Ed pledges to cap rent rises, extend standard tenancies & scrap fees

HoopyViper .... re your quotes below;

"How about a type of repossession for those unable to offer secure lets, with resale only to buyers from rented (private or social)?"

"And I am never going to bow away from asking questions or challenging the status quo, or be satisfied with being told "all you need to know"."

FYI I'm the same, hence I like to look at what was, what is being promised, and adding some factual balance to show what is commercially/practically possible and what isn't e.g. without and with State Controls that if results in current landlords to sell (reducing available rental stock) and discourages institutional investors to build and rent to provide the rental conditions YOU want, DO make matters worse.

I'm reading!

For anyone interested:
www.cpresussex.org.uk/campaigns/mayfield/item/2429-mayfield-developer-s-claim-perpetuates-myths

16 May 2014

The following letter was published in the Mid Sussex Times in response to claims made by Mayfield Market Towns Ltd:

In last week’s edition you publish a report that a new 10,000 house town near Henfield and Wineham that is being promoted by developers, Mayfield Market Towns Ltd, would destroy the habitat of an important barn owl population.

The would-be developers claim that the real issue is whether their new town there would provide a better solution to delivering much needed new housing for local people. This claim perpetuates two myths - firstly, that there is an accepted local need for a new town on the southern borders of Horsham and Mid Sussex, and secondly that its proposed location is suitable and sustainable.

Neither is true. Both Horsham and Mid Sussex District Councils are in advanced stages of developing long term plans for their Districts: neither of their plans calls for any new market town to meet their Districts’ housing needs. As to location, it is difficult to envisage somewhere less suited to a mega-development than the lovely open countryside around Wineham with no significant local unemployment, with no road, rail or other infrastructure, and on low lying fields prone to flooding from the Adur. Not to mention the barn owls, nightingales and other wonderful wildlife.

We challenge Mayfield to publish the ecological and flood reports that it claims to have commissioned so that we can all judge for ourselves.

Michael Brown
Trustee, Campaign to Protect Rural England, Sussex Branch

Ok, having looked a bit further (sorry if I am boring you Isitmebut, but I am going to continue with my musings for the benefit of those who are facing the REALITY of homelessness through profiteering landlords selling on a whim) reduced plans for the over 50s are part of the affordable home ownership scheme (although I do find it odd, that a lot of the ones I have seen are 2-3 bed homes, not sure that fits in terms of encouraging people to downsize, but there we go. I assume they would only be available to those with resident children under 25, possibly).

What I do wonder is whether we can make it attractive for a one off scheme for private landlords who are either shonky, don't give toss but operating entirely legally, or who do give a toss but are facing difficulties in riding the peaks and troughs (I'm not sure about what you mean around there being no standard peaks and troughs, of course there aren't, but you CAN look at how you would cope with varying levels of interest rates, plan for the worst etc instead of thinking oh well, I can always make someone homeless, and put the rent up if I want a new car/holiday of a lifetime etc) to sell to first time buyers from those in private or social housing to reduce the pressure on both. Surely the saving in housing benefit in the long term might make that worthwhile.

Clearly I am no expert and don't have easy access to the figures needed to provide you with a business plan exactly, but since you ask what I am suggesting should be done about it, I will. What needs to be done is put in place effective leadership who can assure, evidence and be open with us that SOCIAL OBJECTIVES ARE THE PRIORITY NOT PROFIT and that all possible ways of making that so are thoroughly, openly and properly assessed, rather than scoffing and ridiculing anything that isn't profit-driven. However, I may well be in la la land with that one.

There are plenty of successful Social Enterprises, these are what we should be encouraging more of.

And I am never going to bow away from asking questions or challenging the status quo, or be satisfied with being told "all you need to know".

Ok I'm just going to ignore the digs, I can see it is a wasted effort.

I see quite a few (2-3 Bed) houses on the market that our reduced for the over 65s, I don't know how that works but clearly it is possible to restrict and therefore not unreasonable to query if something similar could be possible in a solution.

How about a type of repossession for those unable to offer secure lets, with resale only to buyers from rented (private or social)?

HoopyViper .... re "but I have found elements of your posts to evade, twist and patronise", don't worry, I get that a lot when other posters don't want to hear the truth - especially if they keep repeating questions that I have addressed and conveniently don't want to take it in.

Re this "reduction in the number of unstable lets" you keep going on about, lets say this is both quantifiable and worthy of more State/social/housing controls, WHAT are you suggesting is done?

Who benefits from this bank or State property seizure, , other than property bargain hunters?

