Landlords response to Labour proposal

[Stellaris22]

Surely it’s becoming increasingly difficult to defend landlords.

In response to proposals to make renting fairer and better for tenants landlords have responded with typical ‘we’ll increase rents’.

Yes there are good and bad tenants just as there are good and bad landlords. LLs need to stop the saviour attitude of thinking they’re helping people who can’t afford to buy. They can’t afford to buy because of their high rents!

Good to see Labour (hopefully) tackling the private rental sector.

well i bought my London flat from an ex landlord. Landlords in London tend to own flats rather than houses due to the capital required for a house. it is a 1930s flat but i was able to afford it as it fell 15% in price from 2016 to 2019. we were first time buyers on a relatively modest household income of £75k with a 15% deposit.

Foreign investors with that kind of cash to leave properties empty mainly come from 2 countries- Russia and China. Russians are not buying in London now for obvious reasons, and China is now experiencing its own property crisis plus capital controls have been imposed.Also London is hardly a wise investment for foreign chinese investors given what could happen to their assets if China does invade taiwan and sanctions are imposed.

HK/Singaporeans were also big buyers of property but now many wealthy Hongkongers have already bought in London (and are also moving here) so that kind of demand has petered out. There are only 5 million people in Singapore so naturally there is less material impact. Wealthy europeans are less interested in London due to brexit.

This is a big reason why central London flats have experienced up to 40% fall in value in real terms. yes there is leasehold and cladding scandal, but brick built mansion flats in Kensington are often share of freehold and the eye watering service charges are not a huge consideration in that price bracket (they also pay for services the rich value like porterage). Yet they have seen huge price falls. This has a knock on effect onto outer london.

For what it's worth it's called an express prohibition, and forms part of the trust prohibiting the trustees selling the property. The property forms part of a large estate, all tied up in trust to various life tenants and remaindermen, my cousin has the big chunk and farm. No way it could be broken, least say solicitors, we tried in '96 then again in 2017, no dice.

Point I'm making is many of us really didn't want to be a landlord, but if you inherit something with strings or a sitting Tennant, what to do.

If the tenants leave of their own accord, I'll probably let my cousin Air bnb it rather than getting new tenants, but I hope they stay long term.

Thank you. But that is, I’d suggest, a very rare situation. It cannot be remotely typical of so-called ‘accidental’ landlords.

The standard ‘accidental’ landlord on MN is left a property in the usual way, unencumbered by trusts, entails, remaindermen, title to unregistered land and all the rest.

Anything in London, foreign buyers will snap them up in a second to add to their investment portfolio. It’s not all luxury flats either, Tower Hamlets is 3rd!
https://www.cityam.com/no-brexit-exodus-foreign-homeowners-sit-on-45bn-worth-of-property-in-london-alone/

On a 2 bed terrace in Slough, I am seeing prices of £450k. A meagre £60k deposit would mean your fictional lived in childhood home for 5 years (23yr old?) couple would need at an absolute minimum a combined annual salary of over £130k to meet the affordability requirements for the £390k mortgage with monthly payments of £2,315.
https://www.rightmove.co.uk/properties/150553673#/?channel=RES_BUY

The time likely hasn’t come with only £60k for young first time local buyers.

Wow it has moved on since my time. I was 23 (2016) when I moved into MIL's house with DH (married at 22)..we saved £20k per year, my starting salary was £18k, his was £24k (30k with over time). By the time 2018 rolled around it was £46k for him (£4k bonus) and £24k for me (£1k bonus). £75k household income in total. Dh had £10k from bar mitzvah money and gap year savings. So £70k in total by 2019. Our deposit was £58k and we took out a 2.05% £334k mortgage in 2019 on a 2 bed £392k flat in zone 3. I was 26 and DH was 29. I was still on a visa so didn't qualify for many mortgages on the market.

We were also looking at high Wycombe where we had an offer accepted on a 2 bed terraced house for £300k (wheelers park high Wycombe you can look it up) but dh decided we should stay in London zone 3 as it was where he grew up, where his mum lived and he didn't want to pay the rail fares. Our flat's freehold was owned by the leaseholders and it was a 1930s walk up flat with £150 per month service charge compared to the very high rail fares.. my flat was purchased from ex landlord who was selling up and it was empty.

