out below 100%.

If you are familiar with both affluent and impoverished post codes in your area and can post more than one set of data to show the contrast I would be grateful.

Many thanks in anticipation of your time.

Share this post


Link to post
Share on other sites

Central Greater Manchester BRMA

Shared Accommodation Rate:

£60.00 per week

One Bedroom Rate:

£92.31 per week

Two Bedrooms Rate:

£110.00 per week

Three Bedrooms Rate:

£132.69 per week

Four Bedrooms Rate:

£173.08 per week

Oldham & Rochdale BRMA

Shared Accommodation Rate:

£54.00 per week

One Bedroom Rate:

£86.54 per week

Two Bedrooms Rate:

£98.08 per week

Three Bedrooms Rate:

£114.23 per week

Four Bedrooms Rate:

£149.43 per week

Two on my street - 3 beds are offered by the same LL at 600 a month.

They are currently tenanted.

Total rent is 7200 a year

x100/7

102857.14285714285714285714285714

the ll paid 130k for the last one he bought (Although they pay 700 quid rent a month!

he has bought loads on the street - prices: £111,500, £112,000, £120,000, £118,000

he has been the market! (Something banks maybe should have taken into account when allowing people to keep buying and borrowing)

He's now in financial trouble apparently and is having to sell some of his properties to keep afloat.

One sold on the street for 93k recently and one is for sale now at £116,950

Others nearby going for less - so prices def falling.

Share this post


Link to post
Share on other sites

~£62k near me for a 7% yield.

A lot for sale at about £50k, and they soon get sold and end up with a 'to let' sign.

I hate B2L's. I gladly see them go bankrupt. I'd gladly seize their property.

There should be a scheme, where the government purchase property automatically for social rent.

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...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 338 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.