Government turns the screws on vulnerable tenants?

Government turns the screws on vulnerable tenants?

0:03 AM, 29th November 2024, About A week ago 4

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In 2007, the housing benefit rate for a three-bed home in Cleveleys, Lancashire was £520pm, today it is £623.30 or a 20% rise in 17 years.

The Bank of England kindly offers an inflation calculator which shows £523 in 2007 would cost £863 today, a rise of 65%. Goods and services have risen by three times more than the governments willing to pay for housing costs for people who find themselves in a position of need. As house prices have risen the problem has become chronic policy.

Next year the government has decided to freeze housing benefits again. Whilst this affects all who claim it affects areas more where there is a high proportion of housing benefit claimants and Landlords need to decide if they raise rents or effectively take another erosion to continue to provide a roof for a person living in the house who the banks refuse to lend directly to.

In the last three years, the Bank of England has deliberately put interest charges up nearly 3X their own affordability rules knowing they would put some landlords and homeowners under pressure while the government stood by failing to acknowledge or help those affected.

The continued policy is a disaster for housing benefit claimants being cruel and cynical.

While high interest rates are being paid to people with savings to protect them against inflation, people in need and borrowers are being asked to pay more.

Landlords who face higher costs may need to raise rents which will result in larger arrears and repossessions of housing benefit claimants’ homes.

There are people who genuinely need to claim housing benefits and the fear is the most vulnerable will find themselves homeless. A couple of years ago a homeless man died in a shop doorway in Cleveleys. This week another man died on the beach in Fleetwood.

If the government cares about vulnerable people there needs to be a policy to support them and not create pressures where loss-making landlords are left with little choice but to evict.

It really is difficult to write this but it needs to be said.

What does the Property118 community think about housing benefit rates and policy?

Paul


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Jo Westlake

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11:02 AM, 29th November 2024, About A week ago

There have been various issues in the period since 2007.
The main one was cutting LHA from the 50th percentile to the 30th in 2011.
In my area 2 bed LHA went from £650 to £585 per month. It's now £795 (22% more than in 2010).
The geographical areas LHA covers can be huge. 500 square miles where I operate.
The only properties that used to be reliably close to LHA rent were 25 miles from the main employment area. It was a straightforward choice of cheap rent and expensive travel to work costs or higher rent and lower (or no) travel to work costs.
Freezing already inadequate LHA for several years at a time has added to the problem.
It is incredibly hard to find property that could be let at LHA level rent. Maybe something with a short lease in need of full renovation or ex commercial with permission to convert? However, once it's up to standard and fully habitable there will be a queue of people willing to pay market rent for it.
I have got a few properties that are currently at LHA level rent. They were mainly bought in a dire state as repossessions, short leases or probate sales. Even that would be difficult now with the additional SDLT, very short period of Council tax exemption and much higher building costs.

Reluctant Landlord

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11:42 AM, 29th November 2024, About A week ago

I agree totally with what you have said, but it is far easier for those to pass on both the blame and problem to those down the chain to deal with.

Ergo...

"Landlords need to decide if they raise rents or effectively take another erosion to continue to provide a roof for a person living in the house who the banks refuse to lend directly to"

They don't regard letting as a business for tax purposes. We don't work. We are investors. But this investment by default is a provision of something which everyone needs - accommodation. Not just temp accommodation for pleasure (like a hotel or Air BnB for example) but long term. The service we provide is also personal and individual - it is on a one on one basis with the tenant.

The government know that investors pull out of deals very quickly if they feel the profit isn't there or risk to high, but with rentals they know that a LL may also feel a moral obligation to the person they provide the let of the rental too.

The idea the government is shafting the LL but the LL wont want to shaft the tenant. That's what they play on very, very well.

A true investor would be one that buys a property leaves it empty and watches the asset appreciate. (that encapsulates the category they define as a person 'not working').

A Landlord who wants to invest (for asset appreciation at a later date to cash in and retire on for example) BUT needs the rent income to support the finance - they see (and so does the tenant), wants it both ways.

That's where the politics of envy comes in and exactly why the government is quite happy to keep at the forefront. Section 24, The RRB - all part of the same crib sheet.

They have no real intention or desire to home anyone themselves - why would then when they have a sitting ducks they can blame when a crisis hits?

The PRS as we know it reduces? So what, this means more people are buying for themselves (more tax etc). Build to rent take over? So what, all that means is more tax and a replacement scapegoat.

It's never ever been about tenants for the government, never has been and never will be. The rest is just noise.

So landlords play this game your own way. If what you do world for YOU then stay in. If it doesn't, then either adapt so it does, or cash in and move on.

TheMaluka

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12:19 PM, 29th November 2024, About A week ago

Reply to the comment left by Jo Westlake at 29/11/2024 - 11:02
I would add the ever-increasing standard demanded by government regulations, which in my case has increased rents by 20%. I dare not let a flat that is anything less than perfect with a new bathroom and kitchen, the days of cheap rent and a dated but working bathroom are long gone.

Cider Drinker

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22:46 PM, 1st December 2024, About 5 days ago

My rents range from 9% below LHA to a massive 27% below LHA.

I increased rents this year by 15% and will increase them again next year, probably by less than 10%.

My tenants would not be able to find somewhere cheaper without losing one or two bedrooms.

I estimate that my properties should be around the 40th percentile of rents. They’re currently cheaper than anything available on RM.

It’s been a bad year this year. The cost of fixing a property wiped out around 30 months worth of rent.

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