In hoping the benefits cap may prove to be A Good Thing?

[thepeoplesprincess]

In the long run. For private renters anyway.

As things currently stand, private landlords are getting away with charging extortionate rents that few can afford because the shortfall is made up by Housing Benefit. So if benefits are to be capped, landlords will (hopefully) be forced to lower their rents to affordable levels or sell up if they can't find tenants that can and will pay hundreds of pounds a month. Either will be great for the average Joe IMO.

And YY to deposit although if someone is already in a house wher ethe tenancy has ended it should not be such an issue- and our council does a deposit loan scheme for this reason.

peachy - yes but a working couple not on HB, without kids, wouldn't have any chance of getting a LA property, so it wouldn't come into the equation. our current tenant went on HB part way through the contract and has been an excellent tenant for years .

Why without kids? I know several people with kids who have gone from private rented into LA housing, we would probably need to as DH hasn't been self employed long enough to satisfy the Agencies around here.

There's a lot of talk about greedy landlords setting rents at whatever levels they want and rubbing their hands with glee as they rent their places out to HB tenants

If anyone is interested in hearing from my side of the fence (greedy landlord I guess) I can tell you that this doesn't actually happen because ...

1. the council already sets the max HB at the 30 percentile of all available rents on the market in the local area (this means the rent is less than the mean based on number of bedrooms if you look in the local paper).
2. The rents are set by market forces and the fact that they are expensive is because everything is getting expensive (inflation), and due to more people renting (population rising, mortgage criteria due to credit crunch), low housing stock (no one is building any houses), and that we are a small overcrowded island more densley populated than most countries.
3. And Landlords aren't mad on HB tenants as demonstarted by posters who are on HB on this thread stating that Landlords aren't interested in them once they know they are on HB.
4. If it was such a goldmine renting to HB you'd have loads of people jumping on the bandwagon and doing it. And then you'd have more competition, laws of supply and demand etc meaning rents begin to fall.
5. The fact that most agents have a blanket policy of 'no HB'. This means there must be good financial reasons for tuning HB business away which indicates no instant gold mine.

Yes, I am a Landlord but I don't actively target HB tenants because there just isn't that much money in it (but I don't discriminate either).

PS have you seen the price of petrol those greedy petrol station people are charging, and the price of bread that the greedy bakers are charging, and the price of a glass of wine those greedy pubs are charging these days.

Elli wrt to Agencies, usually it's their insurers that demand no HB (we have also been landlords in the past and that' what we were told)

PS have you seen the price of petrol those greedy petrol station people are charging, and the price of bread that the greedy bakers are charging, and the price of a glass of wine those greedy pubs are charging these days

Oh come on, be reasonable. You can't begin to compare the :"greed" of bakers to the greed of private landlords. I have a choice to use a bakery- I could bake my own bread otherwise, and any profit the baker makes from my custom will be ar;ound 40p a week after (s)he takes way business expenses and wages.

Whereas private landlords sit on their backsides, making literally hundreds of pounds a week in profit off of the backs of the hard work of people who have no choice but to rent from them if they can't find a cardboard box big enough.

It really isn't the same. And no offence, but you and your lot will be first against the wall when I'm elected president.

peachy - sorry didn't explain very well. if someone in our area is working but doesn't have kids they are unlikely i think to qualify for HB and most certainly would be way down the LA housing list. we like renting to people who aren't on HB with kids as they don't have wild parties and keep the place clean. but people who are on HB with kids may qualify for LA accommodation and i think would be encouraged by the council to stay on till we had taken them through the full eviction process which takes forever. I know this might sound hartless, but like many people we work hard and this is our pension.

thepeople - as people have said on this thread previously landlords are not earning hundreds of pounds a week profit. 6 years ago, when we first started, we made a small loss each month after expenses, and that was assuming the place was fully rented and the tenants caused no damage. yes we make some profit now, but thats only because interest rates are at an all time low and we currently have good tenants. you could easily be £10k + out of pocket if you had a bad tennnt and that would take you 3 or 4 years to recoup assuming the interest rates were low.

Of course you're making hundreds of pounds in p;rofit because at the end of it you'll end up with 200k worth of property you haven't paid a penny towards, whilst the poor sods that have paid your mortgage for you will end up with nothing but an Ikea coffee table.

You wouldn't do it otherwise.

