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Looks like the brilliant solution to the problem is not having the promised effect. Evicted tenants are the collateral damage in the poker game between landlords and the government, but it seems this is considered a price worth (other people) paying.

It's still much too early to assess the impact of the cap on the market, but I'd place a very large amount of money on the Express being wrong on this one. Asking prices on rental accommodation have dropped in the last month, especially in prime areas where the drop is becoming significant.

It's known that prime locations in London foretell changes in the broader housing market, and with good reason - if prime areas see a reduction in rents (which they are now seeing), you cannot carry on asking £500 a week for your Acton two-bed, when a similar property in a better location is suddenly available for the same amount. A reduction in rents in the decent areas forces a reduction in rents in the less desirable areas.

The cap compounds this. There is an astonishing amount of one and two-beds priced over the cap, in mediocre areas of London, simply sitting on the market. Price reductions have started, but there comes a point when the BTL's look at the currently over-inflated price of property, then look at their falling yields, and conclude that selling is the best option. That's when the fun/crash really starts.

Edited by Dr_Mibbles

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Ten people or there abouts, IT based. Private sector.

That is not good. They have been crowing about how buoyant the service sector is over the last month but my personal experience of 20 years is that IT is often one of the first sectors into recession.

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I hope rents and prices come back down to reality in London and in the South/SE. But this article is from Jan 2012. I expected a much stronger effect by now. I'm still worried.

.

Edited by Tired of Waiting

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The evicted tenants are shipped out of London to the South coast and up North. In fact anywhere that rents are cheaper i.e. HB will be less. So HB can fall and London rents can nonetheless rise.

Why would the rents rise? How many can afford to work to pay those kind of rents?

In my view the majority of HB claimants will remain where they are and the rents will have to adjust down accordingley.

Edited by Take Me Back To London!

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The £500 per week cap for families and £350 for individules is still too much.

Perhaps, although the housing benefit cap is £250pw for a one bed, £290 for a two bed.

In most parts of London, that's well below average asking prices. However, very significantly they have also pegged maximum housing benefit to the 30th percentile in terms of an areas average rental costs, so housing benefit will act as a drag on price rather than a stablising factor, which it was before (when set at 50th percentile).

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Perhaps, although the housing benefit cap is £250pw for a one bed, £290 for a two bed.

In most parts of London, that's well below average asking prices. However, very significantly they have also pegged maximum housing benefit to the 30th percentile in terms of an areas average rental costs, so housing benefit will act as a drag on price rather than a stablising factor, which it was before (when set at 50th percentile).

Thanks for that, do you have a link for those precise figures?

The figures I came across were qouted by Shelter and again by the BBC.

http://www.bbc.co.uk/news/uk-politics-22148764

Couples and lone parents in Haringey, Enfield, Croydon and Bromley will not receive more than £500 a week while a £350 limit applies to single people.
Edited by Take Me Back To London!

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Thanks for that, do you have a link for those precise figures?

Sure, they're outlined on the gov.uk website: https://www.gov.uk/housing-benefit/what-youll-get

Bear in mind this works alongside the overall benefit cap. So if a family is housed in a 4 bedroom house @ £400 per week (the max amount available), they will only be able to claim another £100 in tax credits and other benefits. In reality, this excludes most of London for families which are not reasonably well off.

It's the compound nature of these changes which will drive down rents - that combined with falling prime rents of course.

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Perhaps, although the housing benefit cap is £250pw for a one bed, £290 for a two bed.

In most parts of London, that's well below average asking prices. However, very significantly they have also pegged maximum housing benefit to the 30th percentile in terms of an areas average rental costs, so housing benefit will act as a drag on price rather than a stablising factor, which it was before (when set at 50th percentile).

£250 p/w for one bed and £290 p/w for a two bed are still and awful lot of money!

If you get outside of zone two £290 p/w would probably get you a fairly decent two bed flat.

I was really hoping that these caps would make a huge difference to London prices, but I'm not so sure they will.

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£250 p/w for one bed and £290 p/w for a two bed are still and awful lot of money!

If you get outside of zone two £290 p/w would probably get you a fairly decent two bed flat.

I was really hoping that these caps would make a huge difference to London prices, but I'm not so sure they will.

I think you're right to be hopeful. Although the cap won't directly impact properties in cheaper outer London areas, it will impact them by osmosis.

The reason for this, is that when you push down rental costs in more desirable areas, the other 'lesser' areas have to reduce their prices in order to compete. Imagine you had £250 a week for a one-bed flat, and could choose between Highbury or Tottenham - well, given the choice, most would pick Highbury of course.

That's why, if you are hoping prices will fall, you should be encouraged by recent developments in the London prime market. There are quite dramatic falls in asking rents, and as the nucleus of the whole bubble, any changes here will filter out to the rest of the capital as prices adjust accordingly.

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That's why, if you are hoping prices will fall, you should be encouraged by recent developments in the London prime market. There are quite dramatic falls in asking rents, and as the nucleus of the whole bubble, any changes here will filter out to the rest of the capital as prices adjust accordingly.

Yes, I've long been convinced that the London prime market is the lynch-pin of the UK bubble. I'm seeing more and more anecdotal evidence of good prime properties needing substantial discounts to sell.

Hopefully your analysis is correct.

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Yes, I've long been convinced that the London prime market is the lynch-pin of the UK bubble. I'm seeing more and more anecdotal evidence of good prime properties needing substantial discounts to sell.

Hopefully your analysis is correct.

In my completely unscientific analysis on the train home from work:

London is to the UK as was Tokyo to Japan in the 90s.

It's not pretty and I have a ringside seat.

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£250 p/w for one bed and £290 p/w for a two bed are still and awful lot of money!

