CAUSES OF RENT ARREARS IN SOCIAL HOUSING -- (A LITERATURE REVIEW) review

CAUSES OF RENT ARREARS IN SOCIAL HOUSING -- (A ) - Literature review Example This is usually due to the low income that the renter is on, but there are other reasons which will be discussed in this essay. The causes of rent arrears in social housing is important because knowing the causes can help show why people have problems, if social housing rental prices need to be lowered, and how the agencies involved can help social housing tenants. Reducing the causes of rent arrears could lower the amount of rent arrears, causing less stress for the tenants and less financial burden on the government or supplying agency. Rent arrears might also lead to homelessness in cases when people have no other option, and this is something that needs to be avoided. The information is also interesting because it will help illustrate some social problems that these people have and this could be used in a wider context to understand social housing and perhaps rent arrears in general. The literature used in this review will be mainly found in housing journals, but some information will be found from other journals if they contain relevant information. Using this information, the essay will uncover the main reasons why people go into arrears on their rent in social housing by finding the key themes in the literature. This review is limited to research since the year 2000 because the most recent research is usually the most relevant to the situation, and the 21st century is interesting in many ways. Key Themes in the Literature One of the main themes in the literature is that rent arrears are a really important reason for many peoples homelessness. Crane (2000) suggests that 7% of all homeless men are homeless because they were evicted for rent arrears from social housing and a 29% more of these were in arrears to other companies. This suggests that many people struggle with financial management in social housing and this one of the main reasons why people get into rent arrears in social housing. There are suggestions that the government should sponsor some ed ucation for financial management (Collier, 2005) because this would help reduce one of the main causes of rent arrears. Research by Anderson & Christian (2003) also suggests that a number of people are homeless because they had gotten into rent arrears and often this was in social housing, although it does not give the specific causes of the rent arrears. A related theme is that some people in social housing may just not be able to afford it. Although the government or another agency does subsidise the cost of the rent, it may still be too expensive for some people. These people may have several children, no benefits, no job or many other things. This topic is found in the work of Milligan (2003) who suggests that the problems in Australia with rent arrears are mainly due to these factors and that work needs to be done on providing the housing at an even lower cost if possible. This will be the only way that rent arrears will be less common. This problem was also found in the United Kingdom and talked about by Hills (2007), who again suggested that the costs need to be lowered to make rent arrears less common in the UK. Priemus & Dieleman (2002) show that rent arrears due to the high cost of social housing are found throughout Europe and that prices are rising. More evidence from Yates & Wulff (2000) suggests that the amount of low cost social housing is being reduced meaning that more people are forced to take on housing which is too expensive for them and this

Meaning and benefits of 'diversification in financial markets Essay

Meaning and benefits of 'diversification in financial markets - Essay Example Some markets can be stable with a clear direction while others move up and down without any clear direction. Such markets are said to be volatile and investing in them can be extremely risky. A lot of volatility increases the chances of losing especially if the capital is not large enough to caution the investment from the volatility (Smith and Schinasi, 1999). Allocating Capital The amount of money to invest in each of the markets or instruments solely depends on the investor. There is a percentage of risk the investor is comfortable investing in each of the chosen portfolios. This should also work together with the behavior of the markets in the last few months or years. An investor can invest more percentage of the capital in stable markets and instruments as there is little or no risk. Volatile and unstable markets should only be allocated a small percentage of the capital. In fact, investors should avoid trading volatile markets. If all the markets of interest are very volatile, the investor should consider waiting for volatility to come down before investing. Diversification in the financial markets has many advantages, including; Guaranteed profits: diversification in financial markets almost guarantees profitability. This is because even in the worst-case scenario, some of the markets and instruments will generate profits. ... If the markets were going against the investors bet, they can close the positions at once and remain with little or no losses. With good money management skills, even the others should be able to generate profits after some time. The charges for trading in the various markets are relatively low compared to other types of investments. With that, most of the profits made are retained by the investor (Caruso, Silli, and Umlauft, 2005). Reduced Risk: investing in different portfolios reduces the risk exposure of the capital. As such, it would be hard to lose all the capital. Even if some of the portfolios go at a loss, the investor will be guaranteed that at least some of the portfolios are into profits. In some cases, investors can even hedge, in which case they can make profits in one market while another is negative (Madura, 2012). Leverage: some financial markets institutions work with margin trading. Investors are required to raise a certain proportion or percentage, and the broker tops it up allowing the investor to purchase more units than they would have purchased with their own money. Leverage can increase the profitability factor of an investment but can also lead to substantial losses. Diversification and leverage would allow the investor to venture into different markets and invest in many different investments with little capital (Gilchrist, 2003). Management of Capital: Diversification in financial markets allows easy management and preservation of capital. Investors have access to a variety of tools and software that assists them in determining how they are going to invest, the amount of investments to make on what elements and calculations of the risk to reward ratio.