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Councils ‘ripped off’ by private landlords. They spend almost £1bn a yr on temp. housing

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Wait, I know - here's an idea: get rid of all types of housing benefit.  That way, the councils won't be "ripped off" by anyone.

Oh, gee, no, I forgot - the people who complain about this are the scroungers who can't afford to buy or rent. Ripped off? The landlords should get medals for agreeing to house people on benefits...

I liked this part though:

Quote

“I used to love Hackney,” she said. “But the gentrification is disgusting. Hackney is now more or less a white borough and it never was before. It was so multicultural. Now all you’ve got is these really expensive trendy bars, loads of twentysomethings with endless disposable income.”

 

It's Schrödinger's millennial: depending on article, they're either too poor to eat or have endless disposable income.

Edited by flb

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34 minutes ago, flb said:

Wait, I know - here's an idea: get rid of all types of housing benefit.  That way, the councils won't be "ripped off" by anyone.

Oh, gee, no, I forgot - the people who complain about this are the scroungers who can't afford to buy or rent. Ripped off? The landlords should get medals for agreeing to house people on benefits...

I liked this part though:

“I used to love Hackney,” she said. “But the gentrification is disgusting. Hackney is now more or less a white borough and it never was before. It was so multicultural. Now all you’ve got is these really expensive trendy bars, loads of twentysomethings with endless disposable income.”

 

It's Schrödinger's millennial: depending on article, they're either too poor to eat or have endless disposable income.

have the level of stabbings gone down though in that borough ?

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39 minutes ago, longgone said:

have the level of stabbings gone down though in that borough ?

1. Go to https://images.google.com

2. Search for "hackney stabbing" (with or without "", as you prefer)

3. Re-read this part:

Quote

Hackney is now more or less a white borough and it never was before. It was so multicultural. 

4. ????

5. ??????????

6. wtf.png.03ab5aeb1463697d8f82b13201711ecd.png

7. Re-read this part:

Quote

it never was before

henry.jpg.63c233e3ab7b0e8021c87677cbde7782.jpg

Edited by flb

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4 minutes ago, flb said:

1. Go to https://images.google.com

2. Search for "hackney stabbing" (with or without "", as you prefer)

3. Re-read this part:

4. ????

5. ??????????

6. wtf.png.03ab5aeb1463697d8f82b13201711ecd.png

sorry i was reading into the "gentrification" statement usually that means there is more money in the area richer area`s usually have higher levels of burglary`s and less violent crime. 

 

 

 

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4 minutes ago, longgone said:

"gentrification"

What that means is that they're still going to stab you, but they're going to do it in a hip manner while listening to indie bands using Beats headphones. If you're really lucky, they might take a selfie with your body or they might do a Fortnite dance afterwards or something.

Edited by flb

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1 minute ago, longgone said:

https://en.wikipedia.org/wiki/Gentrification

 

what it means is no gentrification has taken place. 

I know what it means, mate. I'm simply taking the piss - I live fairly close to Hackney and it's a shithole.

I'm guessing the "white borough" thing happens at night. They're probably vampires, because you sure as hell can't see many of them during the day.

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5 minutes ago, flb said:

I know what it means, mate. I'm simply taking the piss - I live fairly close to Hackney and it's a shithole.

I'm guessing the "white borough" thing happens at night. They're probably vampires, because you sure as hell can't see many of them during the day.

ok i will avoid that area then 😄

don`t wanna stick out like a sore thumb.  

i think they mean shoreditch end i agree the rest is a dump. 

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Hackney’s big. There are nice parts (yes, I like gentrification, I like nice pubs and good coffee and that pleasant not-being-stabbed feeling) and there are plenty of #classichackney places still, usually only 2 blocks away. 

Anyway, back to topic: why do we have so many people who need temp housing? What’s gone wrong? What’s the breakdown of who these people are? 

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6 hours ago, longgone said:

ok i will avoid that area then 😄

don`t wanna stick out like a sore thumb.  

i think they mean shoreditch end i agree the rest is a dump. 

