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  • Buy-to-Let

    Benefits changes pushing young people out of rented accommodation

    A press communication on behalf of our colleagues at the Residential Landlords Association.

    GOVERNMENT changes to remove housing benefit from 18 to 21 year olds from April will make it far more difficult for them to access rented housing according to landlords.

    A new survey of over 1,000 landlords has found that 76% will be reluctant to rent accommodation to this age group because they fear that they may not have enough money to pay the rent.

    The survey showed also the devastating effects of the Government’s planned benefit cap, with over 65% of landlords being reluctant to let properties to tenants who are of working age and on benefits because the cap might affect their ability to meet rent costs.

    Compiled by the Residential Landlords Association (RLA), the data also showed that those aged under 35 may also face problems accessing rented accommodation. Since 2012 they have only been able to claim benefit for a room in a shared house and 53% of landlords do not intend to renew such tenancies because of fear about payments not being made.

    According to Government statistics, in 2013-14 48% of all households aged 25-34 were in the private rented sector.

    Commenting on the results, RLA Vice-Chairman, Chris Town said:

    “The results confirm that reforms to housing benefit are making it increasingly risky for landlords to rent to those receiving it.

    “Rented housing is crucial to enabling young people to quickly access work opportunities wherever they might be. By making it more difficult for them to secure rental properties Ministers are making work prospects increasingly difficult for them.

    “A simple solution would be to give tenants the option of having payments of the housing element of Universal Credit paid directly to the landlord. This would give all tenants and landlords the security of knowing the rent has been paid.”

    Ends.

    To find out more about the work of the RLA, you can watch our recent video where we gave a guided tour of their HQ.






    [Image: house.png]Related content:

    Fergus Wilson says Clause 24 will increase homelessness

    Housing crisis?! You ain't seen nothing yet!
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    Yes single under 35 yrs is a no no really now for LHA self contained accommodation in my area. I used to have several but they have all but gone They have to go into shared houses or stay with family

    34 year olds living at home is not always conducive to maturing effectively so some females are getting pregnant by a friend just to get a guaranteed 2 bed rate . So the policy is fueling perhaps another baby boom generation.

    With the LHA rate frozen for 4 years now the gap between the LHA rate and the market rate with distort even further. Sec 21`s are like confetti. Its happening now and every day I hear another tragic story. I have had 3 enquires today alone. Desperate young people. Desperate parents. And i haven't a hope in supplying a property for their needs

    With UC being paid to them as well reversing the successful current direct payment system it is another example of a policy being fine in theory perhaps but simply not working on a practical level.
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    Jonathan Clarke. http://www.buytoletmk.com


    Agree with you Jonathon is UC in your area JC yet? Started in Doncaster not fully online and for new apps jsa single people effecting our rooms so we stopped Taking them for now funny seeing close to 100% occupancy in the rooms . We set up with tasker interviews taking place challenge is to get tasker details so full amount goes into the transfer account we have tried several times to control by ring dwp via the tenant in the office answer " no can't do that got to come to a meeting " so trying to improve that side , once uc fully comes in should be better maybe better than before hows it going with you JC and any others on PT? I guess the big challenge is with houses we
    Have good systems with rooms many who want easy in easy out but with houses and possibly " all the rent going to the tenant ? " oh sorry can't pay the rent had to buy Christmas presents as you say JC section 21s going to increase massively .
    Kim
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    (13-02-2016 02:24 PM)KimStones Wrote:  Agree with you Jonathon is UC in your area JC yet?

    Hi Kim - Job Centres in MK started taking UC applications for single job seekers in Nov 2015. Hasn't affected me as yet though.
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    Jonathan Clarke. http://www.buytoletmk.com

