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  • Buy-to-Let

    Overall Benefit Cap; Osborne signals further reduction

    In front of the Select Committee the Chancellor has signalled that welfare will have to be reduced further.
    This he has indicated means that reduction of the OBC is actively being considered.
    Such a further reduction will impact on the investment decisions that PRS LL will make.
    Such a reduction will surely force HB tenants to move out of expensive cities to cheaper areas.
    Also certain domestic circumstances. will become unaffordable in existing areas.
    For PRS LL who have much HB experience this OBC reduction will surely cause them to change their investment strategy.
    What will be the considered responses of HB LL!
    And of course we have not factored into the equation of the introduction of UC which will make it increasingly difficult for the HB LL to get paid rent.
    I presume there has been some effect and relevant responses by existing HB LL; but with a further OBC reduction will this cause even those LL to exit the HB market to go to more quality tenants in better areas.
    The converse I suppose would be that this would be an opportunity for HB LL to buy up lots of cheap property in the knowledge that very soon they will be inundated by HB tenants desperate to source cheaper properties from the now unaffordable areas!!?
    There of course may not be much chance of capital growth in such areas; but the opportunity for higher yields is surely an attractive proposition.
    The likes of Castledene who are expert in this field must surely be rubbing their hands with glee at the prospect of HB tenants being driven to the cheaper areas by the OBC cuts and thereby being able to offer properties managed by them to these tenants.
    With the supply of such properties coming from PRS LL who have sold up expensive properties in expensive areas and are now piling them high and selling them cheaper; but now affordable to HB tenants on the now further reduced OBC
    Clearly the reduction of welfare is and will continue apace.
    How will pragmatic PRS HB LL respond to this attack on their ability to retain HB tenants when the OBC will make their property unaffordable to such HB tenants.
    I reckon JC will give the best answers!!
    And no all these tenants who can no longer afford their existing property can't all move to MKSmile
    Of course there may be no need for change as it is my understanding that if you do 16 hrs work per week you are excluded from the OBC in entirety.
    Will PRS HB LL start assisting their existing tenants who would have to move otherwise to source part-time jobs so that they don't lose the very nice HB cash flow!!??
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    IF LHA becomes unaffordable for PRS to meet their own commitments, Landlords will generally "do up" the property increasing competition on the Landlords renting to professionals.

    Alternatively, they may adapt the policy of" pile them high and sell them cheap" and then Houses becomes Bedsits.
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    There is nothing stopping someone on LHA that gets the 3 bed rate from renting a 2 bed house if they are hit with the cap….

    Likewise someone that gets the 2 bed rate can sleep in the living room, giving the children the one bedroom.

    Working people in the south have to often to this sort of thing.
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    Interesting point; but then we will have the idiots like Shelter complaining that rental properties are overcrowded when the answer is to MOVE to the same roomed property; but somewhere cheaper, probably up North.
    Do LL really want tenants sleeping on the sofa!!?
    Apparently when asleep you give off about a pint of water into the sofa; YUK!!
    Or will; there be a sudden demand for sofabeds!?
    It seems this lot would rather do anything but work to avoid losing their city centre amenities.
    Will LL like the idea of tenants crowded from a 3 bed to a 2 bed.
    Extra wear and tear etc.!!?
    Will tenants use overcrowding as an excuse to obtain social housing because they refuse to move to a cheaper 3 bed property elsewhere!!!
    Will the councils be dopey enough to be hood winked by such supposed overcrowding applications!!??...............................presupposing they have any appropriate social housing!?
    But it may move the applicants up the housing list for social accommodation!
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    Just saying someone should get work make it sound so easy…

    Today I visited a tenant to sort out a few maintenance issues, he is very activity looking for work. However he has been told by the job centre that if he takes a job for less than 24hr a week he will be worse off as you have to work at least 24hr a week to get working tax credit. (I think the job centre may have got the maths wrong, but that is anther question.)

    Most of the local jobs are part-time with the possibility of additional shifts, but he is not willing to take the risk of not getting the additional shifts and so doing less than 24hr a week. The benefit system also stops him taking any 0 hour contracts for the same reason.

    He has 3 children and a partner and is not willing to risk them losing the money. If he was single he could take the risk of the part time work.

    (The benefit cap does not hit them as the rent levels in Stockport are well under it.)
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    (13-12-2013 02:21 PM)paul_barrett Wrote:  I reckon JC will give the best answers!!
    And no all these tenants who can no longer afford their existing property can't all move to MKSmile

    MK - open 24/7 welcomes all newcomers
    .
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    Jonathan Clarke. http://www.buytoletmk.com

    (14-12-2013 01:22 AM)Jonathan Clarke Wrote:  
    (13-12-2013 02:21 PM)paul_barrett Wrote:  I reckon JC will give the best answers!!
    And no all these tenants who can no longer afford their existing property can't all move to MKSmile

    MK - open 24/7 welcomes all newcomers
    .

    I'll take a few as well in sunny Luton!!
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