So where's my 200k property? I haven't done a thing but apparently you dont have to

thepeople - if after 25 years property prices have gone up, then i will have made the difference between the purchase and sale price - minus 25% capital gains tax (and of course other taxes such as income tax). In the meantime, we are just about breaking even.

how come you know so much about this then? are you a more successful landlord than us?

Average house price 25 years ago, Q3 1986: £39,593.
Average house price, Q3 2011: £166,597
Difference: £127,004
Not bad for an investment on which somebody else makes your repayments.
Your rental income would have risen dramatically over the 25 years while your mortgage didn't, so you'll be looking at a sizeable monthly profit for at least half that period, on top of your growing asset.

"Of course you're making hundreds of pounds in p;rofit because at the end of it you'll end up with 200k worth of property you haven't paid a penny towards,"

I have an investment property on a buy-to-let mortgage. This required a 25% deposit. While the interest payments are tax deductible, the actual capital value of the loan is not. It has operated at a loss every year. The only year it made a mega loss was the one time we accepted HB tenants (they unfortunately did not choose to hand over their HB to us, never paid a penny of rent and it took us over six months to evict them).

I take a commercial risk. It has cost me a substantial amount. It is a complete myth that i will end up with a £200k property that I have not paid a penny for

'Sorry £35K is way too low to stop CB.For many people on that bracket it's the difference between heating and not.I'm no expert but I would have thought £60 K would be better.Far more likely to not be a serious impact on all families and they wouldn't need to pay to means test it.'. A quote from MrsHeffley on pg4.

So it's NOT OK to stop CB for people with a pre-tax income of £35k who work, but it IS OK to stop CB for people who get £26K on benefits???

Which is basically you saying that you can only have dc and live without being in poverty if you can get a job that pays you that amount. . Who the FUCK are you to decide who can and can't have a child or children?! Is the person who clears away your bin bags every week not allowed to have dc, or at least, not allowed to get CB for them? What about the person who pushes your bed from the maternity ward to the theatre when you have a c-section? Or the person who cooks your dinner for you to eat while you are convalescing? Or the person who serves you when you are buying your food?

And if they all have to move to 'cheaper areas', then WHO IS GOING TO BE LEFT TO DO THOSE JOBS.

I don't know of ANYONE that can still eat and stay alive if they earn £45 before tax a day, yet has £50 to pay to travel TO work. So at some point, THERE WILL BE NO-ONE LEFT IN THE 'EXPENSIVE' AREAS TO DO THOSE FUCKING JOBS.

Never mind. You can all push your own fucking hospital beds, and cook your own food post-op, and pick up your own fucking rubbish.

Going back to MrsHeffley's quote - If it is the difference between heating or not to someone on an income of £35k - then surely it is the same for someone receiving benefits of £26k? Not that hardly anyone WILL be getting £26K, due to the way that Universal Credit is worked out.

Calculation for Universal credit is based on certain allowances. It basically combines most of the current benefits system, for those IN work and out of work. Some with disabilities that have been classed as incapable of ANY work, or a VERY limited capacity to work. And those people caring for them.

Universal Credit at it's most basic, for those who are unemployed, will be made up of certain 'elements', in much the same way as Tax Credits are.

There will be an allowance that matches the current level of Jobseekers allowance - a 'personal allowance' of £67.50 for a single person, or £105.95 a week. Then there is a 'dependent' element of £2,555 a year for each of the first 4 dependent children (even if you have more children). So even for a couple with 4 dc, the MOST they could receive is £5,509.40 for the adults and £10,220 for the children. A total of £15,729.40 a year.

Then you get a 'housing costs element'. This is dependant on a number of factors: Where you live, and what the LHA for your area is. This is based on LHA covering the rent on just 30% of the properties in your area. Even though they will already be inhabited by OTHER PEOPLE. It's NOT set on 30% of the available properties, but 30% of ALL the properties that size in your area. 3-bed private rent in my area? £900+pcm. LHA in this area for a 3-bed? Currently £679.98 monthly. Which is £8,159.76 a year. Added to your previous total is £23,889.16. (Your rent still COSTS £900 though, cheapest private house that was AVAILABLE that would accept HB)

Then they look at your child benefit. This couple have 4 dc, so would receive £60.50 a week Child benefit. Or £3,146.00 a year.

Add this to their personal allowance, dependants allowances and Housing element. A total of £27,035.16. Hang on - that's over the cap, so we will have to take away £1,035.16 a year. Because you are getting too much.