    Cheers Jon feels like a trial and cope with it improve as we go I think there will be benefits but the transition gunna be bumpy
    Kim
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    Will the rental problems that those on LHA will face reduce the fecklessness!?
    This on the basis that sourcing a LL to take a LHA tenant on is NOT going to be easy
    As for the HB element of UC being a resolution!?
    NO it won't!
    The HB element could be as little as 50p pw!!!
    UC tenants will refuse to accept that the other benefits they receive may have to pay for the rent
    This might cause LHA tenants to make a domestic financial decision to move to a cheaper area where their other benefits wouldn't need to be used for rent!?
    With the OBC set to reduce to £20000 and with the feckless refusing to work 16 hrs to avoid the OBC LL will be forced to remove such tenants unless they choose to move to a cheaper area
    The LHA business model is definitely reducing in scope
    I don't know how LL will cope with eviction costs!?
    Few tenants will vacate of their own accord
    The one positive might be that the SRS won't need to be paid as all the singles return home!!!??
    Perhaps LL will upgrade their former LHA properties for a better class of tenant and more rent!?
    I reckon the problem will be hidden with these singles crashing on friend's sofas etc
    LL will find that a lot of their tenants have long term 'visitors'
    How they are supposed to prevent this occurring I have no idea!?
    I reckon more LHA tenants will be gravitating towards the cheaper coastal areas
    One big problem I have noticed is the amount of cheap decent properties for sale in Wales
    The problem is most are too cheap for mortgages!
    Yet these properties would be ideal for LHA tenants forced out by unaffordable Southern properties
    I believe LL would be prepared to buy such properties if they could obtain mortgages
    I don't pretend to understand the mortgage market; but it seems to me short sighted not to offer low value mortgages
    There are clearly insufficient cash buyers or surely these tidy little Welsh cottages would be snapped up
    The quality I have seen online of these properties is astounding
    It needs a mass decanting of LHA tenants to Wales if those properties could be obtained with mortgages
    But overall it is looking pretty grim for LHA tenants
    Perhaps doing 16 hrs work per week is not too higher price to pay for retaining a tenancy!?
    Might just persuade the feckless to get off their a###s and manage the situation
    Probably all devised by the Downing St Nudge Unit!!?
    But overall most LHA tenants will refuse to adjust their feckless lifestyles
    They'll continue pumping out kids for the additional benefits and to avoid having to seek work
    Times will be tougher for them' but overall welfare is still better than bothering to work for most LHA tenants
    They just have to source mug LL prepared to accept less than market rents!!
    Suppose there are some out there
    I doubt that there will be many areas where market rents will remain less than the frozen LHA rates
    LHA LL are in for some tough decisions and future losses for evictions etc
    I don't envy LHA LL at all
    I wish them well and hope they aren't brought low by these LHA issues!
    I wonder whether LL will start to allow bunkbeds to assist 2 singles in 1 room!?
    Such singles surely couldn't be too choosy!?
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    (14-02-2016 07:38 AM)paul_barrett Wrote:  The LHA business model is definitely reducing in scope

    Agreed


    I reckon the problem will be hidden with these singles crashing on friend's sofas etc
    LL will find that a lot of their tenants have long term 'visitors'

    This goes on in increasing numbers but yes will double



    I have noticed is the amount of cheap decent properties for sale in Wales
    Yet these properties would be ideal for LHA tenants forced out by unaffordable Southern properties
    There are clearly insufficient cash buyers or surely these tidy little Welsh cottages would be snapped up

    Wales is on my radar


    But overall it is looking pretty grim for LHA tenants

    Agreed



    They'll continue pumping out kids for the additional benefits

    Agreed . I predict studio flats will become the natural habitat for young mums and baby. Its better than shared accommodation, B&B or their parents sofa. They will have a self contained living space and just have to adjust to the previously held assumption that they would automatically have a 2nd bedroom solely for the child in the first year or two of their wee life. Soon a 2 bed will be seen as a luxury.

    A 2 bed LHA rate makes studios an attractive investment in my area
    Yield 9%




    LHA LL are in for some tough decisions and future losses for evictions etc

    Indeed. But I will hang on in there because i think the incentives will become very attractive when the government finally cotton on as to how valuable a resource we are .
    I predict the government will want to start buying us out once they see the Sec 21 pile landing in their in tray starting to reach the ceiling. Not enough B&B`s available .To keep the tenant in situ they will pay me 5% over market price plus legal fees and maybe even a % of my CGT bill . Happy days

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    Jonathan Clarke. http://www.buytoletmk.com


