Fergus Wilson And Grant Shapps -- solving housing crisis

[Liquid Goldfish]

I don't think he's got a chance in hell of making the government change HB policy. Either the HB limit or the way it is paid. In fact the coalition are going in the opposite direction with UC. A labour government might have other ideas, but even labour don't want to see vast amounts of public money making landlords rich, and in any case it would take some time to turn this supertanker around.

I don't think the government are serious about cutting HB - just look at the DWP's own projections which show it rising in real terms - UC does nothing to change the amount of money going to private landlords.

The caps both on overall benefits and on HB affect a tiny number of claimants - about 1 in a 1000 - all it does is stir up anger against claimant and provide a scapegoat to distract from other problems.

I would, though, be interested to see what effect the change to the LHA calculation by using a different percentile has made.

[winkie]

It's great entertainment though!

Desperate times, desperate measures.......let him do him do his worst.

[lastlaugh]

I don't think the government are serious about cutting HB - just look at the DWP's own projections which show it rising in real terms - UC does nothing to change the amount of money going to private landlords.

The caps both on overall benefits and on HB affect a tiny number of claimants - about 1 in a 1000 - all it does is stir up anger against claimant and provide a scapegoat to distract from other problems.

I would, though, be interested to see what effect the change to the LHA calculation by using a different percentile has made.

I'd be interested to know where you get your numbers from. Especially the 1in a1000 bit. In much of the South East, and in London especially, I would wager that just about everyone in the PRS claiming HB is being hit, as we speak, by either the HB cap, the change to the 30th percentile, or the overall benefit cap. The limits are widely published, and the asking rents are easy to find. The disparity in some places is huge. Which is exactly why tenants are getting in arrears and the likes of the Wilsons are bleating.

Here's a useful table from Shelter. It's dated now, but you can see the changes by local authority.

And UC, if it is ever introduced, won't have a ring fenced amount for landlords. Just like the overall benefit cap. With UC landlords can't demand that HB gets paid direct to them becaus HB as a discrete figure will cease to exist. Landlords might get the same amount of money, they might get less, they might get more, who knows? Who cares? With UC landlords won't be able to game the system anymore.

[Liquid Goldfish]

I'd be interested to know where you get your numbers from. Especially the 1in a1000 bit. In much of the South East, and in London especially, I would wager that just about everyone in the PRS claiming HB is being hit, as we speak, by either the HB cap, the change to the 30th percentile, or the overall benefit cap. The limits are widely published, and the asking rents are easy to find. The disparity in some places is huge. Which is exactly why tenants are getting in arrears and the likes of the Wilsons are bleating.

Here's a useful table from Shelter. It's dated now, but you can see the changes by local authority.

I was saying 1 in 1000 for the caps. There's about 10 million benefit claimants and the numbers affected by the caps are in the low tens of thousands - so roughly about 1 in 1000 - or it could be as much as 1 in 300 - but still a very small proportion for the publicity the government has gained from them!

I'm much more interested in the effects of the 30th percentile as that is a serious policy, rather than a publicity stunt. Thanks for the table!

Edited January 11, 2014 by oldsport

[Liquid Goldfish]

And UC, if it is ever introduced, won't have a ring fenced amount for landlords. Just like the overall benefit cap. With UC landlords can't demand that HB gets paid direct to them becaus HB as a discrete figure will cease to exist. Landlords might get the same amount of money, they might get less, they might get more, who knows? Who cares? With UC landlords won't be able to game the system anymore.

I think that's wrong. The housing element of UC can be paid to private landlords directly almost exactly like HB. In fact, with UC, the DWP are saying it will actually be slightly easier for private landlords to claim housing payments direct.

EDIT: The big change is for social landlords where the rules are being made the same as for private landlords.

Edited January 11, 2014 by oldsport

[lastlaugh]

I was saying 1 in 1000 for the caps. There's about 10 million benefit claimants and the numbers affected by the caps are in the low tens of thousands - so roughly about 1 in 1000 - or it could be as much as 1 in 300 - but still a very small proportion for the publicity the government has gained from them!

