Page 7 | Emergency rent freeze laws passed !!??

happyfishcoco · 2022-10-10T11:51:47+00:00

Emergency rent freeze laws passed in Scotland and Welsh maybe follow. YABU = vote agree to rent freeze YANBU = vote for not agree to rent freeze https://www.bbc.co.uk/news/uk-scotland-scotland-politics-63164850.amp https://www.bbc.co.uk/news/uk-wales-politics-63131075.amp

AuntSalli · 10/10/2022 17:23

DeadHouseBounce · 10/10/2022 17:12

"why are there plans for lots of new house building?"

Maybe the government want this obviously planned housing price correction to go on for longer?

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Oh yes I forgot those that own the green belt land don’t bank it or anything for times when it’s most lucrative to sell 🙄
if there’s a house price crash, the builders will just stop building again as they have done previously when there’s been dips and they just sit and wait it out they have very deep pockets.

antelopevalley · 10/10/2022 17:23

@cyw It allows you to buy an asset. That is why most people are landlords.

Cyw2018 · 10/10/2022 17:26

antelopevalley · 10/10/2022 17:23

@cyw It allows you to buy an asset. That is why most people are landlords.

Yes I'm well aware of that, but I'm not "making a fortune" as pp suggested.
However, I am in control of releasing that assest if it all gets too restrictive, by evicting a young familiy and selling my property. There will be no winners with the current decisions being made.

peachgreen · 10/10/2022 17:26

Tough one. I agree with rent controls and BTL landlords using this as an excuse to up rents for no reason is grim, but equally I am having to sell my property (which I currently rent out) because I can no longer afford to pay the mortgage. This will lead to a lack of rental properties, no doubt.

ScotsLassie322 · 10/10/2022 17:27

Also, landlords are exempt form the freeze if they have an increase in interest payments.

justasking111 · 10/10/2022 17:27

Wales biggest landlords

ScotsLassie322 · 10/10/2022 17:30

Cyw2018 · 10/10/2022 17:26

Yes I'm well aware of that, but I'm not "making a fortune" as pp suggested.
However, I am in control of releasing that assest if it all gets too restrictive, by evicting a young familiy and selling my property. There will be no winners with the current decisions being made.

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Really? Why do you do it then? You must surely be making a decent profit.

ScotsLassie322 · 10/10/2022 17:35

As said above, there are exemptions for interest or property cost increases.. it's to stop landlords overcharging and making a lot of money from renters who often have no option to pay and then not be able to afford to save up for a deposit as their money is going to the landlord. Thank goodness I was renting when rents were not as high. It's disgusting that rents have increased so much (relating to before the last week or so with the interest rate rises, which doesn't impact this legislation is it's exempt). Interest rates were historically low yet rents were increased.

TheLassWiADelicateAir · 10/10/2022 17:39

Audioslaw · 10/10/2022 13:21

I got excited hoping this was England then. Thought Scotland had already happened though

I don't think Westminster hates private landlords the way Holyrood does.

TheLassWiADelicateAir · 10/10/2022 17:42

ScotsLassie322 · 10/10/2022 17:27

Also, landlords are exempt form the freeze if they have an increase in interest payments.

That's not correct.

They can go through hoops to get 50% of interest rate increases added to the rent but only if that figure doesn't increase the rent by more than 3%

lightand · 10/10/2022 17:46

DrDetriment · 10/10/2022 13:55

Millions of tenanted flats are caught up in the cladding crisis and can't be sold. They also struggle to get good mortgage deals if any. If rents are frozen and a landlord can't meet their costs the tenant will be homeless and the landlord can't sell so will have no option but to default. Everyone loses except the banks who get the keys handed to them.

Everything is so messed up that I wouldnt be surprised that that is what is wanted. Banks getting keys..

LondonQueen · 10/10/2022 17:47

Yucca78 · 10/10/2022 13:27

In theory I agree. In practice if private landlords cannot increase rents to cover mortgage they will sell. Isn't lack of rentals already a problem

Precisely this, people are quick to call landlords greedy but we don't do it out of the goodness of our hearts!

Cyw2018 · 10/10/2022 17:48

ScotsLassie322 · 10/10/2022 17:30

Really? Why do you do it then? You must surely be making a decent profit.

