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  • LHA/Universal Credit

    Universal Credit

    A useful newsletter on Universal Credit changes from local council.

    http://www.nuneatonandbedworth.gov.uk/do...ugust_2012

    However VERY worrying how the powers that be see the distribution of funds wrt housing benefit. If tenants are told this is how it's worked out then landlords are in doo-doo!

    Example 1

    – Mr & Mrs A have 4 children and are both out of work. Their combined benefit income (including Housing Benefit) is £600 per week.

    – Their Housing Benefit entitlement is £120 per week.
    – As their income exceeds the benefit cap by £100, their Housing Benefit from April 2013 will be £20 per week.

    Example 2

    – Mrs C is a lone parent with 5 children and is not working. Her benefit income (including Housing Benefit) is £556 per week.

    – Her Housing Benefit entitlement is £138 per week.
    – As her income exceeds the benefit cap by £56, her Housing Benefit from April 2013 will be £82 per week. 

    Lisa
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    Lisa All comments are for education and information purposes only and do not construe as advice or a financial promotion. No liability is accepted for comments made. If you wish to receive information in an advisory capacity then please contact me about becoming a client. www.keys-mortgages.com

    Thanks for posting this useful info Lisa.

    It all sounds a bit of a nightmare and that the right hand does not know what the left hand is doing.

    It was originally said that UC would be paid direct to tenant but I have heard recently that they will pay direct to Landlord.

    What do you see being the main problems and will they deter LL's renting to tenants on benefits?
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    Mary Latham wrote about this on LRS web site and spoke about it at the Manchester Landlord show.

    I understand a family will be capped at £26,500 and a single person is £18,500. If their total benefits exceed these amount they will be reduced to the capped rate. From the list of benefits the first benefit to be cut will be the housing benefit.

    There are 5 areas to trial it and one of them is Tameside, Manchester.

    Tameside is one of 5 Councils we receive housing benefit from and to date we have not heard anything regarding the coming changes.

    We have started asking applicants what their total benefits are to make sure they will not fall into the new changes.

    We also include the new over occupancy rate informing them they will have their benefits cut for any rooms they are not entitled to claim for.

    I think it may be better for some people to get a job. Sadly the jobs may not be there Sad
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    Perhaps buying shares in the London Rubber Company would be a good investment.
    This as more of the less knowledgeable might start to control the amount of children they have.
    This will mean that having less children would mean reduced child credits which would avoid them exceeding the benefit cap.
    So benefit caps may effectively be a very effective state family planning system and also enable UC claimants to stay in their accommodation plus the shares in LRC in should increase in value as more of their products are used by UC claimants fearful of having more children and exceeding the benfit cap.
    Brilliant idea, well done the govt.
    So simple choice have lots of kids and not very nice accommodation or much money or control your breeding and be able to receive sufficient housing benefit UC so that you don't have to move to cheaper areas.
    Of couse the problem for these UC claimants who could effectively avoid ever working again by producing children every so often meaning that until every child was older than 5 years they would not have to do at least 16 hrs work.
    Actually child tax credits should be for the 1st 2 children and after that at your risk and cost do you have anymore.
    I wonder where all the fathers of these children are?.
    Shouldn't they be contributing towards the wellbeing of these children.
    Are we as taxpayers supposed to support the fecklessness of these people who presently know how to work the system.
    I have NO sympathy with these types.
    Control their breeding; by effective govt policy.
    Then once your 2 kids have reached 5 off you go to work for the minimum 16 hrs.
    Have anymore then tough you will still have to do 16 hrs of work.
    I would prefer that DNA is taken at birth and when these feckless mothers present another mouth for the taxpayer to feed etc, the state will be able to ascertain who is the father and make him pay for his few minutes of pleasure for the next 18 years.
    Why should the taxpayer have to pay!?
    As has been mentioned benefits should be regarded as a hand up and not a handout that is expected to be provided for life so that real work can be avoided living a life of relative luxury on state benefits.
    I have heard that the benefits are being so reduced that people are finding they have to go out to work to make ends meet!!!!!!!!!?
    The benefits culture is so pervasive within the benefit classes and the ability to work the system so esy for them that it will take decades to change the mindset of these lazy types and force them to work.Personally I think if you are not actively seeking work in attending interviews etc you should be made to work for your benefit.
    Will any of this come to pass.
    NO
    We will continue the same old way with the taxpayer being royally screwed by the clever benefits underclass whilst hard working law abiding individuals continue to work hard to provide the benefits thes UC claimants live a very nice lifestyle on.
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    The pilot trial areas will highlight these problems and adjustment and amendments will be made accordingly . Failure to do so will see a run on the UC system by landlords and Sec 21`s will overwhelm the councils. The beauty of the system though is that if there is danger is on the horizon a sec 21 gives the government 2 mths to introduce emergency measures. A run on the banks panics people within hours and days and causes immediate chaos. Landlords move comparatively in slow time

    If the number of Sec 21`s served are increased many fold then to prevent the homeless situation escalating to unacceptable levels the government has 2 mths to pacify an angry landlord. Upgrading the DHP budget ( a bit like QE I guess) will be the most likely short term tool used in my view. A cash injection before like this has made me rescind a Sec 21.

