40,000 families homeless due to benefit cuts - and no money saved...

[pointythings]

story in today's Guardian

I am just .

So what can we do to keep people in their homes, especially given that the majority of these families will be working families? How are low-paid jobs in places like London going to be done without penalising the people earning this low pay by forcing them to move away and incur huge travel costs? Are we ever going to have the house price readjustment that is needed so that people can live where they work, have sensible mortgages they can afford and are able to save a bit too?

Aaaargh, I wish I had some answers, I am feeling really depressed about this...

THC - She's not on job seekers, she's on the other thing (sorry, don't fully understand how it works). She's a single mum though, and luckily for her her rent will always be covered. She is in the benefit trap though.. can't earn more than minimum wage, would never cover her 2 bed flat rent if she wasn't on benefits. If she could work and pay £550 pcm then she could do it, but where she lives the rents have been bumped up by HA claimants (she is one and says this herself) she has no chance of renting even a small 2 bed flat in her area while on benefits. trap.

Catapult. I understand what you are saying and I can even agree that in some situations that homeless people would/could end up costing more.

BUT and it's a big but, that will only be in a minority of situations. The simple truth is that in MOST cases this simply won't happen as people will move and landlords will reduce prices as they can no longer chance the maximum in full knowledge that HB will cover it. In short, there will be a lot of pressure for prices to fall.

I actually manage the let on my mum's old house for her, so in theory I'm sort of a landlord. I do the management, she gets the cash....great deal for her! lol

I tell you one thing, its not as simple as oh all private landlords are milking it. Sure there will be some who are, just like there will be benefit cheats. The vast majority are simply trying to make a living. The amount of regulations, insurance and fees we have to pay make it incredibly difficult to make a lot of money. One bad tenant can leave you out of pocket for months. A tenant moving out and a void for a couple of months can easily cost you a grand. And that's before you factor in repairs and redecoration if your previous tenant trash the place.

So I promise you that if you are a good tenant and you go to your landlord and explain that your HB's been cut by £x that chances are, he/she will if they can reduce your rent if they can. Because they'd rather say lose £50 a month than lose £1000 per month if you moved. Even if there's a 1 month void, it will take them a bloody long time to recover that lost income and there's the added risk the next tenant trashes the place.

And as for the argument that where will these people live, there's also the argument...who is paying?

yes niceguy

There is the arguement that yoiu can say who is paying but end of day people will have to live somewhere and so that means somebody will have to pay .a potential 40,000 people is not a small group.And thats then without the cost to the tennat health and well being .Which will then cost more money

Yes you can say the taxpayers are paying.But then you have to consider those that are working on low wage and getting help with Hb are paying tax as well.

There is a lot more demand for rented accomidation nowadays as people can not afford to buy a house even when working and LL will every time take them over a HB tennat .

I am not against a cap but there needs to be flexibility in it as well ( yes I am looking after my dc whe i say that .I do not deny that if there was a flexibilty in it .I would have the council over a barrow in my case )

niceguy
I suspect that a lot of LL that take hb have multiple propertys as they are often the ones that can afford to take the risk of HB tennats as people do have a idea that HB claiments are going to trash their house or cause problems with the neighbours .My LL has 14 propertys I am the only Hb claiment he has ever had .

I I suspect I may quite possibly be able to negotiate with my LL as i know he struggled to let the property due to its location hence why he agreed to hb ( though i still had to pay a lot of money up front ) .Also he gets his rent every month inclduing the top up and I have not trashed the place.And I am caperable o politey negotiating with him not everyone is able to do that especially in areas where there is a lot of Hb claiments as they know that someone else will be desperate enough to top it up
But am also aware that he is struggling as property same site as his businness and that he is very possibily going to go under and have to sell up .

Jareth she may be on IS as a single parent if her childs under 7 but there will still be a cap at some point .

I am fortuante that I am currently exchanging letters with council and that at some point they will have to house me anyway and yes I am aware that it will be a hefty price to the taxpayer when they do.

Can i just say while i do disagree with posters to apoint it is nice to have a thread where no body has sunk to the level of name calling at each other.

MrsPles - I think maybe I'm missing a vital point here. I still don't get why ANYONE would need £500 a week of benefits, especially if you are working already and live outside of london? So am I right in thinking that you're talking about say people earning £10grand getting (wage equivalent) another £33 grand? I think I'm missing something here...

Jareth she will work 16 hrs and claim working tax credit which will then enable her to claim HB.

ensis - if you are a single working mother you are taken froom income support and given working tax credit. You can then claim all or some of your HB depending on i you have a high rental property or how many kids you have or if you have to pay towards the nursery which then may make your income smaller and hb cover the rent.

Emsies - LHA is not capped at £500/week, it is capped by area at different amounts depending on property size and eligibility.

If someone who is working, and receiving LHA in an area where there is already a discrepancy between actual rents and LHA amounts then has that LHA dropped by a further £50/week, what are they supposed to do?

LHA cuts are squeezing everyone who claims it, not just those out of work, and certainyl not just £500/week in benefits families.

To quote the article; "Our modelling indicates that we could see an additional 20,000 homelessness acceptances as a result of the total benefit cap. This on top of the 20,000 additional acceptances already anticipated as a result of other changes to the housing benefit. We are already seeing increased pressures on the homelessness services."

Only half of the proposed 40k homeless is due to the total benefit cap, the other half is due to the changes in LHA, presumably because those on a low income that are therefore entitled to LHA (no matter how much) can't just find an extra £50 a week from nowhere.

Ah yes hadn't thought about nursery alongside rent.

