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Benefits Cap: The Great London Exodus Didn't Happen

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Seems that private landlords capitulated

http://www.24dash.com/news/local_government/2013-11-15-Council-says-feared-benefit-cap-exodus-has-failed-to-materialise?utm_source=dlvr.it&utm_medium=twitter

“The true story is that in the vast majority of cases we have successfully negotiated with local landlords to support the new benefits system by reducing their rent demands to levels within the cap. This is a win-win situation for taxpayers, who save money, and for residents who wish to remain within in the area.

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So for years Landlords have been given extra billions from the taxpayer .... and are still racking it in albeit at a slightly reduced level.

+1 This proves that the market had been and is being distorted by the level of government rent subsidies.

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It was claimed that demand in London for property was so high that private landlords would never budge on rents.

Now we have this figure from the council we can begin to work out how much money has been wasted on over-paying for private landlords.

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Lets cut it a bit more and call their bluff again!

Sorry, the plan is for LHA to rise in line with CPI from now on (unlike wages). Apparently the government feels landlords have suffered enough.

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Edited by Dorkins

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It was claimed that demand in London for property was so high that private landlords would never budge on rents.

Now we have this figure from the council we can begin to work out how much money has been wasted on over-paying for private landlords.

This is the cap though, not the percentile change thing though?

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Who'dve thunk it?

So we now know for a fact that LLs have no pricing power at this level of rents. Time to squeeze some more to find the lowest level they can take.

Obvious there are not enough alternative tenants to take the properties at a higher level so lets get reducing that HB bill some more. Win-win.

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Who'dve thunk it?

So we now know for a fact that LLs have no pricing power at this level of rents. Time to squeeze some more to find the lowest level they can take.

Obvious there are not enough alternative tenants to take the properties at a higher level so lets get reducing that HB bill some more. Win-win.

Will the governments hand be forced to reduce it some more?

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There definitely was an exodus to the south coast - I recall people in local authorities and housing associations complaining about the pressure of housing London refugees, about 18 months ago, but the complaints have eased off.

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There definitely was an exodus to the south coast - I recall people in local authorities and housing associations complaining about the pressure of housing London refugees, about 18 months ago, but the complaints have eased off.

Probably because the 'complaints' were politically motivated propaganda and fizzled out once the reality failed to materialise.

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"The true story is that in the vast majority of cases we have successfully negotiated with local landlords to support the new benefits system by reducing their rent demands to levels within the cap. This is a win-win situation for taxpayers, who save money, and for residents who wish to remain within in the area."

Maybe landlords are happy to negotiate with existing tennants but I suspect that the cap will bite harder for new tennants claiming HB.

Not that this is a bad thing.

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Will the governments hand be forced to reduce it some more?

Well they are paying 40% of private sector rent bill http://www.ippr.org/events/54/6279/keynote-speech-by-rt-hon-iain-duncan-smith-mp so you would think they would have the trump card ? but as already mentioned there may be too many VI`s in team blue/red and yellow

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I have said for years scrap housing benefit completely, landlords will not leave their properties empty for long.

Although people like to talk about the "free market", a lot of those BTL politicians would be fooked if we actually had one! :blink:

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Probably because the 'complaints' were politically motivated propaganda and fizzled out once the reality failed to materialise.

No, no - there was definitely a period where tenants were flooding out of London. People at the coalface don't propagandise, they chat about their experiences. I can't give figures, but it looks like the phenomenon was temporary.

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Will the governments hand be forced to reduce it some more?

IIRC the LHA Cap is due to increase with CPI. Yet I can't see the government being able to resist freezing the Cap at current rates. Despite the hype there has been barely a squeal with the cap set at the current level, so there is plenty of spare political capital and big savings to be made.

Rents have definitely and noticeably dropped in parts of London and landlords have lost their pricing power. I think there is even a case for taking a new look at the 30th percentile again and actually revising rates down.

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IIRC the LHA Cap is due to increase with CPI. Yet I can't see the government being able to resist freezing the Cap at current rates. Despite the hype there has been barely a squeal with the cap set at the current level, so there is plenty of spare political capital and big savings to be made.

Rents have definitely and noticeably dropped in parts of London and landlords have lost their pricing power. I think there is even a case for taking a new look at the 30th percentile again and actually revising rates down.

LLs never had any pricing power in most places. They get what they are given, they have just been extremely successful at making sure they have been given a lot.

Too many politicos have acquiesed to hollow threats about 'getting other tenants' etc if the benefits didn't flow. Would be nice to think that a few more will start to call their bluff, hope springs eternal.

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LLs never had any pricing power in most places. They get what they are given, they have just been extremely successful at making sure they have been given a lot.

Well this thread is about London, and I reckon until the LHA cap LLs did have the pricing power. In London LLs could name whatever price they wanted, because sooner or later a desperate family on LHA would come along and charge the lot to the local council, who in turn would claim the money from central government. Rents went through the roof a few years ago, fueled by out of control LHA, and IMO is the main reason the UK didn't have the HPC of Spain, Ireland the USA etc.

In central London the LHA rate for a 5 bed was £2000 per week, now it's capped at £450. That's a serious cut in pricing power.

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I think it is more likely that a lot of households are being given discretionary housing benefit which will last for a few months (and H&F have only had the cap since September 15th), many will have moved into smaller properties where they are more overcrowded rather than move out of London and some will have just moved into the most squalid, cheapest slumlord properties available. I doubt that many landlords would voluntarily drop their rents unless they are renting out shitholes which only the very desperate would take.

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