Benefit capping

sketchley

Example of what £400 a week gets you http://www.rightmove.co.uk/property-to- ... 73717.html not exactly in the stick either.

rjsterry

I think a lot of those 79 pages are under £400pcm for a room within a house share. Rightmove's search facility is a bit cockeyed as it lumps rooms to rent within a 4-bed house in with whole 4-bed houses. But we're digressing. You have a lot more faith in the London rental market than I do.

W1

notsoblue wrote:

Yeah, lets trust the market to bring down rents in London.

Hah!

If people's ability to afford the rent is also down, because it is now capped when it wasn't before, what else do you think will happen?

And if they don't, shall we just keep paying artificially inflated rents at taxpayer's expense to continue (failed) social engineering?

rick_chasey

W1 wrote:

notsoblue wrote:

Yeah, lets trust the market to bring down rents in London.

Hah!

If people's ability to afford the rent is also down, because it is now capped when it wasn't before, what else do you think will happen?

And if they don't, shall we just keep paying artificially inflated rents at taxpayer's expense to continue (failed) social engineering?

Anything the gov't does is social engineering (that's the point) but anyway.

I'd suggest the restriction of supply of housing coupled with rising population means rents won't come down in London any time soon.

We had a massive housing crash after the bubble burst in late '08 and they still went up in London.

TheStone

40% of the rental market in London is housing benefit, so if it reduced/disappeared, rents would of course drop.

rick_chasey

TheStone wrote:

40% of the rental market in London is housing benefit, so if it reduced/disappeared, rents would have course drop.

Is it really that much?!?!

TheStone

Rick Chasey wrote:

TheStone wrote:

40% of the rental market in London is housing benefit, so if it reduced/disappeared, rents would have course drop.

Is it really that much?!?!

Yep, but not all of that 40% of rentals are fully paid. Sometimes just a proportion. I'll try and dig out some details.

rjsterry

TheStone wrote:

Rick Chasey wrote:

TheStone wrote:

40% of the rental market in London is housing benefit, so if it reduced/disappeared, rents would have course drop.

Is it really that much?!?!

Yep, but not all of that 40% of rentals are fully paid. Sometimes just a proportion. I'll try and dig out some details.

using the 0% figure and my 215,000 claimant households, that would mean the rental market is around 540,000 properties. Sounds a bit low to me, but depends what you define as London - all the boroughs?

W1

Rick Chasey wrote:

W1 wrote:

notsoblue wrote:

Yeah, lets trust the market to bring down rents in London.

Hah!

If people's ability to afford the rent is also down, because it is now capped when it wasn't before, what else do you think will happen?

And if they don't, shall we just keep paying artificially inflated rents at taxpayer's expense to continue (failed) social engineering?

Anything the gov't does is social engineering (that's the point) but anyway.

I'd suggest the restriction of supply of housing coupled with rising population means rents won't come down in London any time soon.

We had a massive housing crash after the bubble burst in late '08 and they still went up in London.

You'd expect a "massive housing crash" to lead to an increase in renting as people sell and wait, or have their homes repossessed.

But I'd expect a contraction in the spending power of a decent chunk of London tenants to bring rents down, yes.

DonDaddyD

W1 wrote:

notsoblue wrote:

Yeah, lets trust the market to bring down rents in London.

Hah!

If people's ability to afford the rent is also down, because it is now capped when it wasn't before, what else do you think will happen?

Foreigners coming in and paying extortionate prices because they think "that's what you pay to live in London".

I firmly believe that the large Aussie and Kiwi community in Clapham < Balham/Tooting> Wimbeldon are a contributing factor in keeping those prices so high. Rent a 2 bedroom flat. Turn the living room into another bedroom so that Sheila and Boyd can live there too for a nifty £1100 - £1300 per month. Suddenly all the other 2 bedroom properties in the area (even if being used by legitament 2 bed family) are increased to that price.

Also deluded out of London folk coming into London to buy/rent at stupid prices because you know "that's what you pay to live in London".

It's partly a self perpetuating perception.

notsoblue

DonDaddyD wrote:

W1 wrote:

notsoblue wrote:

Yeah, lets trust the market to bring down rents in London.

Hah!

If people's ability to afford the rent is also down, because it is now capped when it wasn't before, what else do you think will happen?

Foreigners coming in and paying extortionate prices because they think "that's what you pay to live in London".

I firmly believe that the large Aussie and Kiwi community in Clapham < Balham/Tooting> Wimbeldon are a contributing factor in keeping those prices so high. Rent a 2 bedroom flat. Turn the living room into another bedroom so that Sheila and Boyd can live there too for a nifty £1100 - £1300 per month. Suddenly all the other 2 bedroom properties in the area (even if being used by legitament 2 bed family) are increased to that price.

Also deluded out of London folk coming into London to buy/rent at stupid prices because you know "that's what you pay to live in London".

It's partly a self perpetuating perception.

+1, thats exactly the situation. Theres a constant flow of new, aspirational, tenants coming into the market. Many people will only live in central-ish London for a couple years to establish their career and then eventually move further out or away from London entirely to somewhere more affordable when spending 30-50% of your salary on rented accommodation is not longer sustainable.

notsoblue

W1 wrote:

notsoblue wrote:

Yeah, lets trust the market to bring down rents in London.

Hah!

If people's ability to afford the rent is also down, because it is now capped when it wasn't before, what else do you think will happen?

And if they don't, shall we just keep paying artificially inflated rents at taxpayer's expense to continue (failed) social engineering?