    ( Its all a bit of an unwanted hassle of course especially as i`m very busy with the Olympics at the moment and i wont have time to hardly breathe before that ends and the bloomin footie starts again.).
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    Jonathan Clarke. https://www.buytoletmk.com

    (11-08-2012 05:50 AM)Jonathan Clarke Wrote:  The pilot trial areas will highlight these problems and adjustment and amendments will be made accordingly . Failure to do so will see a run on the UC system by landlords and Sec 21`s will overwhelm the councils. The beauty of the system though is that if there is danger is on the horizon a sec 21 gives the government 2 mths to introduce emergency measures. A run on the banks panics people within hours and days and causes immediate chaos. Landlords move comparatively in slow time

    If the number of Sec 21`s served are increased many fold then to prevent the homeless situation escalating to unacceptable levels the government has 2 mths to pacify an angry landlord. Upgrading the DHP budget ( a bit like QE I guess) will be the most likely short term tool used in my view. A cash injection before like this has made me rescind a Sec 21.

    ( Its all a bit of an unwanted hassle of course especially as i`m very busy with the Olympics at the moment and i wont have time to hardly breathe before that ends and the bloomin footie starts again.).

    If as you suggest LL rebel and start enforcing Section 21's on how many occasions will the govt stump up extra DHP resources.
    If they kept on doing it then you would for all practical purposes have the previous LHA/UC levels restored, which somewhat defeats the object of the exercise as far as the govt is concerned.
    I reckon they would do as you suggest they might, but if they win the next election then look out UC claimants.
    As a matter of interest have you had any opportunity to discuss with your LHA claimants the onset of these circumstances and what has been their response and how for practical purposes are you dealing with the oncoming situation.
    Might uou go down the CU route and as you have intimated threaten Section 21 enforcement unless increased DHP is awarded.
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    (11-08-2012 06:00 AM)paul_barrett Wrote:  
    (11-08-2012 05:50 AM)Jonathan Clarke Wrote:  The pilot trial areas will highlight these problems and adjustment and amendments will be made accordingly . Failure to do so will see a run on the UC system by landlords and Sec 21`s will overwhelm the councils. The beauty of the system though is that if there is danger is on the horizon a sec 21 gives the government 2 mths to introduce emergency measures. A run on the banks panics people within hours and days and causes immediate chaos. Landlords move comparatively in slow time

    If the number of Sec 21`s served are increased many fold then to prevent the homeless situation escalating to unacceptable levels the government has 2 mths to pacify an angry landlord. Upgrading the DHP budget ( a bit like QE I guess) will be the most likely short term tool used in my view. A cash injection before like this has made me rescind a Sec 21.

    ( Its all a bit of an unwanted hassle of course especially as i`m very busy with the Olympics at the moment and i wont have time to hardly breathe before that ends and the bloomin footie starts again.).

    If as you suggest LL rebel and start enforcing Section 21's on how many occasions will the govt stump up extra DHP resources.
    If they kept on doing it then you would for all practical purposes have the previous LHA/UC levels restored, which somewhat defeats the object of the exercise as far as the govt is concerned.
    I reckon they would do as you suggest they might, but if they win the next election then look out UC claimants.
    As a matter of interest have you had any opportunity to discuss with your LHA claimants the onset of these circumstances and what has been their response and how for practical purposes are you dealing with the oncoming situation.
    Might uou go down the CU route and as you have intimated threaten Section 21 enforcement unless increased DHP is awarded.

    I`m verbally telling tenants that big changes are afoot and a roof over their head is a very important part of any household budget. Some of them think its no 10 on their priority list I aim to get them to consider its No 1. We have often met in the middle in the past at No 5. I aim to make a concerted effort to get it up to gold silver or bronze position. A letter will go out to reinforce that message. That will shock them as I dont normally do letters. They will think I`ve gone all serious on them. I will use the power of subliminal messages I think just sowing the seed of doubt in their mind but giving them every opportuinity to get it right. The words `Sec 21 `, `economic down turn` , `pressure on me which I didnt anticipate` etc etc will be the type of words and phrases i will use to assist me getting my msg across in good time.