Never mind that this will leave you with less money in your hand than this government used to say was the basic amount of money IN YOUR HAND for a family of 6 to live off, forget that. I know we used to say that £373.47 a week (or £8.89 per person per day#) was the minimum you needed after your rent costs in order to survive, now we can only 'afford' to let you have £292.31 a week (or £6.96 per person per day). A difference of £81.17 a week (or £1.93 per person per day) doesn?t matter.

What? You can?t pay your gas bill AND eat? How entitled ARE you? Go and get a job, you lazy scrounger. Why don?t your lazy scrounging children go and get a job? Maybe they can come and clean my chimney. What, you say? That sounds Victorian? Don?t be silly. You can?t expect something for nothing. Even if you ARE only 2yo.

#I have included this figure as it is cited as the current amount that the law STATES that a family of 6 NEEDS to survive EXCLUDING housing costs.

www.publications.parliament.uk/pa/cm201012/cmselect/cmcomloc/1406/1406we02.htm is interesting - points out the disparity between what is paid in LHA, and the cost of temporary accommodation in my area. So anyone who is evicted from a private tenancy for non-payment of rent, because they couldn't afford the top-up, will be paying rates of rent like this. Some of which would take you over the cap WITHOUT any money for food.

If it is heating or not for someone earning £35k, and therefore the same for anyone on £26k of benefits - Does that mean that it's OK for it to be heating or not for those on benefits? Or is it only unfair for someone EMPLOYED to face that choice? Let the proles freeze?

Give a benefits cap supporter enough rope, and they'll hang themselves...

"Give a benefits cap supporter enough rope, and they'll hang themselves..."

Indeed.

"Of course you're making hundreds of pounds in p;rofit because at the end of it you'll end up with 200k worth of property you haven't paid a penny towards, whilst the poor sods that have paid your mortgage for you will end up with nothing but an Ikea coffee table.

You wouldn't do it otherwise."

Hold on a minute, I resent that. Although this is veering off topic, I feel I must stand up for myself!

I rent my flat to a friend for £650 a month when the going rate in my area is about £1k a month, and flats are in high demand, I could easily find someone willing to pay this.

Why? Because I'm happy to help my mate out, he's looking after my flat extremely well while I'm at uni as a mature student, and covering costs. Yes, some other "poor sod" is paying my mortgage, but he's getting a pretty bloody good deal and I'm not making hundreds of pound in profit. I've chosen not too because other things are more important to me!

Just had to challenge your assumption, there are reasons people become landlords other than the obvious.

there are reasons people become landlords other than the obvious.

yes, there are, moah, and that's why I didn't join in with the bashing. There are many on this thread and all the others like it, though, who clearly are letting for profit and are bigoted against tenants on benefits. Whining about the trials of running a buy-to-let doesn't negate the fact that they are exploiting tenants for profit. Claiming they don't make a profit doesn't negate the fact that they do. Which is why I posted my little summary above.

those people who say being a landlord is bad - could you tell me what my son who is a student and looking to rent next year should do? if it wasn't for landlords he would be homeless?

The reason I have a buy-to-let property is because of the general state of pensions. Pensions are in a dire state, and despite topping the contributions up, it's clear that the funds are not going to provide an adequate amount for retirement. It's a good financial idea to spread the risk of stocks and shares (in which the pension funds are invested) into property.

I do not exploit my tenants and never have, and I have never operated at a profit. The idea is that at some stage, the property will be paid off and will hopefully deal with pension deficit. I imagine few property companies or landlords actually make much profit. Probably the only way of making a profit would be to buy near-slums, never renovate or repair them and let to HB tenants.

Maybe if you bought the property an age ago, you might be able to make a profit.

But even if you don't make a profit NOW, Quattro - you are hoping to make a profit in the future, otherwise it'd be a piss-poor pension prospect...Profits don't have to be realised immediately to still BE a profit.

'Probably the only way of making a profit would be to buy near-slums, never renovate or repair them and let to HB tenants.'

And where, exactly, do you think the properties with the lowest 30% of rent in an area are? THESE properties. Near-slums.

Its great on paper...but in practise they'll eff it up. Im all for not rewarding someone who has decided to become a baby factory so they can sit on their arses for their working life but what about on the allbeit rare occasions where a family of say 8 who have been hard working suddenly find themselves jobless single? Granted were all responsible adults and we should have savings for such occurrences but stuff happens and a cap needs to have a certain amount of flexibility and be index linked too. Also where are the hand ups rather than hand outs? Surely its cheaper in the long run totemporarily reward those who prove they want to be a valuable member of society than those who want to blag their way through life as much as possible?