UK Property Bulls thread - "the correction may be over"

[Sonic]

My personal opinion is that the cap will have minimal impact on general rent levels for the bulk of the population. It will take further reforms of LHA, to impact the broader market. The planned change to setting the price across all rates at the 30th percentile rather than the median will be much more significant.

 

I agree - and so does the government

 

IDS said as much to Andrew Marr:

 

We're gonna drive rents down, I'm going to be telling the landlords the game is over.

 

However the Condems quite deliberately chose to focus on the £400PW cap because it was very easy to sell politically, taking obvious moral high ground that benefit recipients shouldn't be entitled to more than workers can afford.

 

I think that the cap is just a political stunt to cover the more significant LHA percentile reduction - the cost savings of the former are trivial compared to the latter

 

Judging by opinion polls it's been a very successful pitch, with even the majority of Labour voters in favour Link

[God Bear]

I've decide to ban myself for 24hrs, or to put it another way, to go on sympathy strike for Pixel8r.

 

Anyone want to join me?

Please clear your PM box when you return from strike.

 

Thanks

 

Good Bear

[tallim]

...

I had heard that the cap could be modified depending on the area. Do you know if this is going ahead or planned?...

 

I've done some more research off the back of this question. This is with reference to my large post on page 2 of this thread.

 

1) I made an error, apologies for not completing my original research more thoroughly. The GBP400 cap applies to 4 and 5 bed houses, there are further caps;

 

+ 3 Bed 340

+ 2 Bed 290

+ 1 Bed 250

 

This adds some extra BMRAs into the list affected by the caps on 3 Beds and less.

 

5 will be impacted by the cap on 3 Bedroom houses;

 

750.00 Central London

435.00 Inner North London

390.00 Inner West London

385.00 Inner South West London

350.00 Inner East London

 

5 will be impacted by the cap on 2 Bedroom houses;

 

500.00 Central London

330.00 Inner North London

314.14 Inner West London

310.68 Inner South West London

300.00 Inner East London

 

1 will be impacted by the cap on 1 Bedroom houses.

 

350.00 Central London

 

2) In reference to John's specific question, I can't find any details of a regional cap, other than that calculated through the normal median method.

 

3) The Government office that looks after the Local Housing Allowance system (the Valuation Office Agency, VOA) published an estimate of the 30th percentile rates per housing type per BRMA on 22nd June 2010 and has highlighted the 30th percentile rates that it still expects to be impacted by the hard caps;

 

http://www.voa.gov.uk/LHADirect/LHA-emerge...t-news-2010.htm

 

4) A group of London Councils prepared a briefing document (as a pdf) which contains some useful information

 

http://www.google.co.uk/url?q=http://www.l...zqe2hUGw9EzNhng

 

A couple of useful quotes;

 

There are over 650,000 homes being rented through the private sector in London. Over 1 in 3 of these are let to families in receipt LHA/HB.

 

18,645 households in London will be adversely affected by the proposed caps.

 

They have a couple of very good maps in the Appendix to show the impact in each London region.

 

I am surprised at the overall tone though, they certainly do not hide their disapproval of the reforms.

 

5) Finally, Shelter have produced a very good web page showing all the reforms that will impact benefits paid relating to housing.

 

http://england.shelter.org.uk/get_advice/p...using_allowance

 

Please note that most changes will not be imposed immediately, instead they will be phased on the earlier of;

+ Household circumstances change

+ The anniversary of the tenancy is reached

 

A quick summary of the important changes;

 

April 2011

+ Remove 5 Bedroom rates, maximum payable will now be calculated using 4 Bedroom houses only, a household is free to rent a larger house if it's within the 4 Bed rate or is topped-up by someone else

+ Introduce the caps as discussed above (4 Bed 400, 3 Bed 340, 2 Bed 290, 1 Bed 250)

October 2011

+ Introduce 30th percentile calculations for determing maximum rent payable on each housing type in each BRMA

April 2012

+ Increase the age threshold at which the applicant moves from the 1 Room to 1 Bedroom rate from 25 to 35

2013

+ All benefits payable to a non-working household (including Local Housing Allowance) will be capped at the average household income of a comparable working household.

[John Doe]

Hi Tallim,

 

Many thanks for the update.

 

I heard today that they are backing down a little and that extra time will be given to families due to be affected by the reforms.

[tallim]

Hi Tallim,

 

Many thanks for the update.

 

I heard today that they are backing down a little and that extra time will be given to families due to be affected by the reforms.

 

No problem. There is something called a discretionary housing payment mentioned in the London Councils and Shelter articles, it looks like a mechanism that could be used to pay extra money to provide a longer transition, but keep the Local Housing Allowance caps in place.

 

http://england.shelter.org.uk/get_advice/p...ousing_payments

 

Westminster Council covers the Central London Broad Rental Market Area that will be most affected by the caps, they publish some expenditure data on their website;

 

http://www.westminster.gov.uk/services/cou.../what-we-spend/

 

I've sent them a quick email to ask if it's possible to determine the level of Discretionary Housing Payments from data they publish.

 

It will be very interesting to see how the transition is handled;

+ At what point do landlords start to advertise for private tenants?

+ Are the properties in a state that would be accepted by private tenants?

+ How does the household pick a new area to live in?

+ Do landlords in surrounding areas, or other parts of the country, start advertising to those that are going to be capped out?

+ If a household is capped out of an area and goes somewhere else, at what point does responsibility pass from one council to another?