The anger is against hipsters, who are all perceived to have wealthy parents who finance them

As a paid up member of the white working class you are the salt of the earth and welcome to come.

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4 hours ago, PeanutButter said:

Anyway, back to topic: why do we have so many people who need temp housing? What’s gone wrong? 

I can tell you what went wrong.

I rent, but I also own elsewhere, so I see both sides of the problem.

The government is changing the way they tax income in what concerns letting out your property. Of course, that means higher costs for landlords. As a result, quite a few landlords are raising rents.

When I was looking for a tenant, the average rent for a house like the one I bought was around 700. Then those changes took place and rents went to 900-1000. A similar thing happened in London, of course (paying 1500 pcm for a 2 bed flat now).

Higher costs for landlords + inflation + weak pound -> higher rents. As a landlord, you can't "just" ask your tenant to start paying 300 extra each month. So your only option is to kick them put and market your property for 300 more.

I'm going to do the same thing this year. The contract I've got with my tenant means I couldn't raise the rent by more than 50 pcm. So if I am to raise it to 1100 (plenty of properties in my area are going for that), I have to give them notice and get a new tenant. Of course, this is sonewhat "unfair" to the tenant. But then again, it's unfair for the government to tax my rental-derived income the way it does. So ..

A number of landlords are probably p doing the same thing, so quite a few people end up needing temporary accommodation. 

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5 minutes ago, flb said:

I can tell you what went wrong.

I rent, but I also own elsewhere, so I see both sides of the problem.

The government is changing the way they tax income in what concerns letting out your property. Of course, that means higher costs for landlords. As a result, quite a few landlords are raising rents.

When I was looking for a tenant, the average rent for a house like the one I bought was around 700. Then those changes took place and rents went to 900-1000. A similar thing happened in London, of course (paying 1500 pcm for a 2 bed flat now).

Higher costs for landlords + inflation + weak pound -> higher rents. As a landlord, you can't "just" ask your tenant to start paying 300 extra each month. So your only option is to kick them put and market your property for 300 more.

I'm going to do the same thing this year. The contract I've got with my tenant means I couldn't raise the rent by more than 50 pcm. So if I am to raise it to 1100 (plenty of properties in my area are going for that), I have to give them notice and get a new tenant. Of course, this is sonewhat "unfair" to the tenant. But then again, it's unfair for the government to tax my rental-derived income the way it does. So ..

A number of landlords are probably p doing the same thing, so quite a few people end up needing temporary accommodation. 

Oh I'm aware of the tax situation for landlords. I'm just surprised there's enough demand from tenants to keep this cycle up. The areas I monitor in London are not showing rental price increases at all, quite the reverse. I know a family moving from a 2 bed to a 3 bed rental for the same price in the same area because it's fallen so much.

Not convinced the temp housing crisis is related landlords paying more tax tbh. 

 

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11 minutes ago, PeanutButter said:

Oh I'm aware of the tax situation for landlords. I'm just surprised there's enough demand from tenants to keep this cycle up.

I'm both - a landlord and a tenant.

There is plenty of demand. People haven't magically decided to sleep in caves and hundreds of thousands of cheap rentals haven't magically popped up.

These things are connected - lower demand in some areas exists because people in those areas suddenly have to beg councils for temporary accommodation.

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4 hours ago, prozac said:

The anger is against hipsters, who are all perceived to have wealthy parents who finance them

As a paid up member of the white working class you are the salt of the earth and welcome to come.

not working 

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24 minutes ago, flb said:

I'm both - a landlord and a tenant.

There is plenty of demand. People haven't magically decided to sleep in caves and hundreds of thousands of cheap rentals haven't magically popped up.

These things are connected - lower demand in some areas exists because people in those areas suddenly have to beg councils for temporary accommodation.

:D I'm a landlord too (thanks dead parents). 

And I ain't jacking up rents on my tenants any time soon. They're nice and clean and solvent. 

