Housing Benefit Change On Jan 1St 2012

[ccc]

As most know this is coming in next year. From then on anyone under the age of 35 - up from the present 25 - will no longer get a single one bedroom flat rate. Instead they will get a single person shared rate.

In Edinburgh this will mean a reduction from £485 per month to £285 per month.

As the one bed flat market is the base of the entire housing pyramid - and as the existing benefit has effectively put a base level on rent so far - is this change not going to have far more impact than many think ? Could this be the straw that breaks the camel's back ?

There must be huge numbers of these people at present. So they either move into a shared place - or they get their landlord to accept £285 per month rather than £485. Unlikley they will agree - so even more 1 bedroom flats coming up for rent than just now. Prices will no doubt fall. Yields for landlords will go down. Some will decide to cut their losses and sell. This can only push down the sale prices for one bed flats. Already about the only part of the market (London probably excepted) where we have seen significant falls in nominal prices. Even in Edinburgh classic FTB one bedders are already down over 20& from peak - with no signs of slowing.

As these are ultimately the base of he ENTIRE housing market - will this change in January perhaps be the catalyst for the rest of the market to follow suite at a faster rate than present ?

It is certainly going to put even more downward pressure on the base on the pyramid. Unless I have missed something - This can ultimately only mean one thing for the rest of the pyramid...

[The Masked Tulip]

Surely BTL landlords would already be off-loading these ASAP? Experienced ones anyhow?

[porca misèria]

Or maybe it'll be a damp squib? In that those who get the higher amounts may in reality be few and far between?

Maybe just a few more pregnancies amongst those who absolutely must have their own place. But a marginal effect.

(of course, that's just a guess).

[ccc]

I have seen a few in Edinburgh in little groups in the same building that have come up all of a sudden. Def some sort of 'investor' offloading fast.

'HUGE PRICE REDUCTION - Priced £xxx under home report valuation ' etc...

This is one of three in the same block:

http://www.espc.com/buying/299292.html

[ccc]

Few and far between ? Don't have any figures myself. However I think the numbers of UK under 35 year olds living in a one bed place fully funded by housing benefit is likley to be a pretty high number...

All of these are going to suddenly tell their landlords they now only have £285 rather than £485*.

It is for new claimants from Jan 1st 2012 - and for existing ones it is their next 'review' according to the article in the local paper I read. So going to happen gradually over 2012 by the looks of it. But with a big shock in January for any new claimants.

This could increase demand for 'shared' 2 bedroom places for 2 benefit cliamants. However the maximum for this will be £570. Well under the average 2 bed rental price in Edinburgh just now.

* In Edinburgh for example

[Dorkins]

The Government's official figure (so likely a generous estimate) is that this will save £215m a year out of a total HB bill of over £20bn, so that's a 1% cut. Thankfully they managed to contain the effects to those under 35, so no real people will be harmed.

[ccc]

Table 9a. Latest figures.

http://research.dwp.gov.uk/asd/asd1/hb_ctb/hbctb_release_sep11.xls

At present there are 265,470 single people aged 25-34: With no child dependent claiming housing benefit allowance in the UK.

Unless they are stupid they will be claiming the full amount and having a one bedroom flat to themselves....

Doesn't look too 'few and far between' to me. This change could be ******ing huge.

[Colin]

All of these are going to suddenly tell their landlords they now only have £285 rather than £485*.

£285 is around the average weekly wage anyway.

On what planet would you have to live on to believe that a 1 bed flat monthly rent is worth than the gross average weekly wage?

Oh yeah! I forgot; Planet United Crapdom

Edited September 30, 2011 by Colin

[leicestersq]

Table 9a. Latest figures.

http://research.dwp.gov.uk/asd/asd1/hb_ctb/hbctb_release_sep11.xls

At present there are 265,470 single people aged 25-34: With no child dependent claiming housing benefit allowance in the UK.

Unless they are stupid they will be claiming the full amount and having a one bedroom flat to themselves....

Doesn't look too 'few and far between' to me. This change could be ******ing huge.