 

I'm sure people are only just working these things out, does anyone have a friendly landlord, or landlords forum, that would answer a couple of the questions?

[John Doe]

Pidgley does it again!

 

http://www.bbc.co.uk/news/business-11908336

 

Well located quality homes seem to buck the trend..... for now.

 

However, it does seem to back up the assertion that there are still a lot of well off people that aren't being touched by the downturn.

 

In areas where decent homes (stress homes) in good areas with good schools are few and far between, demand seems to be stable.

[drbubb]

It will be very interesting to see how the transition is handled;

+ At what point do landlords start to advertise for private tenants?

+ Are the properties in a state that would be accepted by private tenants?

+ How does the household pick a new area to live in?

+ Do landlords in surrounding areas, or other parts of the country, start advertising to those that are going to be capped out?

+ If a household is capped out of an area and goes somewhere else, at what point does responsibility pass from one council to another?

 

I'm sure people are only just working these things out, does anyone have a friendly landlord, or landlords forum, that would answer a couple of the questions?

Good questions.

I hope we can monitor for answers somewhere o GEI, and perhaps thru this thread

[drbubb]

... from the property diary ...

 

Sentiment is deteriorating again.

 

Property supply is rising, and homes are slumbering on the market, awaiting price cuts.

And this is DESPITE the continuance of ultra-low rates...

 

/source: http://www.hometrack.co.uk/commentary-and-...ey/20101129.cfm

 

How long before we go back to the sort of negative sentiment we saw at the bottom?

 

BACK AT THE LOWS in April 2009,

Few saw that the Turn was already underway.

 

Here's the old survey from HPC in April 2009:

 

POLL: Speed of UK House price declines (118 member(s) had cast votes in April 2009)

====

 

How are you experiencing house price declines in your area of the UK?

 

[13.56%] : Property price falls are speeding up (16 votes )

[50.00%] : Crash cruise speed underway - prices are falling at a fairly steady rate (59 votes )

[16.10%] : The rate of decline has slowed noticeably (19 votes )

[: 2.54%] : Prices seem to be stable - have stopped falling (3 votes )

[: 0.00%] : Prices are now showing a slight uptrend (0 votes )

[16.10%] : The picture is very mixed. No conclusion is possible (19 votes )

[: 1.69%] : No comment (2 votes )

 

My belief about a bounce, or signs of stability, if we see them :

 

[50.00%] : There will be no bounce this year (59 votes )

[38.98%] : What I am seeing, will be nothing but a Spring bounce (46 votes )

[: 5.08%] : The stability could eventually lead to a recovery (6 votes )

[: 2.54%] : This is THE LOW in the cycle (3 votes )

[: 3.39%] : No comment (4 votes )

 

Availability of finance that I am seeing :

 

[: 5.08%] : It is virtually impossible to borrow to buy a home where I am (6 votes )

[20.34%] : Loans can be obtained by those who have a 40-50% deposit, and sufficient income (24 votes )

[35.59%] : Mortgage loans of 70-75% LTV are available (42 votes )

[: 6.78%] : 80-85% loans are available (tell us more) (8 votes )

[: 4.24%] : Loans of 90-100% can be obtained (5 votes )

[27.97%] : No comments (33 votes )

 

/see: http://www.housepricecrash.co.uk/forum/ind...09612&st=30

[drbubb]

IS THIS the real problem:

 

"Lenders are demanding 'unaffordable' deposits?"

... or might it be ...

 

"Vendors have been demanding unaffordable prices?"

 

Cannot the Boobs on the BBC boob tube see:

that PRICES WILL FALL, if buyers stop borrowing to pay up.

Who else are they going to sell to Exterrestrials?

Good on the banks for finally getting some religion, but unfortunately, they are again stuffed

with toxic loans which will be revealed as prices fall back.

 

21 November 2010

Banks and building societies have told the BBC that they are not expecting any significant recovery in mortgage lending next year.

 

And that comes as figures show the number of new mortgages being taken out hit a 10-year low last month.

 

New vetting procedures for applications could deny many borrowers the chance to buy the homes they want unless they can save up two years' pay for a deposit.

(added: or they may have to wait 1 -2 years for prices to fall to affordable levels)

/see Video: http://www.bbc.co.uk/news/business-11805265

 

Shame on the BBC for such transparent stupidity

[drbubb]

(from HPC, a good argument for throwing away your telly & stopping the BBc license fee):

 

Complaint type:

BBC News

Location:

England

What is your complaint about:

General News

Complaint category:

Poor Quality

Complaint summary:

Reporting of the "mortgage drought" and the housing market in general

Full complaint:

Why the hell can't you ever state the bleeding obvious solution - that house prices have to falls to levels where it is affordable for young people to buy them again. The BBC's reporting of the housing market is an utter disgrace - you wheel out vested interests like Ray Boulger continually without ever challenging him or putting forward an alternative opinion. Example: http://www.bbc.co.uk...iness-11805265. The "housing experts" you continually quote for the basis of your "news" reports all have a vested interest in maintaining house prices at ludicrous levels. A press release from an estate agent is not news - it's propaganda from a vested interest and should be treated with extreme scepticism. The BBC reports this sort of guff as news. Rising house price stories are also treated as good news, when the exact opposite is true. I depair of the BBC.

 

/from: Constable: http://www.housepricecrash.co.uk/forum/ind...howtopic=154963