London Flats Housing Benefit DHSS LHA Rents Mess

Harold Wilson, UK Labour leader, at a meeting ...

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Yesterday’s budget was a Harold Wilson budget – why? Because whichever way I think about it something Harold Wilson said springs to mind, indeed just saying that illustrates the point as most readers won’t remember 60s PM Harold Wilson although they may know his expression

“A week is a long time in politics.”

How true, but a long memory can be useful as

plus ça change, plus c’est la même chose

Less well known is his statement

Whichever party is in office, the Treasury is in power.

Without doubt yesterday’s budget was a defining moment for the next five year’s politics …………

For some strange reason during the lead up to the budget Landlord organisations such as the NLA lobbied extensively about Capital Gains Tax – I consider this strange because it isn’t a tax that Landlord’s pay in the normal course of their business. However quite a lot of Landlords have at least some involvement with Housing Benefit (LHA), and Housing Benefit has become one of the biggest expenses of government  now costing £21billion a year, compared with £14billion 10 years ago. We now spend more on housing benefit than we do on the police and on universities combined, and the Chancellor thinks housing benefit is completely out of control and in dire need for reform …… George, this may surprise you but a lot of Landlords got there before you. You quote some families receiving as much as £104,000 a year in housing benefit in some parts of London “The cost of that single award is equivalent to the total income tax and national insurance paid by 16 working people on median incomes.” – so what are you going to do about the mess?

New limits for housing benefit – £280 a week for a one-bedroom home to £400 a week for a four-bedroom property, radically cutting the maximum that could be claimed.

Errr ….. right. So in Westminster, where Pimlico Flats offers the best value flats available (I’m not just saying that) a Bedsit rents for £100 a week, a 4 bedroom home (we don’t have any) £700 a week. George – engage brain before opening mouth, it’s a simple fact that DHSS tenants bring problems and need managing, you are lucky that you can find private landlords to rent to them at all but if you think that landlords are going to rent to DHSS tenants at less than they can rent to private tenants you haven’t got the hang of a market economy yet. That’s not good for the dude in charge of the country’s economy, but this is what your civil servants typed out:

Housing Benefit is often criticised as making excessively generous payments that damage work incentives. To address this, the Government will remove payments that trap benefit claimants in poverty instead of providing incentives to work as well as being unfair to the millions of families on low income who do not depend on welfare. The Government will introduce a package of reforms to Housing Benefit from April 2011 onwards. This includes changing the percentile of market rents used to calculate Local Housing Allowance rates, and uprating these rates by CPI from 2013-14, capping the maximum Local Housing Allowance payable for each property size, time-limiting the receipt of full Housing Benefit for claimants who can be expected to look for work, and restricting Housing Benefit for working age claimants in the social rented sector who are occupying a larger property than their household size warrants.
George – I’m going to Glastonbury for a few days R&R but when I get back I will explain how we got into the Housing Benefit mess that we have. If you want to do some reading up it will help, if you look back to the 1980s where we started from, the housing stock built in the 50s & 60s when housing was thought so important that there was a “Housing Minister” in cabinet. That was a response to the nation’s feeling that the warriors who had won the war deserved a decent life, it was called Homes for Heros . Frankly George I don’t have the answer, but I’m hoping that if I explain how we got here to you then you’ll figure something out., so next Wednesday I’ll detail the history of Housing Benefit since the 1980s & all will become clear.
Meantime remember the wise words of Ronald Reagan:
Status Quo is Latin for the mess that we are in
But as this is a Harold Wilson Blog I’ll leave with
I’m an optimist, but an optimist who carries a raincoat
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8 Responses to “London Flats Housing Benefit DHSS LHA Rents Mess”

  1. […] landlord, Nick Parkin from Pimlico Flats, gives it to the Chancellor straight: “if you think that landlords are going to rent to DHSS tenants at less than they can rent to […]

  2. Sue @ Upad says:

    Totally in agreement with you Nick – our response here:

    I’m really hoping there’s some clarification on this and it turns out that the Budget speech vastly oversimplified their real plans. Otherwise I fear the mass evictions even the Torygraph is predicting
    are going to happen.

  3. Christian Louboutin Sale says:

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  4. Jocelyn King says:

    Excellent blog Nick.

  5. Dan says:

    As a Pimlico landlord renting to the social sector – I am very pleased to see someone else out there sharing my concerns.

    Westminster has a housing shortage full stop. If private landlords exit the market (and they will) then there will be a lot more social tenants in even more expensive and unsuitable temporary accommodation. Not good for anyone.

  6. Simon says:

    On the flip side, lowering LHA may well decrease rental prices in general, which is good for… almost everyone. :)

    I certainly don’t think taxpayers should be paying £700 a week for social housing in Pimlico. Whether the cuts are too severe remains to be seen, but the market will inevitably adjust.

  7. […] week saw an announcement about Housing Benefit that has extraordinarily far reaching effects that most of the population are yet to grasp. Until […]

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