Who says that everyone who buys one of these homes is not CHANGING homes e.g. moving up or down the ladder, or currently living at home e.g. not renting - which just results in the reduction of rental properties?

No 'ifs', just iffy. lol

Well at least we cleared that one up. Perhaps you can forgive my line of questioning, but I have found elements of your posts to evade, twist and patronise; traits I am sadly too familiar with in those who carry political influence.

There was a thread on here very recently about this issue (of those with political influence seeking to manipulate social media) and it sowed a seed of doubt in my mind. However I apologise if my line of questioning has offended, it was not with malicious intent, nor intent to 'deflect' or discredit unduly. I detected a sense of robustness that might withstand, and I think I am correct in that assumption.

__

No-one can argue there are a shortage of rental homes. This is true. I do find it interesting that we more commonly hear of this as a "housing" crisis in general, not just a "renting" crisis.

Perhaps you (or anyone else) could help me understand why it is we couldn't be confident that a good percentage of houses coming onto the market, through a reduction in the number of unstable lets, alongside more housing development, would not affect houses prices enough to enable more people who currently rent to buy? (Especially with help to buy deposit scheme etc). Therefore reducing the number needing to rent?

(No if's there, I checked )

HoopyViper …. Back to Renting and what Mr Miliband and you ‘want’; there is never a bad time to tighten regulations to help tenants against bad landlords/practises, even if good landlords already think that the tenants have more rights than them – but if either of you are NOW trying to ‘socially engineer’ landlords to sell, having had Brown encourage Buy To Let for 13-years, I reiterate for the numty-teenth time, NOW is the wrong time based on REALITY.

NO ONE can argue that there is an acute lack of UK homes and shortage UK properties to rent, especially FOR THOSE WITHOUT THE OPTION to buy, whether homes were 10,20,or 30% cheaper – so any landlords selling at this time, especially due to any non commercial threats by the next Prime Minister,

There is no such La La Land condition as a standard landlord, with standardised costs/interest rate funding, with standard economic peaks and troughs, with standard investment aims and standard views for the need for 3-year Tenancy Agreements – so your ‘ifs’ are immaterial in REALITY, so keep repeating ‘ifs’ as if there was a chance a price fall and/or Miliband could ‘commercially engineer’ it as a base line for his reforms, is a nonsense, no matter how many times you repeat it – any trying will just REDUCE the available amount of rented properties.

The stupid thing is, WHAT YOU WANT re landlord professionalism, stability, durability and standard longer Tenancy Terms can, even was, going to be provided by the Private Sector via investors like pension funds who would also fund the BUILDING of more homes.

But as that link I provided confirms, the prospect of Miliband’s legislation a year from now, even in it’s current form of ‘intent’ (with heaven knows what will follow), is very likely to discourage further investment until after May 2015 and they SEE the final legislation.

HoopyViper ……. May I suggest that you spend more time reconciling your opinions of what you’d ‘like’ in socialist La La Land, with cold commercial reality, rather than be so concerned about another poster’s politics/status who is both speaking common sense and qualifying their opinions, re the current dire housing situation and the commercial possibilities that can help it?

I have started/posted on many threads on Mumsnet and it is clear I have Conservative economic views over Labours, as the former is at least sustainable, the latter always takes us to economic ruin - but I have never been an MP, Member or anything else within the Conservative Party – and sole contribution over my life time, was to deliver leaflets one year before a General Election, as I moved to a constituency with a thin Labour majority.

But frankly, I am so comfortable with my views/facts, I would not care if I was debating with fricking Miliband himself, in fact the more stimulating the debate over the REALITIES, rather than La La Land the better – as posters won’t need to ‘deflect’ and personally try to discredit the other poster(s).

Regarding my politics, I don’t hide it, far from it

Is that political wriggle speak for saying yes, you are professionally involved in housing policy for the conservative party?

Crumbs. I'm not exactly missing John Hemming, but he didn't hide and made it clear who he was.

Isitmebut, perhaps you could read what I post, rather than the usual Tory defense mechanism of twisting it to suit your agenda and trotting out tired old cliches, IME used only when losing the argument. There is nothing in what I have posted which relies on MORE of other people's money, but LESS, PARTICULARLY IN HOUSING BENEFIT. In fact what I am suggesting would go a long way to ensure more people have more stability and therefore ability to earn and keep money of their own to support themselves.