Well, the social engineering only failed because a load of social housing was sold off to housing associations under right to buy... If the government was the landlord instead of just the sugar daddy, then the situation would be different.

sketchley

I'd still argue that those same aspiration tenants coming on the market and aware of the cap on HB are then unlikely to pay more than the cap as it'll be seen as the maximum going rate.....

DonDaddyD

Sketchley wrote:

I'd still argue that those same aspiration tenants coming on the market and aware of the cap on HB are then unlikely to pay more than the cap as it'll be seen as the maximum going rate.....

If there was a rent cap in London like there is in America (New York I think) then that would be common knowledge and randoms (foreigners/out of London folk) would be aware of that as it would become word of mouth (common) knowledge. (Like the notion of common law husband and wife - no such thing. And that it is illegal not to have a toilet in a restaurant - again completely inaccurate common knowledge).

Widespread knowledge of a housing benefit cap I highly doubt would ever become wide spread common knowledge amongst people who have no interest in ever applying for said housing benefit or are never likely to be eligible for such a thing.

Hell, I didn't even realise it was so high or if I would eligible if I lost my job until the subject was raised as part of a political debate/election manifesto.

notsoblue

Sketchley wrote:

I'd still argue that those same aspiration tenants coming on the market and aware of the cap on HB are then unlikely to pay more than the cap as it'll be seen as the maximum going rate.....

I think it will take a long time for that feedback process to happen though. You simply don't see large numbers of rental properties sitting empty because they're too expensive. I've seen a year on year increase in the cost of renting since I moved to London in 2005. Any house I've stayed in has always had a yearly inflationary increment in rent.

Meanwhile, all my mates who live in lovely places like Bath are all buying mansions* with mortgages almost half my rent. Still though, they don't have the embankment...

*exaggeration

sketchley

notsoblue wrote:

W1 wrote:

notsoblue wrote:

Yeah, lets trust the market to bring down rents in London.

Hah!

If people's ability to afford the rent is also down, because it is now capped when it wasn't before, what else do you think will happen?

And if they don't, shall we just keep paying artificially inflated rents at taxpayer's expense to continue (failed) social engineering?

Well, the social engineering only failed because a load of social housing was sold off to housing associations under right to buy... If the government was the landlord instead of just the sugar daddy, then the situation would be different.

Interesting you bring that up, find me one housing association 4 bedroom house, anywhere in the country, that costs £400 per week to rent. Housing association rents are already capped and they are not free to charge what they wish it is strictly controlled. Also on a technicality I'm pretty sure housing associations did not and do not buy properties under right to buy scheme as only the tenants can do that.

notsoblue

Sketchley wrote:

Interesting you bring that up, find me one housing association 4 bedroom house, anywhere in the country, that costs £400 per week to rent. Housing association rents are already capped and they are not free to charge what they wish it is strictly controlled. Also on a technicality I'm pretty sure housing associations did not and do not buy properties under right to buy scheme as only the tenants can do that.

Who do the tenants sell to?

rick_chasey

http://www.guardian.co.uk/society/2012/ ... ral-london

In Westminster, the borough most affected by the housing benefit cap, some schools could see up to 43% of pupils affected by the reduction in housing benefit, according to the council's preliminary forecasts, and across the borough 17% of primary pupils could be forced to move, internal data suggests.

Although the process is only just beginning, headteachers and school governors are concerned at the disruption and say that the process of trying to support families who face losing their homes is proving time-consuming for staff.

DonDaddyD

There would be some social/personal upheaval, yes.

rjsterry

notsoblue wrote:

Sketchley wrote:

Interesting you bring that up, find me one housing association 4 bedroom house, anywhere in the country, that costs £400 per week to rent. Housing association rents are already capped and they are not free to charge what they wish it is strictly controlled. Also on a technicality I'm pretty sure housing associations did not and do not buy properties under right to buy scheme as only the tenants can do that.

Who do the tenants sell to?

Some social housing was transferred to housing associations, but you are thinking of right-to-buy owners selling to private landlords, who then let back to people being housed by the council.

notsoblue

DonDaddyD wrote:

There would be some social/personal upheaval, yes.

But DDD, it affects those of your ilk!

notsoblue

rjsterry wrote:

notsoblue wrote:

Sketchley wrote:

Interesting you bring that up, find me one housing association 4 bedroom house, anywhere in the country, that costs £400 per week to rent. Housing association rents are already capped and they are not free to charge what they wish it is strictly controlled. Also on a technicality I'm pretty sure housing associations did not and do not buy properties under right to buy scheme as only the tenants can do that.

Who do the tenants sell to?

Some social housing was transferred to housing associations, but you are thinking of right-to-buy owners selling to private landlords, who then let back to people being housed by the council.

Yep. Another case of the private sector skimming money from the public sector.

First.Aspect

DonDaddyD wrote:

If there was a rent cap in London like there is in America (New York I think) ...

Widespread knowledge of a housing benefit cap I highly doubt would ever become wide spread common knowledge

Its in a few N American cities, actually. But totally pointless in all of them because it is easily circumvented by atttributing additional costs to anything other than square footage.

Widespread knowledge of housing benefit (and other benefits) is already very well known DDD. If you ever rent a place out using an agent, one of the first things they ask is whether you will take DSS tenants. Then they tell you what the limit is for DSS tenants for an n-bedroom place in that area. Well, okay perhaps not if you are renting in Little Chalfont or somewhere like that.