I'm much more interested in the effects of the 30th percentile as that is a serious policy, rather than a publicity stunt. Thanks for the table!

The total benefit cap only affects large workless families renting expensive homes, so you are right they are a relatively small number.

But I think you are confusing the total benefit cap with the housing benefit cap. The housing benefit cap is the absolute maximum that can be claimed for a particular property type, and only kicks in (so far) in the inner London boroughs. Everyone living in those boroughs will feel the squeeze of the cap.

Outside of London all HB claimants in the PRS will be affected by just the change to the 30th centile.

You probably want this data Government housing benefit statistics

Some numbers from Feb 2013 Table 3:

Total GB HB households - 5.1 million. Total in PRS - 1.7 million all subject to the 30th centile change

Total London HB households - 850,000, total in PRS - 280,000, of which approx 100,000 households in inner London subject to the 30th centile change AND the HB cap.

[lastlaugh]

I think that's wrong. The housing element of UC can be paid to private landlords directly almost exactly like HB. In fact, with UC, the DWP are saying it will actually be slightly easier for private landlords to claim housing payments direct.

Yes, in theory landlords can get the housing element paid to them, but it's disingenuous of the government to promote this as the housing element will be delinked from housing benefit. The housing element will be calculated on a household basis and could be very low eg. £10 per week, when the HB rate could be £100 per week, and local rents £120 per week.

We are already half way there with the total benefit cap. Large workless families in London were getting £400 a week in HB, now after the total benefit cap they get a total of £500 per week out of which they still have to pay their rent. The £400 is no longer ring fenced, no landlord can grab it because no council would pay £400 to a landlord leaving the family with just £100 to live on. The family has to move. Or get a job. Or the landlord has to accept a lower rent.

[Liquid Goldfish]

The total benefit cap only affects large workless families renting expensive homes, so you are right they are a relatively small number.

But I think you are confusing the total benefit cap with the housing benefit cap. The housing benefit cap is the absolute maximum that can be claimed for a particular property type, and only kicks in (so far) in the inner London boroughs. Everyone living in those boroughs will feel the squeeze of the cap.

Outside of London all HB claimants in the PRS will be affected by just the change to the 30th centile.

You probably want this data Government housing benefit statistics

Some numbers from Feb 2013 Table 3:

Total GB HB households - 5.1 million. Total in PRS - 1.7 million all subject to the 30th centile change

Total London HB households - 850,000, total in PRS - 280,000, of which approx 100,000 households in inner London subject to the 30th centile change AND the HB cap.

Very interesting, thanks.

The overall benefits cap is by a long way the government's most popular policy. But it only affects a tiny percentage of claimants. The power of spin! And, sadly, it shows how easy it is to manipulate most of the population with a good (if disingenuous) soundbite.

From what you say, though, it looks like the HB cap is having a much bigger effect - much more than I had realised - and it's concentrated just in inner London where the effect must be enormous.

Edited January 11, 2014 by oldsport

[Liquid Goldfish]

Yes, in theory landlords can get the housing element paid to them, but it's disingenuous of the government to promote this as the housing element will be delinked from housing benefit. The housing element will be calculated on a household basis and could be very low eg. £10 per week, when the HB rate could be £100 per week, and local rents £120 per week.

We are already half way there with the total benefit cap. Large workless families in London were getting £400 a week in HB, now after the total benefit cap they get a total of £500 per week out of which they still have to pay their rent. The £400 is no longer ring fenced, no landlord can grab it because no council would pay £400 to a landlord leaving the family with just £100 to live on. The family has to move. Or get a job. Or the landlord has to accept a lower rent.