Here's some stats to back me up. https://data.london.gov.uk/housingmarket/

 

Quote

 

Prices

  • In June 2018, the average house price in London was £475,000 (See chart, ONS, seasonally-adjusted)
  • This is a decrease of 1% on one year ago, and is the lowest level of price growth in an English region over that period.

House-Prices-300x191.png

Rents

  • Private rents in London fell on average by 0.3% in the year to July 2018. Private rents increased by 1.6% in the rest of England (See chart, ONS).
  • London had a lower rate of growth in private rents than any other English region.
  • Annual private rent increases in London have been below annual wage increases for more than a year (ONS). Private rent increases have also been below the rate of Consumer Price Inflation for over a year (ONS), as indicated by the red line in the chart.

Rents-300x191.png

Landlord and mortgage claims/repossessions

  • 10,300 rented homes were repossessed by court bailiffs from private or social tenants in London in the year to June 2017 (MOJ). This is 23% fewer than the previous year.
  • 360 mortgaged homes were repossessed, an increase of 12% on a year earlier (MOJ).

 

https://www.onthemarket.com/content/rental-market-will-happen-2018/

Quote

In central London, despite the shortage of supply in relation to demand, rents have fallen by around three per cent in the past 12 months which mirrors the similar fall in property values.

Maybe you just own a property in a hot area? 

But we had a homelessness problem before the landlord tax increases, so it still doesn't explain it. 

Edited by PeanutButter

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5 minutes ago, PeanutButter said:

Maybe you just own a property in a hot area?

I do 

5 minutes ago, PeanutButter said:

But we had a homelessness problem before the landlord tax increases, so it still doesn't explain it. 

Oh, no. I was merely referring to the temporary accommodation thing.

5 minutes ago, PeanutButter said:

And I ain't jacking up rents on my tenants any time soon

Meh. I don't want the new tenant headache either, but if the government wants more, someone has to pay for that - and I'm not feeling very altruistic at the moment.

It's a bit ironic, though. The government demands more from landlords. So the landlords have to pay more in tax. So of course they raise rents. So of course tenants require temporary accommodation. And who pays for that...?

Torynomics? :)

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2 hours ago, PeanutButter said:

:D I'm a landlord too (thanks dead parents). 

And I ain't jacking up rents on my tenants any time soon. They're nice and clean and solvent. 

Here's some stats to back me up. https://data.london.gov.uk/housingmarket/

 

https://www.onthemarket.com/content/rental-market-will-happen-2018/

Maybe you just own a property in a hot area? 

But we had a homelessness problem before the landlord tax increases, so it still doesn't explain it. 

Have we become a landlord forum 

like 2 legs good 4 legs better

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8 hours ago, PeanutButter said:

Hackney’s big. There are nice parts (yes, I like gentrification, I like nice pubs and good coffee and that pleasant not-being-stabbed feeling) and there are plenty of #classichackney places still, usually only 2 blocks away. 

Anyway, back to topic: why do we have so many people who need temp housing? What’s gone wrong? What’s the breakdown of who these people are? 

Sometimes relationship breakdown I would guess.

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This place seems to mirror the likes of the property 118/tribes forums nowadays.

Thatcher created a time bomb when she gave the green light to sell off council housing in the 80’s. This in turn created an unprecedented outcome decades later with privately owned ex-council properties in previously unfashionable/crime ridden London suburbs suddenly making the owners millionaires.

This was a toxic mix with ‘Emergency low’ interest rates since 2008, and QE sloshing around for cheap credit and ‘investors’ weighing in and over leveraging themselves for BTL chasing yields. 

With a rising population and an increasing demand for social housing as prices spiral out of reach this was inevitable, but BTL landlords are not doing anyone a favour. The tax changes should have been introduced way before the situation became too big to handle. The fallout from another financial downturn (which is already here) will be catastrophic.

As a BTL landlord you cannot simply ‘raise rents’ and pass on costs to tenants. The landlords with the lowest leverage (the ones who own outright) and the housing benefit allowance will dictate the market rate, not the kite flyers trying to stay solvent.

Edited by sideysid

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2 hours ago, sideysid said:

As a BTL landlord you cannot simply ‘raise rents’ and pass on costs to tenants.