    I reckon you might be onto something with the rent premium
    TA costs a fortune!
    So you say I'll take the LHA tenant at 75% of the TA cost
    Presumably that would be substantially MORE than the LHA rate or do you operate your properties as they become vacant as TA with TA rent!!??
    After all it is NOT as though you should experience many voids!!?
    I suppose wear and tear would be more; but I'm sure the far superior TA returns would make it worthwhile
    Perhaps that is what these pressured LHA LL should start offering TA at TA costs
    After all I see little difference in a LL offering accommodation as a FHL or TA
    They are all subject to possible voids
    With your experience and knowledge TA has got to be the way to go!
    It is NOT as though the council has much alternative!!??
    I've heard of people being in TA for years as no social housing is available
    After all I would imagine your TA properties would be standard fare charged at TA rates rather than LHA rates!!??
    You would have to be a bit more hands on; but for yield TA will generate far more of it!!
    Welsh TA would be very worthwhile
    Buy dirt cheap sturdy little Welsh terrace houses and let out to TA tenants!!
    Yes it is capitalising on the woes of council housing depts; but lets face it they haven't done LL many favours over the years!
    Times have changed and as you have quoted they are desperate for LL to lest to their homeless
    Provisioning for the TA market at the usually substantially higher rates has got to be worth consideration
    When the TA demand dies down the properties could just return to standard LHA tenancies etc
    I don't know how one qualifies a property to be TA with the council
    I would imagine that council inspection is required
    TA provision at higher rates than LHA is not something I had especially considered; but with the dearth of properties available for LHA tenants perhaps the TA business model has its merits!?
    I've seen 3 bed Welsh cottages going for about £55000 near a train stn etc
    Wales has now become a sort of tourist destination
    The old slag heaps have gone and Wales is greening up very nicely again
    And I don't know what it is; but I like the Welsh compared to the Northerners
    I have spent time there in the distant past; but just remember them as very nice people
    Investing in Wales especially for yield would make great business sense
    The M4 gets you to the heart of Wales and the rail links to London etc are pretty good
    What I don't get is why lenders refuse to offer mortgages on low value properties
    I reckon if you could obtain the finance you would easily work out some good yielding properties especially if you used the TA route
    I think it is inevitable that LHA tenants will be forced to consider moving to cheaper areas; and they'll your be with a hearty welcome!!
    It would be interesting to hear from LL who are in the Welsh market as to their take on it compared to the rest of the UK
    I seem to remember someone posting about Wales on queries I had made and very informative they were!
    t seems these Welsh properties are stuck in a sort of limbo situation
    The lenders won't lend on them and cash buyers haven't sufficient to buy outright
    Yet there is massive demand for those properties
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    For years I used to tell the single people to come back when they was 25, so they could get the 1 bed rate approx £90pw in Nottingham.
    Then 2012 when they changed this to 35 years old, I now have to tell 'em to come back when they are 35.

    And it was as Jonathon says, I'd go round my family tenants houses & their brother cousin sister etc. would be on their settee kipping there, because they was under 35, no one wants 'em any more. Except the shared places. Which most people are reluctant to go into.

    I think the Govt wanted to save something like £215 million restricting it to 35 years old. Why not stop HB altogether? Oh they are ha ha.
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    So why don't those social tenants who whinge about the completely fair SRS take in these sofa surfers!?
    Nothing to do with wishing to retain facilities in excess of what the PRS facilities offer would it!?
    Feckless HB tenants could easily let their spare rooms to avoid the SRS
    Those that refuse to cannot expect any sympathy
    LL should be able to prevent these permanent sofa surfer visitors from occupying PRS prooerties , but how can the LL ascertain this as tenants have the right to peaceful enjoyment
    A conundrum for LL!
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    Hundreds of planned new sheltered accommodation units have been delayed or scrapped owing to proposed cuts to housing benefit, the BBC has learned.

    Several housing associations have said they are no longer financially viable.

    The flats, for the elderly or people with learning disabilities, are more expensive to build and run because they provide additional support.

    Ministers say they are reviewing the sheltered housing sector "to ensure it works in the best way possible".

    The National Housing Federation (NHF) has calculated that nearly 2,500 units have so far been scrapped or delayed as sheltered housing providers face losing an average of £68 a week per tenant.

    David Orr, chief executive of the NHF, told the BBC: "There is real impact now.
    "New homes for people with support needs - vulnerable people - that would be being built have been cancelled."

    Full/source story
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