I honestly thought slough would be like high Wycombe price wise , my mistake.

We had a 40 year mortgage (I decided then that i wanted to keep mortgage low at £1020 as I thought we would have a little accident baby but we didnt know we would have fertility issues) but as there was no baby we made sure to overpay £600 per month. Our household income has also increased to £121k per annum so far less than the £130k household income! We have remortgaged and our new mortgage is £1282..

@ginger2026
Yes that’s the crisis as things have moved on quite a bit in a relatively short time. What was possible for young adults even 5yrs ago is now out of reach.

It is truly shocking.

It is very sobering and I do worry for my DC if this is not tackled by the government sharpish.

Yes and the rent for the same flat I bought is now £2k (i know cos 70% of the flats in my development are rentals and often advertised on rightmove). The difference between my mortgage + service charge and rent is now £500... when I bought my flat in 2019, the rent for the same flat was £1400. That is a 42% cumulative increase! People keep talking about london flight but for some reason the rents just keep increasing.

Actually just 8 years ago, the flats were 70% owner occupied but now it is the reverse and dh is the only director on the residents management company who actually lives there. The rest are what are termed as accidental landlords.

The problem that the space liberated by landlords selling will just be taken by those in society who are better off, can afford to buy and want more space meaning an overall net loss in the number of people housed.

A five bed house rented to six individuals (with one reception room used as a living room) could easily end up housing a family of four or even a couple meaning a net loss of two to four spaces.

Rented accommodation tends to be more densely populated because people renting are poorer. No guarantee at all that any of the people currently renting in shared accommodation will suddenly be able to buy a one bed flat even if house prices drop a bit.

I guess labour's view is that it's short term pain for an outcome that most of society would be happy with- more homes which are owner occupied.

Whether they are owned by singles, couples or families, a home that returns to owner occupation means a stable home for its inhabitants and hopefully one that would be more affordable for them in the long term against inflation.

I am 31 and my generation voted for labour, and one of our chief concerns is the housing crisis. Even those who own our homes are concerned cos we know of too many who are in insecure accommodation.

Alot of landlords are selling up now too much hassle.

It's excellent news that private landlords are selling up. A new supply of housing to the market should improve affordability for people to buy their own home. There will be the same number of homes overall but the proportion of homes that are owner occupied will increase.

@Princessfluffy yes that’s exactly how it will work said nobody ever. There is a massive problem with housing right now and this will make a sticky situation chronic of course in an ideal world it be be this but it won’t be

@GasPanic

you are being deliberately obtuse.

Accidental Landlord is a well known phrase for someone who didn't set out to get a property with the sole intention to rent it out.

sitting empty is not good for a house & unaffordable for most.

it is also dreadful to have a house sitting empty & people homeless

there are many ways of becoming an AL.

my situation is my Mum lives overseas, she's (like us all) is getting older & would appreciate hate dome company & support. That country has been her home since 1977 & is where her friends are, where she lived for many years with my Dad (before he died) She doesn't want to come back to England. She can't really anyway because the way the residential village works, she wouldn't get market rate for her house.

do I'd like to go there to spend some decent with her 2-3 years. I can't live with her due to the rules of the residential village & because as much as we love each other. Living together in what's basically a small bungalow would not be workable.

i can't afford my house to be sitting empty, I can't afford to sell here & buy there ?housing is even more expensive there) then if I sold here, I couldn't afford to return here & buy anything.

the only way I can even begin to think about going there to support her would be to rent my house here out, so the (smallish) mortgage & CT, etc are covered. Then look at renting there or spreading myself around friends for a couple of months at a time.

ironically zi used to have rental properties there, where the houses were kept in tip top condition, tenants could have them as they wished, and we didn't inspect them every 5 minutes. Sadly each needed to be sold when tenants moved out for personal reasons.

so whilst I technically have a choice to become a LL (again) unless I want to live my retirement homeless, I don't have a choice

and I'm bloody dreading it!