The problem with being a fast-buck profiteering landlord is eventually people wise up and you run out of other peoples money to pay your mortgage. What has backfired for the landlord now is that the number of voting renters far outstrips the number of landlords, which apparently only Milliband has just worked out and seen the light. We will have to wait and see whether the masses feel more strongly about this issue or Europe.

I have stated throughout that we should do more to support accidental landlords. Acknowledging the source of their plight (bad practice) would be a fine start. As I have stated over and over again, is that if a landlord is so vulnerable to short term changes, they shouldn't be in the game and their losses are their responsibility, not their tenants.

What we need to do is provide better opportunities for people to invest elsewhere, so they are not so precariously reliant on the short term instabilities which will likely always exist in the housing market. Vast profits CAN be made, but it is high risk in the short-term, and usually depends a lot on luck (and that really is what it boils down to).

Just what is wrong with buying a sensible property to let out long-term?

If you haven't put enough by to ride out the peaks and troughs, then it is not something you should be taking on, or you have to cut your losses and move on, same as any business. Do something else more useful with your money to begin with. Dave was crying out (though gone a bit quiet on it) for people to become the Big Society, let's see it.

Jane, Most private landlords have 1 property they rent out only and they are almost the biggest sector I think for letting out in the UK so private landlords are a huge part of the housing market in the UK.

Do you have any stats to back that up?

Prices might stall for a bit if interest rates start to rise which may put off investors. However the pensions changes mean those with say £20k in a pension might choose to take it out as cash and put it into a buy to let (or pass it to their children as a deposit). it is hard to tell. Those who did very well in property compared to other investments tended to borrow 75% so their gains were all the more than someone putting the same basic deposit without the borrowing to buy most of the investment into say shares. It was the gearing which made the biggest difference.

Most private landlords have 1 property they rent out only and they are almost the biggest sector I think for letting out in the UK so private landlords are a huge part of the housing market in the UK.

I am not on the left but I agree that if Milliband wants to do what he seeks to achieve - drive landlords out of business and have institutions and the state letting to private tenants then he needs much more radical methods than he has proposed.

I like Boris J's suggestions this week for London's issues - perhaps build on the water - Thames; secondly allow OAPs to downsize without paying stamp duty or give them some kind of exemption from inheritance tax when they die, to free larger properties for the young to increase the supply . In London (but by no means everywhere else) there is a shortage of housing. That is not the case in much of the rest of the country.

JaneParker ….. interesting comments, thank you, so once again Miliband offers sticky plaster solutions to complicated social problems, that sounds good to the electorate.

But as his policies still needs private sector money, he is likely to deter the private sector currently investing and/or putting in new money – especially as there are other market forces for them to consider as well e.g. interest rates rising from all time (Base Rate) lows affecting profitability/yields.

A problem I see in the next few years is when UK Government Bonds and other high grade bonds, offer better annual yields for investors than those renting properties, without the rent voids, insurance costs and general crap of dealing with the day-to-day problems being a landlord throws up at you.
www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/10743997/Could-now-be-the-worst-possible-time-to-buy-to-let.html

HoopyViper …. So basically you are not thinking for one moment of the concerns/feasibility of the investment for those putting up their savings and taking the risks of buying and letting out properties, you are for State “manipulation” and social engineering of markets - no matter what that does to lower the availability of properties to rent for those with no other choice but to rent – who said ‘the problem with socialism is eventually you run out of other peoples money’. Lol

As to your problem obtaining security of tenure in social housing you mentioned and enquiring about my life – in short I remember the 1970’s so I’m old and have globally followed politics and markets like interest rates/yields (see below) with great interest for years, so I generally know how ‘markets’ work, especially what kills them e.g. the threat of head-up-bottom thought through socialism on the private sector.
www.mumsnet.com/Talk/in_the_news/1977704-UK-Interest-Mortgage-Rates-WHO-S-in-control

As to knowing about homes, I started life until married in council properties, and during my life I have lived in my own homes, lost them, bought a property for an elderly relation to live in and then rented it out until I got stiffed on the rent I could not afford and sold it too early, rented for several years in the private sector and rented another council home – in no particular order.

Regarding my politics, I don’t hide it, far from it, but we are not talking ideology here, we are talking cold financial realities of the effects of State controls on the Private Sector being touted as populist solutions to huge overhanging problems, that the Public Sector failed to address when it had the money and is now clumsily, nay dangerously, trying to compensate for.

You are right JaneParker, Labour's plans don't go nearly far enough.