I don't understand the bit in bold. Say you have an average sized family outside of London, not affected by either of the caps. Why is their housing element of UC so much lower than it would be under HB. Is it to do with the way UC is calculated - I'm familiar with how HB and means tested benefits are calculated now but not with the detail of how it will happen under UC. Or is this mainly a London problem?

[Liquid Goldfish]

delete

Edited January 11, 2014 by oldsport

[juvenal]

http://www.theguardian.com/money/2014/jan/10/fergus-wilson-property-tycoon-mass-evictions

Fergus is clearly rattled by current plans.

[zugzwang]

Larry the Ligger.

PS Nice sombrero, Ferg.

Edited January 11, 2014 by zugzwang

[billybong]

But Wilson regards himself as a crusader against benefit fraud.

Can't he just pay himself a bonus out of taxpayers and savers bailout money - that's what the banks do. At any rate losses will be tax deductible won't they - again.

For goodness sake he should try to put it into perspective.

I'm all in favour of aspiration, real entrepreneurship etc and so on but under the circumstances that (crusader against benefit fraud) is so one sided as to be utterly ridiculous.

Edited January 11, 2014 by billybong

[(Blizzard)]

I'm all in favour of aspiration, real entrepreneurship etc.

Like all those kids aspiring to be Al Pacino in scarface?

God-help us if outbidding people on homes, and then charging them to ******-off, is entrepreneurial.

[long time lurking]

[(Blizzard)]

This guy is Sheriff Fatman.

Fatman's got something to sell

To the Capital's homeless

A Crossroad's Motel

For the No Fixed Abodeless

Where you can live life in style

If you sleep in a closet

And if you flash him a smile

He'll take your teeth as deposit

There's bats in the belfrey

The windows are jammed

The toilet's ain't healthy

He don't give a damn

Just chuckles and smiles

Laughs like a madman

A born again Rachman

Here comes Sherrif Fatman

Edited January 12, 2014 by (Blizzard)

[billybong]

Like all those kids aspiring to be Al Pacino in scarface?

God-help us if outbidding people on homes, and then charging them to ******-off, is entrepreneurial.

No.

That's not what I meant. That is a ridiculous and pathetic misinterpretation.

It's why I used the word REAL before entrepreneurship.

[(Blizzard)]

No.

That's not what I meant. That is a ridiculous and pathetic misinterpretation.

It's why I used the word REAL before entrepreneurship.

Fair enough, I misunderstood, sorry about that.

Frankly, I find these people evil in a very real, biblical sense. This makes me very angry, so I guess I jumped to conclusions.

Ridiculous and pathetic a bit unfair I think.

Edited January 12, 2014 by (Blizzard)

[billybong]

Fair enough, I misunderstood, sorry about that.

Frankly, I find these people evil in a very biblical sense, and it makes me very angry, so I guess I jumped to conclusions.

Ridiculous and pathetic a bit unfair I think.

Really. No more unfair than your post - but ok I understand and agree your feelings on the general situation.

It's shameful.

I'm not against REAL entrepreneurship and risk taking but I'm against banking, BTL and property development bailouts etc (as well as fraud) and I'm in favour of a REAL balanced economy. The sort of economy that's been promised in the UK for decades and decades and consistently been reneged on to the detriment of the sectors outside of what's often called the FIRE economy.

Edited January 12, 2014 by billybong

[lastlaugh]

I don't understand the bit in bold. Say you have an average sized family outside of London, not affected by either of the caps. Why is their housing element of UC so much lower than it would be under HB. Is it to do with the way UC is calculated - I'm familiar with how HB and means tested benefits are calculated now but not with the detail of how it will happen under UC. Or is this mainly a London problem?

Those figures weren't meant to be representative. I made them up to show that their will be no link between UC and local rents, and this is already the case with the total benefit cap and to a lesser extent the HB cap. The notion that landlords will get their rent paid direct will have little meaning soon, as the system won't care anymore what the landlord charges. That is the whole point of HB reform. Of course the excess of benefit over local rents will be bigger in cheaper areas than in more expensive ones like London. Because of the caps and other restrictions, UC looks more like a citizens income than a needs based system as we know it.