@Princessfluffy

🙇🏻‍♀️🤷🏻‍♀️🙇🏻‍♀️honestly do you think people that are struggling to pay their rent now have a secret house deposit just sitting there and mortgage lenders falling over themselves to lend them money??

I think you need a serious reality check

@Just4thisthreadtoday 😂😂😂

@Just4thisthreadtoday not necessarily. But as a FTB we were outbid in auctions by LLs repeatedly. Fewer LLs would mean people with deposits will now have more access to properties that would otherwise be bought to rent out.

@Stellaris22

yeah I get that too, but what about the current renters who don't have deposits to buy & will have even fewer properties available on the rental market?

it's not the properties being rented out by people with a couple of properties or an accidental LL that are the problem. It's the unscrupulous companies that have hundreds of properties on the books that just want to get max profit, with least amount of expense, that see tenants as a necessary evil & not people, that are the problem.

I feel like the whole thing is quite badly thought through. The proportion of households that rent now is less than it was in 1980. The problem is that the proportion of social housing has gone down massively.

If landlords leave the market without more social housing being built rents will increase and more people will be homeless or in temporary accommodation.

The houses sold by the landlords won't be reoccupied at the same density. Some renters will buy, others will be bought by young people currently living with their parents and families wanting more space. Fantastic for them. Not so fantastic for many people having to rent the moment.

Build the social housing and the private tenancies will naturally reduce. For the moment I would keep section 21 but increase the notice period to six months to give tenants more stability. I'd also tone down the landlord blaming rhetoric and change the taxation regime to stop more landlords selling and rents increasing.

My housing master plan

• vulnerable people and those in need have social housing
• students, young people and people who need to move around like junior doctors have private tenancies with longer notice periods
• everyone else who wants to buys

What I actually forsee happening is less landlords, rents increasing more and the government blaming landlords (not their own policies) and introducing rent controls to stop rents increasing, which lead to more landlords selling and rents increasing in a spiral.

There will end up being a benefit for those in a position to buy or upgrade. Maybe there will be more lodgers (who have very few rights) and a new buy to lodge style trend.

It’s an absolute mess I’ve been a landlord for 25 years - yes one of those vilified in the media even though I’m responsible and a good one so I believe.
However after having a tenant not report a leak costing me £90k that insurance would not pay then another one not paying resulting in me paying him out to leave as courts are a mess and take too long to evict then another one through an agency who paid the first month then nothing until 9 months later when he was court evicted. To say I’m done is an understatement this has been in one year I’ve changed to air b and b for 4 then sold one to a FTB let these clowns in government sort out their problems of their own making. Build more social housing stop blaming landlords for your lack of critical thinking

I have a colleague who pays cash in hand for her rental. £650 per month in east london without a contract. The landlord is a live in landlord and in addition to her own family of 5, she also rents out to 3 other people including my colleague all in a regular terraced with loft extension. Her previous accommodation was also cash in hand though the landlord didn't live in there, was probably unlicensed hmo.

Such arrangements would probably proliferate.

Section 8 is more complicated than s21 and needs a court hearing.
And presumably people could clear arrears to below 2 months and it's neutralised. There's an option for persistent rent arrears.

The courts are busy with s21 currently. That'll be replaced by whatever other section labour invent or alter.

There'll always be someone prepared to buy and rent. This interference in the market never works well for the ordinary people. And that'll include current landlords and tenants.

The demand for housing needs to overtaken by availability of housing. Every overseas student, every migrant, every adult child leaving the family home every couple splitting up adds to that burden.
Your rents are going up.

I have a colleague who pays cash in hand for her rental. £650 per month in east london without a contract. The landlord is a live in landlord and in addition to her own family of 5, she also rents out to 3 other people including my colleague all in a regular terraced with loft extension.

So they're lodgers? Isn't that how it works if they're in her home?

There are 45 properties up for sale in my small local town. The cheapest is £110,000 and it is move in ready. You can get a 9 bed townhouse for £345k. Bit shabby but basically ok.

For rent, there is a single room in a shared house. There’s a constant stream of fb requests for rentals. Property is incredibly affordable here but there is a desperate need for rentals.

Landlords have been driven out in Wales.