Yes, my point was that Labour's reforms are nothing. Landlords will be able to get the property back if they want to move into it (which means no security of tenure other than the current one year etc) and second rents will still go up once a year as they do now based on other local market rents - i.e. no change at all therefore I don't fear these landlord reforms at all and they will not help tenants much at all. The requirement that the landlord pay for credit checks and other charges will be added to rents so won't help tenants either.

I am that bulbous, paper-skinned poster, Hoopy, just using up the last of this month's name Got to bugger off for a while now, but for the welcome!

Oh good Garlic. I'm glad you've come along

Assuming you are the usual Garlic something on these kind of threads?

How can he cap rent rises? Private landlords can charge what they like

Haven't read all posts, so am hoping someone's already pointed out that rents have always been capped until recently. Fair Rent Act.

'Killing the BTL market' will be no bad thing, imo. It's nothing but a self-imploding bubble.

Oh, and speaking of Lording it up, there is an interesting petition currently running on 38 degrees regarding potential conflict of interests and to “Stop two Lords who are directors of Mayfield Market Towns from building 10,000 houses on rural Sussex land turning a wildlife area into an urban, concrete sprawl.”

And, interestingly, Sussex Wildlife Trust (already quoted on this thread!) are particularly anti the development, due to it being a site of National Importance with respect to the UK Barn Owl Recovery Programme. It also is an area which straddles the River Adur Corridor – you guessed it, a flood plain!

HoopyViper ….. are you not contradicting yourself, as on the right hand you want to ‘encourage’ private renting, and then on your (far) left hand, you want to make private renting ‘unattractive’ to landlords – with that joined up policy thinking are you Ed Miliband in disguise?

No, I am being quite clear. I would like to see STABLE renting encouraged where it is needed, only by those who can ride out the peaks and troughs in an uncertain market, who truly see their property as a long term investment. Not those with short term market concerns and who are clearly out to make the most profit in the quickest possible way at the expense (literally) of their tenants.

Then, those actually doing the work to pay off the investment and actually providing the long term revenue (i.e. the tenant) I believe, should be able to choose the length of their tenancy within a reasonable timeframe, of say 3-5 years. I don't see a problem in a tenant ending a contract early should they wish to move on, perhaps IF they are able to find a suitable replacement themselves, or pay for the advertising through a letting agent. I would think that perfectly reasonable.

Before I go on, let me remind you that this year was the first year that private rental accommodation has grown to become the largest provider of rented properties, and the numbers involved is around 4 million people.

That "4 million" is an interesting figure. When they are providing something like 9 million homes? It really is a big boys game, isn't it? That is at least 2 houses per Landlord, or more likely, a small proportion struggling with their own personal finance, and the rest lording it up with vast portfolios.

Either way, up to 10% selling up would release nearly 1 million homes onto the market, and as I say, I think it very likely the number actually needing to rent would probably drop drastically, or it COULD, if we enabled it through sensible and sustainable plans and keep social objectives at the helm.

And re: stating THIS and THAT will happen - again no, I am suggesting and questioning how we could manipulate the kinds of outcomes I would like to see, if we had a desire to. It is your assumption that making landlordship (or whatever you like to call it) less attractive, will reduce the number of rental homes without affecting the number of those requiring a rental property. That is the biggest assumption I can see on this thread.

Btw, you ask if I am Ed Milliband, clearly I am not as I don't think he is currently facing eviction for the 3rd time in 4.5 years resulting in being placed in social housing. But since you are asking, I am interested in your background. Pardon me if I am wide of the mark, or rude to inquire, but you seem very well versed in both the subject and conservative speak, and able to lay your hands quickly on a lot of "relevant" DM info to support conservative aims, are you a politician or professionally involved in championing conservative housing policy at all?

JaneParker ..... as "most landlords only increase once a year" (when I found as I looked after the place we never had rent rises for 3-years on two properties) isn't this a Miliband 'elephant gun' to a rental mouse problem re the minority of landlords?

And where is the draft policy/legislation, "linking market rents (exactly to what) is no problem" to whom and whatever mortgage funding costs/investment yield the landlord thinks is worthwhile?

And "getting tenants out" for commercial/personal reasons are allowed - if the landlord's has the ability to sell WITHIN a 3-year fixed term, they don't have within a 1-year term - what is the point of a 3-year term other than pretend to tenants that they have a guaranteed period of tenure?

The legislation is not as bad as being set out above. Most landlords only increase once a year and only if other rents locally go up so linking t market rents is no problem. Secondly you can get the tenant out of if you want to move in ergo the 3 year thing is just a smoke screen for the rules staying as they are.