I don't see why not. 

Like I said, I'm a landlord and a tenant (I bought my house in one area; life/my job got me to move to another area, where I'm currently renting; I'll be out of here as soon as I hit a certain number)

I fail to see why I couldn't "simply" ask for more. Rents in my area were 600-700. I put my house on the market for 900 pcm. I probably had over 12 couples visiting over 2 days. Some of them offered 1000 outright just to make sure they'd be the ones to get it (I should mention that the house is in a good area - beautiful scenery, close to schools etc; no, I'm not advertising here).

That was last year. Rents in my area are now getting to 1100, with one owner asking 1200 for his property.

What you don't seem to understand is that some people will pay for quality. Of course, not everyone will - some people will look for the cheaper version. That's perfectly fine, I don't own a Lamborghini and I can't understand why people would pay that much for that car. But then again, the guys who make it don't care about me. 

2 hours ago, sideysid said:

and the housing benefit allowance will dictate the market rate

Not in the way you think.

I, for example, would never take a tenant who was on benefits, so that has nothing to do with me. 

What that actually does is...well, it inflates the prices, because most landlords will not take people on DHSS or whatever it's called nowadays. So decent properties will go to decent people. That leaves a number of less desirable tenants "out there" who require some sort of accommodation. Councils will probably pay for hostels and b&b and such, but in the end that "homeless" person will just have to try to get a property "from the market". Because landlords won't bother with you if you're on benefits, you'll have to settle for whatever you can find (damp, run down etc). Of course, the owner of the hellhole will ask for more because he knows you're not in a position to argue and the council will pay some of it at least.

If that's what you're talking about, yes, housing benefit influences (not "dictates") the market rate. That's because when a hellhole goes for 800 pcm, a decent house will go for 1200. It's that simple.

2 hours ago, prozac said:

Have we become a landlord forum 

 

Naturally. 

People whine about the housing market for a few years, but eventually they all have to buy something (unless they're prepared to still rent a place when they're retired). I did the same thing. I didn't REALLY want to buy (not complaining, it was a good call), but having a wife and children AND in-laws visiting certainly helps one decide...It's all good while you're in your 20s and single, but past a certain age/stage...

When I rented this property, one of the questions I was asked was whether I had children. Another question was whether I had any pets. Eventually you get tired of not being able to rent a nice place because the landlord doesn't want to risk having his property damaged by children/animals, you get sick of not being able to make a change, of not being able to make a home "your own"... and then you buy something. At least that's what happened to me. 

Edited by flb

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Selling off council housing and not replacing it contributes to housing and rent in general becoming  more expensive, which means the council's social housing costs go up. Councils ripped themselves off.

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20 minutes ago, Arpeggio said:

Selling off council housing and not replacing it contributes to housing and rent in general becoming  more expensive, which means the council's social housing costs go up. Councils ripped themselves off.

Selling the housing stock wasn't their call, though, as far as I know. 

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56 minutes ago, flb said:

Selling the housing stock wasn't their call, though, as far as I know.  

I expected it to be optional for councils so they could make their own judgements according to their knowledge of local needs but I was wrong to assume some kind of sense, when in reality it is about politics and greed.

So it appears to be a central policy and also a compulsory one, councils could not refuse.

Councils have bought back houses they had been forced to sell, sometimes at a much higher price they had originally sold it for. 36% of homes sold under Right to Buy in London (52,000 homes) were being rented by councils from private landlords.

With references: https://en.wikipedia.org/wiki/Right_to_Buy

Scotland have ended RTB and Wales are ending it soon.

Ironic how RTB is supposed to "help less well off" while the places that are against RTB have less expensive housing. The road to hell is paved with "good intentions".

Edited by Arpeggio

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I think it was tenants right to buy at a discount, so nothing councils could do to stop selling their best stock at a discount. I also believe there was legislation preventing them spending the money received building new council stock.  I know the labour party started right to buy in 70s, but implications of tories promoting and extending it were very clear. 

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