CCC,

not sure about huge, the total affect is the total amount of money taken out of the housing market, which is £215 million, not much.

If there are 265,470 single people claiming this benefit, then the average reduction is £70 a month, so I guess that many people arent claiming the full total anyway.

Why is this ageist? Why arent older single people treated the same? That I dont understand.

Much I dont understand, why do people think social housing is so great?

Q. What do you call a home built for someone else by a slave? - A. Social Housing.

[SarahBell]

It'll possibly lower rents on one bed places but HMO will put rents up maybe on 3 bed houses?

"In Edinburgh this will mean a reduction from £485 per month to £285 per month. "

LOTHIAN BRMA

Shared Accommodation Rate:£65.77 per week

One Bedroom Rate:£113.08 per week

Two Bedrooms Rate:£138.46 per week

Three Bedrooms Rate:£173.08 per week

Four Bedrooms Rate:£253.85 per week

2 bed could get 131 if HMO

3 bed could get 197 if HMO

4 bed could get 260 if HMO

So not much more really taking into account maybe the extra hassle of renting sep rooms out.

from http://afraser.com/welfare/hb_lha.html

But for April 2008, the Edinburgh local housing allowance rates were:

Dwelling Category type (£ per week) (£ per month)

1 Room - Shared B/W.C. & Kitchen £69.23 £300

1 Bedroom property £114.23 £495

2 Bedroom property £144.23 £625

3 Bedroom property £197.89 £858

4 Bedroom property £276.92 £1200

5 Bedroom property £357.69 £1550

[Mrs Bear]

Table 9a. Latest figures.

http://research.dwp.gov.uk/asd/asd1/hb_ctb/hbctb_release_sep11.xls

At present there are 265,470 single people aged 25-34: With no child dependent claiming housing benefit allowance in the UK.

Unless they are stupid they will be claiming the full amount and having a one bedroom flat to themselves....

Doesn't look too 'few and far between' to me. This change could be ******ing huge.

I'd be interested to know how many on here know of working 25-34 year olds, earning average salaries and not claiming HB, who can afford to rent flats all to themselves.

May well be different elsewhere, but not too many in London and the SE, I bet.

Around here the difference in rental between similar reasonable one and two beds is not huge - say £900-950 v. £1100-1250.

[ccc]

Yep it does seem 'ageist'.

Edinburgh prob has quite high rents compared to the average over the UK ? So the £200 figure down to £70 could have some of it explained by this. But yes clearly not all are taking full 'advantage' of what they could get.

Anyway - I think the impact will be large. We have 265,470 people who are going to be giving their landlord £70 less per month than they do at present. Lots of little impacts can become one very huge overall impact. I am thinking ball bearing landmine here.

[thod]

Lots of people share houses, they each rent a room and share facilities like kitchen, bathroom and lounge. Since this is to be the new model of housing benefit, the obvious move is sell flats and buy into these family sized homes. As the housing benefit people arrive, rents will increase.

Personally, I always found it more pleasant to live in shared houses than pokey flats. More sociable.

[ccc]

Thod - my mum is presently trying to find a 4 bed place to rent. It is so difficult. The people renting out are SO picky. I think the idea of landlords/BTL getting into buying 4 bed houses to rent out to 4 people on housing benefits...not very likely.

[MongerOfDoom]

As the one bed flat market is the base of the entire housing pyramid - and as the existing benefit has effectively put a base level on rent so far - is this change not going to have far more impact than many think ? Could this be the straw that breaks the camel's back ?

I think the LHA will become notionally unrelated to rents, although it is certain to be adjusted if it ever gets too far out of step (which may or may not be possible in principle). The idea is that it is set at 30th percentile and then uprated with CPI. I presume the amount has been set already (?)

So even if there are fewer people able to pay for one-bed flats, the LHA rate for those who still qualify will remain in line with what it is now. The only difference will be that following any substantial price fall the luxury end of the market will be occupied by claimants and the low end by people who work (if occupied by anyone at all).

