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  • Buy-to-Let

    BRMA data

    Another aspect around social rents is that HAs now own around 60% of former Council homes - transferred via LSVT.

    Most tenants were "persuaded" that the only way they could get repairs/refurbs for their rundown homes - was to accept block transfer to HA landlord - who can borrow money for repairs etc whereas LAs were cash strapped and prevented since 1985 from borrowing.

    HAs on average though charge 13% higher rents than LAs.

    In part that is down to the new builds HAs involved in - where Cap Subsidy was 75% in 1990s but now cut to just 14% - so HAs need to borrow 86% of land/build costs at av 4.125% interest rate - which then needs rents to be around 80% MR for those new builds - hence £1000 pcm rent for 2  bed new build flat in Kingston - whereas older units from 1940s/50s have rent around £565 pcm.

    Developing HAs in many cases then have covenants in their loan agreements mandating that rents are maintained at a specified level - failing which lender has right to jack up interest rate

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    Social rents per se do vary radically between old and new build homes.

    Conversely social rents have a very minimal differential between homes of different size - check out a few CBL sites for what is on offer and you will get a feel for that.

    Around 50% of social homes are Flats.

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    Really just a case of curiosity, the news/media often comments about the disparity between private and social rents , my rentals are predominantly in areas where incomes are lower and most applicants receive housing benefit to some degree. I’ve seen “1 bed social housing flats advertised as being “social rents” but when you include service charges they are well in excess of LHA.

    I’ve found the following

    https://www.gov.uk/government/collection...stics#2018

    which shows that in my area the latest lower quartile rent for a 2 bed is 600 as against LHA of 520. ( where as a decent flat in what is considered a poor area will easily achieve around 650, often as a result of incomers to the area)Which shows the how the LHA freeze is affecting some tenants. Given the 5 percentile differential to LHA and that it is a lagging indicator, it shows there is a significant shortfall between LHA and market rents, which may explain to a degree the reluctance to take benefit tenants if there are applicants that are not. Personally I’ve had little problem with tenants on benefits over the years but given the shortfalls now evident I’m less inclined to grant recipients tenancies.

    It has also been announced that the LHA freeze is going to be removed for social housing providers, which seeing as in most cases their rents are below LHA seems unnecessary unless there is a percentage link between them.


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    On your last para - I wonder if you are confusing direct rent payment for social landlords - as that is the core issue for private landlords with UC tenants.

    Interesting UC Doc on BBC 7.30 pm last night with a number of benefit tenants saying they can not budget money to pay rents - will be on iplayer.

    I assume you operate in the North from the low level of LHA you mention

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    No, i’m on the east kent coast, which is seeing rent rises ( at long last)  on the back of people moving to the area on the back of cheaper rents and the area slowly improving ( largely due to those arriving having better incomes).

    Regarding the removal of the LHA freeze for social providers , this was announced in parliament a few months back , though as far as i’m aware no date given.

    https://www.voyagecare.com/news/local-hou...ds-housing

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