    Yes I will explore CU which seems to be a fave at the mo but I`m still thinking direct payment will be back on the agenda in some guise. I will work with the system as much as possible but if not satisfactory and will work around it ( legally of course)

    I`m exploring and have had success with a payment to date to a relative of mine whom I trust 100%. The tenant if not allowed to pay me nominates an account. There is nothing I`ve seen to say it has to be their own. So if they nominate my relative to be paid direct from the council then that appears to be ok. All Ive done is then set up a STO from the relatives to my account. It works a treat and keeps the tenant out of the loop
    I could also explore the possibility of setting up perhaps a separate joint account with the tenant to which we would both be signatories. It could be in their name but i could access it. Thats work in progress.
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    Jonathan Clarke. https://www.buytoletmk.com

    (11-08-2012 06:36 AM)Jonathan Clarke Wrote:  
    (11-08-2012 06:00 AM)paul_barrett Wrote:  
    (11-08-2012 05:50 AM)Jonathan Clarke Wrote:  The pilot trial areas will highlight these problems and adjustment and amendments will be made accordingly . Failure to do so will see a run on the UC system by landlords and Sec 21`s will overwhelm the councils. The beauty of the system though is that if there is danger is on the horizon a sec 21 gives the government 2 mths to introduce emergency measures. A run on the banks panics people within hours and days and causes immediate chaos. Landlords move comparatively in slow time

    If the number of Sec 21`s served are increased many fold then to prevent the homeless situation escalating to unacceptable levels the government has 2 mths to pacify an angry landlord. Upgrading the DHP budget ( a bit like QE I guess) will be the most likely short term tool used in my view. A cash injection before like this has made me rescind a Sec 21.

    ( Its all a bit of an unwanted hassle of course especially as i`m very busy with the Olympics at the moment and i wont have time to hardly breathe before that ends and the bloomin footie starts again.).

    If as you suggest LL rebel and start enforcing Section 21's on how many occasions will the govt stump up extra DHP resources.
    If they kept on doing it then you would for all practical purposes have the previous LHA/UC levels restored, which somewhat defeats the object of the exercise as far as the govt is concerned.
    I reckon they would do as you suggest they might, but if they win the next election then look out UC claimants.
    As a matter of interest have you had any opportunity to discuss with your LHA claimants the onset of these circumstances and what has been their response and how for practical purposes are you dealing with the oncoming situation.
    Might uou go down the CU route and as you have intimated threaten Section 21 enforcement unless increased DHP is awarded.

    I`m verbally telling tenants that big changes are afoot and a roof over their head is a very important part of any household budget. Some of them think its no 10 on their priority list I aim to get them to consider its No 1. We have often met in the middle in the past at No 5. I aim to make a concerted effort to get it up to gold silver or bronze position. A letter will go out to reinforce that message. That will shock them as I dont normally do letters. They will think I`ve gone all serious on them. I will use the power of subliminal messages I think just sowing the seed of doubt in their mind but giving them every opportuinity to get it right. The words `Sec 21 `, `economic down turn` , `pressure on me which I didnt anticipate` etc etc will be the type of words and phrases i will use to assist me getting my msg across in good time.

    Yes I will explore CU which seems to be a fave at the mo but I`m still thinking direct payment will be back on the agenda in some guise. I will work with the system as much as possible but if not satisfactory and will work around it ( legally of course)

    I`m exploring and have had success with a payment to date to a relative of mine whom I trust 100%. The tenant if not allowed to pay me nominates an account. There is nothing I`ve seen to say it has to be their own. So if they nominate my relative to be paid direct from the council then that appears to be ok. All Ive done is then set up a STO from the relatives to my account. It works a treat and keeps the tenant out of the loop
    I could also explore the possibility of setting up perhaps a separate joint account with the tenant to which we would both be signatories. It could be in their name but i could access it. Thats work in progress.

    Hmmm....joint accounts.....financial association and consequent joining of credit files...beware.
    Why is it your tenants don't seem to take your advices with the seriousness that they should.
    do they think you will just absorb the benfit reductions and so they can carry on regardless.
    Perhaps time to start researching PRS demand for your properties if your UC claimants aren't prepared to get real and accept that you will NOT be absorbing the cuts and it will be their fags and booze that will be affected or NO roof over head!!
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    [/quote]

    Hmmm....joint accounts.....financial association and consequent joining of credit files...beware.
    Why is it your tenants don't seem to take your advices with the seriousness that they should.
    do they think you will just absorb the benfit reductions and so they can carry on regardless.
    Perhaps time to start researching PRS demand for your properties if your UC claimants aren't prepared to get real and accept that you will NOT be absorbing the cuts and it will be their fags and booze that will be affected or NO roof over head!!
    [/quote]
    ................................................................................​............................................
    Yes you are quite right Paul me thinks on joint accounts - its a non starter really isnt it so i will knock that idea on the head.