[_w_]

Lots of people share houses, they each rent a room and share facilities like kitchen, bathroom and lounge. Since this is to be the new model of housing benefit, the obvious move is sell flats and buy into these family sized homes. As the housing benefit people arrive, rents will increase.

Personally, I always found it more pleasant to live in shared houses than pokey flats. More sociable.

the obvious move is sell flats and lick your wounds after you've sold at a loss?

I think I;ve read there is a surplus of 1 bed flats already. Who's going to buy their flats?

[Goat]

not sure about huge, the total affect is the total amount of money taken out of the housing market, which is £215 million, not much.

Remember, that's £215m income every year forever. It's the equivilent of maybe a one off capital withdrawal of £5 billion.

[Mrs Bear]

Thod - my mum is presently trying to find a 4 bed place to rent. It is so difficult. The people renting out are SO picky. I think the idea of landlords/BTL getting into buying 4 bed houses to rent out to 4 people on housing benefits...not very likely.

Some will - the sort who now rent to students and factor in mess and damage - but they'll be grottier houses in grottier areas.

Anyone with a nice family house in a good area will probably think very hard.

Asylum seeker family not far from me were living for over 2 years in a pretty nice, 4 bed 2 bath. Recently had to move out because LL upped the rent* and HB won't cover it. Absolutely nothing similar nearby now for anything like the HB 4 bed rate. They've evidently had to move a few miles to a council property in not nearly such a nice area - after apparently refusing to leave and the LL getting an eviction order.

*From what I gather they'd got it at a relatively low rate before - LL had had a few months' void after previously upping the rent and former tenants (private) telling her to stuff it.

[Democorruptcy]

Lots of people share houses, they each rent a room and share facilities like kitchen, bathroom and lounge. Since this is to be the new model of housing benefit, the obvious move is sell flats and buy into these family sized homes. As the housing benefit people arrive, rents will increase.

Personally, I always found it more pleasant to live in shared houses than pokey flats. More sociable.

Close but no cigar.

[@contradevian]

As most know this is coming in next year. From then on anyone under the age of 35 - up from the present 25 - will no longer get a single one bedroom flat rate. Instead they will get a single person shared rate.

In Edinburgh this will mean a reduction from £485 per month to £285 per month.

I bet there are a lot of young earners having to share, so not unreasonable for young unemployed to share too.

Guess there could be a move out of the major cities into area's of lower demand, and thus lower rents.

Here in Kirklees, West Yorkshire. the one bed flat rate is about £79.62 but you could get a house for that.

Shared room rate is £55, which would almost amount to a one bed flat from the local social landord.

[porca misèria]

£285 is around the average weekly wage anyway.

On what planet would you have to live on to believe that a 1 bed flat monthly rent is worth than the gross average weekly wage?

Oh yeah! I forgot; Planet United Crapdom

Re-read the post that mentions £285.

Then look back to 1983, when Thatcher reduced the maximum housing benefit payable to a single person without questions being asked ... to a level that was approximately the average salary pre-tax, or 60% above the average salary post-tax.

[winkie]

As most know this is coming in next year. From then on anyone under the age of 35 - up from the present 25 - will no longer get a single one bedroom flat rate. Instead they will get a single person shared rate.

In Edinburgh this will mean a reduction from £485 per month to £285 per month.

Won't they just make a one bed flat into a two bed shared and collect 2x £285 per month.

[Steagle Colbeagle]

HMO's full of crack heads and the feckless coming to a cosy surbuban street near you!!!! Plenty of the spivs and speculators know there will be more profit in this than a private rental to a larger family. Guess the Guardianista dreams will come true and they will get more diverse communities (just along as they don't live next to them)

[ccc]

Winkie - sharing a room ? I imagine most would rather move to a proper 2 bed where they can actually get their own room...Not going to cost them anymore afterall.

[Mrs Bear]

Won't they just make a one bed flat into a two bed shared and collect 2x £285 per month.

Oh, that's easy - if you've got a halfway decent size kitchen, turn that into a bedroom, shove a kitchen at one end of the living room, and call it a 'luxury open-plan apartment...'