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Because the market was extremely slow at the time I bought with DH in a different area, and then due to slow market NDN who were desperate to sell sold via a "we buy any house" type company, crashing the 'on paper' price of my house. So I reluctantly (like many) became a LL due to circumstances. I then decided I'd be a 'good' LL, and wouldn't just evict tenants from their home on a whim.

First tenants there for 4 years, when they gave notice, it was a really bad time to sell again, as the house was being upgraded my Welsh government/green energy scheme, which was great (everybody loves free stuff), but the contractors where terrible at communicating or giving any time frame, so any sale would just have collapsed or dragged, without any rental income in the mean time. So again I was a reluctant LL.

Current tenants there since. Great tenants, really don't deserve to loose their home, but rental restrictions are ramping up as are interest rates, so they my well do.

Life doesn't always follow a straightforward path for everyone, and that includes LL.

TheLassWiADelicateAir · 10/10/2022 17:48

Speakeasy22 · 10/10/2022 15:33

This is just a cheap political move by the SNP. They are beholden to the Greens and landlords are a favourite target. Very short sighted. There is a massive shortage of rental properties. This will only make it worse. And landlords (in Scotland certainly) are already highly regulated.

Landlords in Scotland are very highly regulated, with severe penalties for non- compliance.

The majority of landlords are actually small landlords with 3 or less properties. They aren't generally buy to let- either.

Eeksteek · 10/10/2022 17:49

AuntSalli · 10/10/2022 16:58

Goes back to my original point 100% percent mortgages are on their way.

For some people that will work out really well and for other people who lead chaotic lives it will end in absolute disaster but it keeps the money merry-go-round going around.

The absolute last thing the government wants is people being able to retire on unearned income. And far too many people in their mid to late 50s have done that in the last two years so any obstacles that they can put in their place they will.

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@AuntSalli I’m wondering if 100% mortgages wouldn’t be a good thing? It would mean a lot of things that renters want - long term stability, ‘ownership’ over homes, benefit from low interest rates (if we ever see them again) no bastard landlord (except the bank). You’d build equity really slowly, but you’d own a home. Well, effectively you’d have a lifetime tenancy with the bank. The different between landlords and mortgage lenders is only the practical bit, really. Most of being landlord is letting a tenant borrow the cost of your deposit, as well as pay the mortgage (and repairs and regulatory stuff). It would cut out a lot of middlemen.

I think it would have worked when people bought a house and lived in it for fifty years. But people don’t do that now.

Tons (more) of landlords are going to sell up. If interest rates go up, that means you can put the equity in savings and get a decent return. That hasn’t been the case for decades. Who wants to be reviled and have to deal with tenants, when you could just the cash sit in the bank, instead? For many years there hadn’t been much of an alternative for small landlords.

TheLassWiADelicateAir · 10/10/2022 17:50

antelopevalley · 10/10/2022 15:46

@Jjones8 Good. We need buy to let landlords to leave the market. Buy to let was responsible for pushing house prices up amazingly high. Before the invention of these mortgages, house prices had to remain at the level that first time buyers could afford.

I don't know about England but buy to let landlords are only a small proportion of the Scottish private rented market.

TheLassWiADelicateAir · 10/10/2022 17:54

LizzieMacQueen · 10/10/2022 15:50

Sorry HRTFT do someone upthread may have mentioned this, but the law in Scotland ( to end of March only ) still has a get out clause - landlords whose expenses such as mortgage have increased them, the law simply doesn't apply to them.

That's not correct.

Landlords can ask for rent to be increased by 50% of increased interest rates but cannot exceed 3% of the previous rent.

Thebestwaytoscareatory · 10/10/2022 18:00

MintJulia · 10/10/2022 13:40

So, how would it work?

Interest rate rises. Landlord's btl mortgage goes up. Landlord is unable to pay increase on btl mortgage. Landlord is forced to sell to avoid bankruptcy. Tenant ends up homeless because new owner wants to live in their house.

How does that help the tenant?

Easy, the landlord will have accounted for increased costs while creating their business plan and will have both the capital and a system in place to deal with unexpected rises in costs, maybe at a reduction in profits until things settle down.

What? Many landlords don’t have a cash reserve or business plan in place? Many overextended themselves when taking out a btl mortgage and can’t cope with a slight increase in their business costs? Well, sounds like those landlords should never have been allowed to become landlords and it probably isn’t a bad thing to be getting them out of the sector once and for all.

