Rachel Reeves considering freeze of private rent?

[Locutus2000]

It's being widely reported suggesting the Guardians original article is correct.

Rachel Reeves is considering a one-year freeze on private rents to help tenants with the cost of living amongst the fallout from the Iran war.

I find the concept of rent control appealing but there's evidence they produce mixed results.

What does MN think? YABU - rent controls bad, YANBU - rent controls good

My parents have just this morning been served 2 months notice on their flat, after 8 years - the landlord says it's to get them out before the new tenants rights come into effect on 1st of May, and then she will have the flexibility to either sell, or rent it as a new tenancy at a higher rate if this rent freeze comes in.

They'll be ok in the long run, but now they need to find somewhere fast and anywhere they move will be more expensive now, even if it then gets frozen for a year. And the rent on their current flat is only going one way for any new tenant - up.

Will reduce the tax take too. Rents wont increase with inflation, therefore tax taken on rental income will not rise with inflation, therefore shortfall in projected tax take, therefore - income tax rises for us again! Probably in the form of thresholds remaining so there isn't civil unrest, which there would be if the general populous understood income tax.

Nah- none of this happened when the electricity price cap where introduced

social housing rents were not only frrozen for some years but actually reduced in some cases- no one hit the streets over their landlords taking the hit did they?

Nah- none l

The immediate result is that landlords will be jacking up rents asap to offset this vague threat. I don't think this government has a clue - and I voted for them.

I wonder what the issue would be with offering owners of unattractive homes a refurb which would bring them up to sellable value, on condition that they then are sold on the open market at genuinely affordable prices and with a small percentage going to the local authority. Everybody wins. Maybe that's the kind of price control that the next generations would actually thank us for. I know nothing about town planning so no doubt this idea has been tossed out many times before. Could it ever be done without private investment? Am I overestimating the number of unsellable, privately owned homes? But if you can manage to attract young people with solid, if not high, southern incomes, the local area will get a good and more or less harmlessly gentrifying boost which could work in tandem with state investment in the local area - it wouldn't all have to be the state dragging things forward.

There's also the issue with "ghost apartments" like in New York City - rent controlled apartments where the cost of renovations the landlord is supposed to do exceed the rent they are allowed to collect, so they leave them empty. I think they estimate that over 50,000 apartments are currently empty in NYC as ghost apartments, in a city with an absolutely insane housing shortage - which then pushes rents up for everyone else as there is less housing supply available.

www.thefp.com/p/why-new-york-city-has-50000-ghost

It's easy to get people behind punishing the private landlord - the true wealth and big business will never pay. 'Taxing the rich' will never actually mean that, it will sound good while not touching those who actually make the rules.

It’s worth pointing out that this wouldn’t apply in Scotland, Wales and NI.

I agree with the majority. It could end up damaging tenants if landlords just shrug their shoulders and sell up.

There are better ways to improve standards of living. As a pp said, review income tax thresholds. Another mentioned public transport.

Probably because she doesn’t want to increase housing benefit. She doesn’t seem concerned about mortgage holders.

Part of the reason I started the thread was the difficulty in finding objective opinions online - everything seems to be either landlord lawyers highly critical or the far left celebrating it unconditionally.

Doesn’t matter if landlords jack rent up immediately. The government will use frozen rents as a reason not to increase housing benefit.

If there's no profit, I'll sell my flat. It's a lot of work and I'm not going to bother letting it out if it costs me rather than benefits me. It's a cheapish flat, exactly what is needed right now. Reasonable rent.

This situation is bonkers. We're going to have whole families homeless if things go on the way they are.

The government will use frozen rents as a reason not to increase housing benefit.

Less public money disappearing into private pockets sounds good but won't bother those setting up HMOs which seem to be the latest gravy train.

If a landlord has seen their own costs potentially double as that's what some mortgage increases equate to, then why on earth would they raise the rent by some random general lower inflationary level. Do you see petrol stations doing that now that there is a fuel crisis and the costs of supplying petrol has shot up? Do you see any other business operating in that way when the cost of supplying the specific commodity they deal with as doubled?

Renters will be subject to interest increases in the same way as home owners will be. The cost of capital and therefore any money borrowed has increased massively. If you're living in a house with a lot of money owed against it then costs will increase whether it's owner occupied or rented. The only people artificially insulated from this will be social housing tenants but even the government is paying a lot more money on the debt accrued partially through building and subsidising social housing.

Rent control on its own is not going to work. Many other things need to be implemented to address the housing crisis along side.

One thing they need to do is raise the tax free threshold under rent a room. Currently it's capped at £625 a month including bills. It's barely worth the inconvenience of a lodger for that especially in expensive cities.

It would be wrong and unfair towards landlords and other people who are not renting.
There was an article on BBC today about extra profit BP made. That where I would look at.

Landlords can’t just charge whatever they want, no. Few people would pay 80% more rent it just because their landlord asked

tenancies are contracts and the rent increase would generally be specified in the contract, unless you have an unprofessional cowboy landlord of course

I hope you are right. My point about civil unrest relates to income tax thresholds in general, rather than specific to rental income. If RR increased BR income tax to 25% there would be uproar, but the boiling frog affect of freezing thresholds is poorly understood by the general population.

Increasing supply is the only way to sustainably reduce house costs. But that requires the government to actually do something so instead they will do economically illiterate policies.

My daughter is a renter and moves around a lot for work, it's almost impossible now to find her a place as so many landlords are selling up.

At least some of the increased costs which LLs are always whinging about - insurance, agents fees, maintenance and services - ate tax deductable business expenses so why are these passed on to tenants in the form of rent increases. I suspect that many dishonest LLs are double dipping by passing on the increases ro their tenants and also to the tax man.

Under the new legislation it costs a tenant only £47 to go to the first tier tribunal to appeal a rent increase which is above market value. This does not mean local market value per se. It means market value for the property. So a property which had not been maintained by the LL is not going to achieve current market value for the area without money being spent on it. This is the case for many long stay tenants when the LL suddenly tried to whack the rent up. Having a long stay careful tenant had saved them a shed load of money in maintenance etc. They forget about that and what it would have cost to have several families move in and out during the same period. They would have had to refurbish between each rental period.

MN hate private LL’s, they forget that their pensions are invested in huge companies that deal in letting residential properties.
The hypocrisy is real.

The average length of an AST is 12 months so most Landlords can potentially raise rents once a year even if the tenant has an AST. If you have a longer term contract then this is different but they're rare and being phased out anyway so everyone will be on rolling tenancies where Landlords can increase the rents once a year. There are rules that the increase must reflect market rates but as all Landlords are subject to higher interest rates it's likely that rents have generally increased a lot anyway.

Also rents wouldn't necessarily rise by 80% but rents on average have risen by 30% in the past five years. it's totally possible that a Landlord that hasn't kept apace with this and suddenly sees their own costs increase can increase the rent a lot and still be in line with market values.

@Itsmetheflamingo current tenants won't accept an 80% increase in their rent, so what the LL will do is what my parents' LL has done - give 2 months notice now to boot them out, and later re-rent at a much higher rate. If lots of other LLs are selling up, supply will fall, demand for what's left will rise, and there's a real chance someone will have no choice but to pay 80% more than my parents were paying and that will be "market rate" for their area if the same thing is happening across the board.

Given it’s only for a year, I don’t think it’s a big deal. I haven’t rented for many years but I don’t recall the LL ever increasing rent anyway so I can’t see this affecting much.