If you get outside of zone two £290 p/w would probably get you a fairly decent two bed flat.

I was really hoping that these caps would make a huge difference to London prices, but I'm not so sure they will.

can quite easily get a TWO bed flat in or near Dulwich (zone 2) for £250 pw..

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In my completely unscientific analysis on the train home from work:

London is to the UK as was Tokyo to Japan in the 90s.

It's not pretty and I have a ringside seat.

It's difficult to perceive it at the moment but the recent gains are very fragile. I haven't see a better example than this of how the prices are sometimes just pure fantasy - http://propertyspotter.blogspot.com/2013/05/north-row-park-lane-place.html

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A Khafka-esque twist:

"If a tenant is evicted because of rent arrears the council may not have a duty to help them because they are judged to have made themselves intentionally homeless."

thats quite interesting.....I wonder if this is the masterplan? Cleanse London of poorer people and spread the population a bit and not having to pay HB for evicted people saves government money? I wonder how many vulnerable people are being warned that they should "trade down" rather than go through eviction leading to complete loss of HB?

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thats quite interesting.....I wonder if this is the masterplan? Cleanse London of poorer people and spread the population a bit and not having to pay HB for evicted people saves government money? I wonder how many vulnerable people are being warned that they should "trade down" rather than go through eviction leading to complete loss of HB?

Large swathes of London have already been cleansed of everyone bar the poor and the very rich, i.e. those in the middle. Except no one termed it 'cleansing' when it happened, and no one gave a t@ss either.

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That is not good. They have been crowing about how buoyant the service sector is over the last month but my personal experience of 20 years is that IT is often one of the first sectors into recession.

Just going off topic slightly - I have been in IT for 25 years and the last 3 years have been appalling - with plummeting rates and serious "competition" from India.

IT is (and always has been) very cyclical - 6-18 month cycles dependant on the IT investment fads of business and this year - we appear to be taking a big dive again.

But I dont believe this is linked to the wider service sector - e.g. the dotcom crash in 2000/1 was devastating to IT workers (it was an IT recession) but no-one really cared then as wider Service Sector carried on..

Lets go back further - 89-92 was the last big recession yet was a boom time for those of us in IT.

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Large swathes of London have already been cleansed of everyone bar the poor and the very rich, i.e. those in the middle. Except no one termed it 'cleansing' when it happened, and no one gave a t@ss either.

Yes - average/middle income earners were socially cleansed from central London a decade ago. Now the poor are being asked to leave - its an outrage and verging on what happened in the former Yugoslavia in the 1990s.

Personally its cruel making the poor live in zone 1 - not an Iceland, Aldi or Lidl in sight. The cost of living is much higher.

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Large swathes of London have already been cleansed of everyone bar the poor and the very rich, i.e. those in the middle. Except no one termed it 'cleansing' when it happened, and no one gave a t@ss either.

Very true. Those earning 20 - 30k have been increasingly having to travel one to two hours each way to work, and not through choice, as have been priced out. That's being going on for 10+ years but no peep from the media about that.

It is important to understand the large rises (10% plus) are in only a quarter of London boroughs. They are those in the centre, and the SW in Richmond and that area. Most new builds are now bought off plan abroad in Asia sustaining and fueling it. But around a third of boroughs are currently seeing less than 3% annual rises and have been for 5 years (and often far less).

Edited by sf-02

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I hope rents and prices come back down to reality in London and in the South/SE. But this article is from Jan 2012. I expected a much stronger effect by now. I'm still worried.

I didn't expect it to make much difference due to the drastic supply/demand imbalance. And reports so far suggest it hasn't.

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Why would the rents rise? How many can afford to work to pay those kind of rents?

In my view the majority of HB claimants will remain where they are and the rents will have to adjust down accordingley.

London rents at all-time high as prices rocket eight times faster than wages: http://www.standard.co.uk/news/london/london-rents-at-alltime-high-as-prices-rocket-eight-times-faster-than-wages-8578230.html. Rents are rising due to continued demand from people who cannot afford to buy and are forced to rent.

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Curious, how many people posting in this thread live in London?

I live in N19 Zone 2. I bought my 2 bed in Jan 2006 and am now looking to move to a 3 / 4 bed. Round my way you are looking at what I call a "slavebox + model" for £650k which is essentially a 2 bed with some "smart" developer managing to add on another 7' x 9' "double room' to make it a "3-bed". I paid £247k for my place and I have had 6 agents parasites around with the average recommended price at £465k.

I've literally had one agent begging me to put it on with them and I have got him down from 2% commission to 0.75% :lol: Not that I'll use an agent, I just wanted to see how low I could get him for my own enjoyment - as if I'd pay some mug £3.5k to do fxxk all except a few photos and a plan.

The whole market is insane and I have decided that my next move will be to sit and wait it out until we get closer to 2015 and the new Labour government. If the government actually allows prices to fall it will be great news as I'll be able to afford something I previously couldn't.

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Yes - average/middle income earners were socially cleansed from central London a decade ago. Now the poor are being asked to leave - its an outrage and verging on what happened in the former Yugoslavia in the 1990s.

Personally its cruel making the poor live in zone 1 - not an Iceland, Aldi or Lidl in sight. The cost of living is much higher.

You do get the odd Greggs though! I take your point though. Many trapped in the underclass don't get any extra benefit from located in London. The jobs are either service based and mainly taken by over qualified migrant workers, or simply out of reach of their skillset eg doctors, lawyers etc. Instead of trying to force people to move out, councils could have bribed eg 10k if you move to a country town, or next the sea. The council could then have sold a percentage of those vacant properties and so make money. No bad publicity from folk suffering from what is called the bedroom tax. Instead we have seen a very clumsy way of addressing the issue.

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  • 295 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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