Cyw2018 · 10/10/2022 18:03

Thebestwaytoscareatory · 10/10/2022 18:00

Easy, the landlord will have accounted for increased costs while creating their business plan and will have both the capital and a system in place to deal with unexpected rises in costs, maybe at a reduction in profits until things settle down.

What? Many landlords don’t have a cash reserve or business plan in place? Many overextended themselves when taking out a btl mortgage and can’t cope with a slight increase in their business costs? Well, sounds like those landlords should never have been allowed to become landlords and it probably isn’t a bad thing to be getting them out of the sector once and for all.

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Most LL do have a back up business plan, it's just not very palatable.

Section 21 and sell!

Badnewsoracle · 10/10/2022 18:08

Thebestwaytoscareatory · 10/10/2022 18:00

Easy, the landlord will have accounted for increased costs while creating their business plan and will have both the capital and a system in place to deal with unexpected rises in costs, maybe at a reduction in profits until things settle down.

What? Many landlords don’t have a cash reserve or business plan in place? Many overextended themselves when taking out a btl mortgage and can’t cope with a slight increase in their business costs? Well, sounds like those landlords should never have been allowed to become landlords and it probably isn’t a bad thing to be getting them out of the sector once and for all.

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Most of those landlords DONT have a buy to let mortgage. They have residential mortgages with consent to let. Usually given because they have struggled to sell or such. Those mortgage deals have expired and they are now paying a variable rate. And can't now get BTL mortgages as the yield is too small. Which is why loads have and are selling up.

Figmentofmyimagination · 10/10/2022 18:16

In Glasgow this September, the university was recommending to students part way through their degree that they either defer or give up because of the absence of student housing. This is a direct result of landlord reaction to the threatened rent freeze. Around 250,000 rental homes have been withdrawn from the market. Be careful what you wish for. Don’t invite students from outside Scotland if you can’t house them. Just be honest and tell them this is now a ‘commuter-only’ university, for Scottish students who live with their parents.

Grumpycatsmum · 10/10/2022 18:17

StillNotWarm · 10/10/2022 13:30

Lack of rental properties is already an issue, and this is just going to make more landlords sell up. It is only viable after a prolonged period of building and maintaining social housing.

This ☝️

JustAnotherManicMomday · 10/10/2022 18:18

Personally unless they freeze mortgages its unfair to freeze rent. Many home owners are feeling the pinch as well. I'm talking about those who only own one property.

AuntSalli · 10/10/2022 18:18

Thebestwaytoscareatory · 10/10/2022 18:00

Easy, the landlord will have accounted for increased costs while creating their business plan and will have both the capital and a system in place to deal with unexpected rises in costs, maybe at a reduction in profits until things settle down.

What? Many landlords don’t have a cash reserve or business plan in place? Many overextended themselves when taking out a btl mortgage and can’t cope with a slight increase in their business costs? Well, sounds like those landlords should never have been allowed to become landlords and it probably isn’t a bad thing to be getting them out of the sector once and for all.

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Actually most landlords don’t have a mortgage. And that’s the fly in the little house price crash ointment isn’t it ?

IncessantNameChanger · 10/10/2022 18:22

Thebestwaytoscareatory · 10/10/2022 18:00

Easy, the landlord will have accounted for increased costs while creating their business plan and will have both the capital and a system in place to deal with unexpected rises in costs, maybe at a reduction in profits until things settle down.

What? Many landlords don’t have a cash reserve or business plan in place? Many overextended themselves when taking out a btl mortgage and can’t cope with a slight increase in their business costs? Well, sounds like those landlords should never have been allowed to become landlords and it probably isn’t a bad thing to be getting them out of the sector once and for all.

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Of course most LL have a business plan. But when you think about 10% interest rates it's more of a "shit I hope that doesn't happen again" I could do 10% in theory , but do you know what? Now I have more kids and slmist two decades in this behind me, I wouldn't want to, when it comes to it being a possible reality with rent freezes and ever increasing energy restrictions, and removal of section 21s. Then the whole package means its too much. If they introduce the new energy ratings as law, I don't have the 10k sitting in the bank. On top of increasing interest rates.

If I was to sell I think it's far more likely an investor will buy my house then it being sold for under 100k. I just can't see a glut of 40k houses flooding the market. My house was bought for 135k. It's 300k now. How low would it need to go for a renter with no deposit to buy?