Here us a DWP document that might interest you.

Chapter 3 especially.

Chapter 3

Choice

3.1 Introduction

1. A key aim of the Local Housing Allowance (LHA) was to allow customers to balance the quality and price of their accommodation with their household income by giving them a direct financial interest in the level of their rent. Direct payments and the transparency of the LHA should have enabled tenants to exercise a greater degree of choice over their accommodation. However the scope for Housing Benefit (HB) claimants to exercise this choice will have been affected by landlord behaviour, and in particular landlord responses to the LHA. Because of this, the analysis looks at both the responses of customers and of landlords.

3.2.1 Landlord Rent-Setting Behaviour, Impact on Prices and Affordability of Accommodation

3. A key question is the extent to which the publication of LHA rates has led landlords to use these to set rents. Publication of LHA rates may have influenced rents in the private rental market and limited the scope for HB claimants to trade off the quality and price of their accommodation.

And this

10. Similarly, advisers from LAs and independent advice agencies interviewed for the review24, also reported that they thought some landlords were setting rents at LHA levels. In some areas (e.g. the London Borough of Islington), advisers reported that the generosity of LHA combined with the practice of landlords raising rent to LHA levels was making the area unaffordable to people in work and not in receipt of HB. It was also noted that this practice was making up-front costs, such as deposits, more expensive for all tenants.25

In other words, the government have long had data which suggests that the BTL industry is gaming the benefit system - which is something we all know anyway here on HPC. And they don't think the answer is to either raise benefits or pay landlords direct (Chapter 8). So the pressure that the Wilsons are feeling is actually policy, not accident, and he has zero chance of changing it.

Edited January 12, 2014 by lastlaugh

[Executive Sadman]

I DONT GET IT

HIS MORTGAGE FINANCING RATES WENT FROM >5.0% IN 2008 DOWN TO 0.5% TODAY. A 90% DECREASE IN OVERHEADS.

IF ANY OTHER BUSINESS SAW A 9/10THS REDUCTION IN OUTGOINGS THEY WOULD BE BOOMING

WHY IS FUNGUS SO SHIT AND WHY IS THE GUARDIAN REPORTING THIS RUBBISH.

[Executive Sadman]

Oh, and someone register slumlordsforlabour.com before its gone.

LOADSAMONEY!!!

[okaycuckoo]

Here us a DWP document that might interest you.

Chapter 3 especially.

Thanks - haven't seen that linked on HPC before.

[The Knimbies who say No]

There is one thing I agree with....but only one.

If housing benefit is set by the rent paid, then pay it direct to the landlord.

BUT, if the tenant is given a budget to cover the rent and his living expenses, then pay the tenant the money direct.

The part that irks me is the selective emphasis of the 'business' aspect of being a LL.

All businesses have default rates wired into their pricing, and Fergus says himself that the £800k in defaults caused him no major headache(we'll have to assume this is accurate without evidence except a national TV blitz ;-)). His attempt to gain a certain payment should be accompanied by the admission that risk of default has reduced and the rents can tolerably drop to reflect this.

Dave to Fergus: "Discount for cash?"

[Sancho Panza]

http://en.wikipedia.org/wiki/Ozymandias

'I met a traveller from an antique land

Who said: Two vast and trunkless legs of stone

Stand in the desert. Near them, on the sand,

Half sunk, a shattered visage lies, whose frown,

And wrinkled lip, and sneer of cold command,

Tell that its sculptor well those passions read

Which yet survive, stamped on these lifeless things,

The hand that mocked them and the heart that fed:

And on the pedestal these words appear:

"My name is Ozymandias, king of kings:

Look on my works, ye Mighty, and despair!"

Nothing beside remains. Round the decay

Of that colossal wreck, boundless and bare

The lone and level sands stretch far away.^[4]'