    Tenants LHA or private always will produce problems when it comes to paying rent. Its the game we are in. I always have had non LHA as a back up plan irrespective of the onset of UC. My portfolio is about 75% LHA and 25% working. It could easily become 50/50 with natural wastage of the LHA tenants in the better quality properties over time in favour of working tenants and then a further tweak would enable more working than non working in even the poorer areas. Private rents have risen more in line now with LHA over the last 5 yrs ive noticed so the differential and potential drop in income will not be so great if I had to jump ship. The aim was always though to focus on the fastest and quickest way to get the biggest cash flow. LHA delivers that time and time again for me. The more you are protected by good cash flow the more you can become flexible in your approach.

    Having said that Ive just completed yesterday on a smart 2 bed in a smart area of town. It was for family so not my typical stomping ground. I also paid top whack just to secure the house as its in the best location. They dont come up that often. Even going against the grain and buying in effect an emotional purchase it still will cash flow £200 pcm so I cant complain. It just shows me that property whereever you invest is still the best by far place to put your spare money. This new one at only a lowly measely 10% ROI still easily outshines the building society and gives me an asset base for future growth as well.

    The demand is also so great out there that if I spend some money on the LHA properties to upgrade then I am finding that I can attract private tenants to a previously more dominant LHA area at the same level of rent. Interesting times ahead .
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    Jonathan Clarke. https://www.buytoletmk.com

    Universal Credit will go live in the Greater Manchester and Cheshire region six months before the national roll-out. The Pathfinder will take place in Tameside, Oldham, Wigan and Warrington from April 2013 before Universal Credit is rolled out across the country in October 2013.

    Up to 1,500 new claimants are expected to begin receiving Universal Credit each month throughout the Pathfinder period, and this will amount to a total of about 9,000 households. It will only apply to certain postcodes in the named areas, and those postcodes and the local authority and DWP offices that will be involved will be announced soon. Guidance has not yet been issued to the local authorities who will be involved.

    The way in which Universal Credit will be introduced from October 2013 has also been confirmed. It will begin in seven locations across Great Britain in October 2013, and will then expand to all areas over the following months as Jobseeker’s Allowance is closed to new claims. More details will be made available in the next few months about the scheduling of this expansion, and how existing benefit and credit claimants will move onto Universal Credit with the majority making claims online rather than by telephone or face to face. The Department for Work and Pensions recognises that there will continue to be a minority of people who cannot use online channels. These people will be offered alternative access routes, predominantly by phone but also face to face for those who really need it.

    The time line for introduction of Universal Credit.
    2013
    April Universal Credit Pathfinder in 4 areas Tameside, Oldham, Wigan and Warrington.

    Universal Credit will replace income-related JSA, income-related ESA, Income Support (including SMI), Working Tax Credits, Child Tax Credits, Housing Benefit (LHA) and Council Tax Benefit

    2013 October
    Universal Credit will go live nationally starting with a further 7 areas (not yet named).

    All new claims for out-of-work support will be treated as claims to Universal Credit. No new Jobseeker’s Allowance, Employment and Support Allowance, Income Support or Housing Benefit claims will be accepted. Customers transitioning from out-of-work benefits into work will move onto Universal Credit if they are eligible.

    2014 April
    Migration of people already on benefits whose circumstances do not change.

    No New claims will be paid as Tax Credits.

    During this time existing cases will be worked through

    2017
    Universal Credit national roll out will be complete.

    12 to 13 million tax credit and benefit claims will have been transformed into 8 million households receiving Universal Credit

    more here http://www.landlordreferencing.co.uk/blo.../#comments

    There has been talk about direct payments "being possible" but in my opinion this will be like the 2007 changes - in other words they will apply to Local authorities and RSL's which is a pity because it would take no longer that a month for them to put pressure on Government if they were in the same boat as the PRS. The tenants who are most at risk outside of London are the large families and those where some family members have disbilities. It is quite easy for these groups to get the the benefit caps of £26K pa and to loose most if not all of the LHA.

    In my opinion Credit Unions are the answer - ensuring that your tenant has access to an account where the rent is paid to you as soon as the UC payment goes into the account will be the best survival plan for both landlords and our tenants.

    Follow me on Twitter @landlordtweets
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    Follow me on Twitter @landlordtweets
    May I proffer this website for info on Universal Credit?
    http://www.welfarereformsadvice.co.uk/
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