I'm still in mixed minds about the rent issue - we couldn't afford to rent a 3bed property on the edge of London on my husbands wage (neither could a lot of my, also well educated, nct group) and so it does seem unfair that some on benefits can (I'm more worried about those stuck in bnb accommodation or in dilapidated top floor flats).

I don't think instantly making someone homeless is at all the right thing to doat all - I don't know what the right thing to do is. But on the face of it someone on £33 grand equivalent (26,000 or £500 a week) of benefits is earning far more than most families which also doesn't seem fair.

emsis

There is going to be a lot more familes stuck in b&B which will cost even more .

I do not live in London or surburbs my rent compared to London is reasonable at £1200 a month .LHA now will cap that to 1000 for a 4 bed .It just does not exisit infact you will struggle to get a 3 bed around here for that.

Moving is just not a option

BUt isn't that the same for those who aren't in well paid jobs? We ended up having to move sadly and its been unbelievably difficult. A 3 or 4 bed house on the council is actually a good deal isn't it when many who work are stuck in flats.

I'm not saying they're at all going about it the right way (it sounds like they really aren't ) but I just don't get why in some areas people on benefits are living in 3 or 4 bed houses with gardens when lots of working people in the same area are stuck in flats with no garden, or are forced to move when rent changes/rises/ etc. That's my current beef in general - the entitlement to a 3/4 bed house or a flat with a garden in one place for years on end is just not there for those working on lowish incomes.

My problem is probably with high prices in general - it should really be a "given" that families can afford bedrooms for each sex, a garden for children to play in and security of tennancy but it seems to me that's more likely for some people on benefits than those working and renting. (Our flat was 900 a month, no garden, tiny bedrooms. Yes a house would have been more or a garden flat but we just couldn't afford it. We struggled to meet the 900.) Ideally it would be made "fair" with higher wages and lower housing but I can't see that happening either.

emsis

I told the council that i would take a 3 bed quite happily they refused it and will not pay hb at all if I move into a 3 bed as they will say that i have made myself over crowded ,

Ds1 and ds2 share ,dd has own room ds3 has to have his own room due to his sn ,.

so is not quite as straight forward as it seems

There is a lot of anti buy to let feeling on this thread. I am not a LL, nor likely to ever be one. However, I am aware that for many LLs, the decision as to whether to invest in a property, or in many of the other savings vehicles (PEPs, ISAs etc), is based on the return on the investment. They need not only to cover the mortgage, which may be only a small percentage of the value of the property, but also have a worthwhile return on their capital, compared to other investments and savings.

So to get a gross return on an investment of £500,000 of 5%, a rent of £25000 per annum would be charged, or just over £2k per month.

However, that isn't pure profit. Out of that the LL needs to pay for agency fees, management fees, repairs, maintenance, and insurance.

LLs are not just greedy capitalist bastards, (though some may be) but people investing their savings, or running a business and trying to make a living from it. If they are curbed too much, landlords will make the decision to stick their capital in a building society.

Then who will people rent from?

Butterbur but btl landlords do have advantage as over time the property will rise ,yes there be dips but also be rises

Plenty aren't even trying to run a business, plenty are just normal mums who couldn't sell their house when they needed to move house.

The benefit system and other government interference has caused the massive overinflation in house prices, so it has to be removed to put things right.

I think we will see less of the meteoric rises in house prices in the future, as the ability of buyers to finance their mortgages is eroded. Recent rises have been fuelled by both buyers' income being fully taken into account, and reckless lending by the banks. We have reached saturation point on the former, and the recession caused by risky lending will put paid to the latter.

Additionally, young people are going to come out of university already owing £40k of debt in student loans. They are not going to be able to get a mortgage at 26 like I did.

Buy to let landlords are going to have to rely on their rental income.

Which is why rents seem to be rising, the professionals who rented a two bed flat 5 tears ago want baby's now so house rents are on the increase, as long as rates remain low it's working but if interest rates rise I don't know what will happen to landlords and their tenants.

the falcon but the LHA cap cuts is going to cost the goverment more .So no savings will be made .

Ishani what will happen is people will juggle like crazy to keep roofs over their kids heads in most cases .Tennants will put up with the not so good LL in return for having somewhere to live and that includes unhealthy and sometimes dangerous conditions .

Here is an example of one of the BTL landlords on my estate.

My mam bought her house under the right to buy for £16k. When i bought it the house was valued at £125k. I bought it for £80k. Due to a split it was repossessed and went to auction. The BTL landlord bought it for £68k. He rents it out to HB tenants for £650 per month. He has at least 8 other houses next to me all rented out to HB claimants. The house is now worth approx £100k. Due to a huge lack of work in my area and big companies laying people off such as Komatsu/Nissan/Telewest/The Council many people are loosing their houses and no one can get mortgages.

My house was done from top to bottom so he has done nothing. I know as a friend of a friend is renting it. The other houses he does the bare minimum.

Forgot to add he rents them out for between £500 to £700 depending on what people can claim in HB.

Our council are trying to get plans in place regarding under occupancy in houses. I know of 4 houses where there is one elderly adult living in a 3 bed house. Over the road there are families living in 2 bed flats

Our council are trying to get plans in place regarding under occupancy in houses. I know of 4 houses where there is one elderly adult living in a 3 bed house. Over the road there are families living in 2 bed flats

Fifi - don't think you're unusual.
It would be much cheaper for yhe council to use the HB to buy the houses with, mortgages are lower than rents. At risk of stating the bleedin obvious - Rent Control! Don't cap HB when you won't cap rent.

Yes, nothing will ever change unless the council housing stock is replaced. The council are wasteing vast sums of money on HB which could be used towards new or bought back council stock for future generations.

Tackling the under-occupancy would also help a great deal IMO.