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

I think she should leave well alone until many more houses are built . They always have to mess up markets .

Oh that's nice of her to use other people's money like that.

Then evictions (and homelessness) will increase.

Mortgage rates are going up.

I felt during covid that private rentals was slowly turning into government seized assets. Dramatic but it's sliding that way. What with section 21 coming to a end and now this, lots if tennants might be giving section 21s in the next few days while they still can as jumping the btl situation gets harder and harder.

This.

I don't understand the hate for landlords and for renting. I myself needed to rent at various points in time of my life:

1. when I was young and straight out of uni
2. When escaping an abusive relationship
3. When moving cities for jobs

Landlords are not all evil, there is a genuine need for rentals.

We're going to end up with only having huge corporations as landlords. Individual landlords pay a lot more tax than a corporation. We all benefit from having more choice when renting.

But if this is what the people want, so be it. I own my forever house now so good luck to all the socialists who think this is going to benefit them in the long run.

And the renters reform is on yet. So if I had tennants I'd be raising the rent today. Before the 1st of May. Then her proposal would mean nothing at best

But there is limited help for you as a mortgage payer because you’re gradually acquiring an asset that will likely appreciate. You also may have options such as renting out a room, renting elsewhere and letting out your home, downsizing. Then there’s going interest only or taking a mortgage holiday, or extending your term, whilst sitting in your appreciating asset. The renter has none of those options.

Oh yes, we can absorb the cost so they can't carry on funding, supporting and enabling those narcissistic word leaders to carry on with their war & genocides in the middle East.

I had planned to NOT raise any rents this year on my rentals, but due to this, I'm likely to raise them ASAP, as I don't trust Labour not to stick at a 1yr freeze.

I do strongly disagree that the Government put so many restrictions on LLs, as if we're the enemy, despite us providing an essential service, all at our own financial risk. We're now taxed more too, just for being LLs. No other private business is scrutinised in this way, to my knowledge.

you’re going to raise your tenants rents (by how much?) due to a rumour in the paper?

Nearly all negative aspects of rent control, come from limited implementation. Universal rent control for all housing has little chance of any of those problems.

It should have been done long ago, and should be permanent. House prices should have been controlled long ago as well. But we are still living in a primitive system requiring never ending magical increases. We won't evolve and become better for a very long time unfortunately.

I still think you don't get it. Cost of capital is a concern to everyone. Large, institutional Landlords face the same issue at a higher level. Ultimately they need to be convinced that putting their money in the private rental sector will yield the best return compared to other options. Arguably they are more profit driven than traditional BTL Landlords.

It's also really important to note that where institutional investors are entering the market, they are favouring built to rent homes as opposed to traditional BTLs. These tend to be flats and 84% are in cities. They aren't going to be useful for lots of tenants looking for a different housing type or location

I don’t think she will do it.

Rent controls being counterproductive is something economists across the spectrum agree on. So I doubt that she or the Treasury would want to do it. If they did want to do it, they would know that the IMF, bond markets etc. would have a freak out if they did.

So even if she wanted to do it for short term political advantage, she can’t.

Sounds great. Private landlords shaft the working classes.

Well Labour are doing all they can to reduce available housing stock for renters. Landlords are simply selling up lock stock barrel, its just not worth it. Labour are idiotic, workers and renters suffer.

More punishment for the people who are trying to make their assets work while being bludgeoned by increasing mortgage rates. She won’t be happy until everyone is sponging off the state because they’ve been unable to save any money.

i can’t wait for labour to come up with an idea that’s actually about generating wealth and opportunity rather than yet another Trotskyist redistribution of wealth.
signed: small business owner who has just had to make two people redundant due to a downturn

The problem is she’s not an economist and has a fairly shaky cv. Was pretty much customer service

The government have certain groups of people who they believe their voters have no sympathy for (landlords, private school parents, higher rate tax payers, farmers etc) who they feel they can shaft and no one really minds. That this doesn’t raise that much money is neither here nor there. Someone needs to have the finger pointed at them apparently and I suppose it is better than it being pointed at people on benefits or asylum seekers like other parties do. Notice no one points the finger at themselves, billionaires, the aristocrats that own every scrap of land and so on.

I know what your saying is right, but as a home owner there will also be the expectation for that to fund elderly care - whilst those who don't own their home will be funded by the state. But that's a whole other discussion!!

Def sign ownership of your property to your kids in enough time not to have to sell the house for care ... or be liable for IHT

We privately rent and I disagree with it - it was hard enough to get a rental there are less around as very little incentive for landlords to let

you’re not defining how you’re applying cost of capital to this situation. I’ve worked in real estate development for a long time and it’s rare for an opportunity like a new rental / shared ownership / market rent / market sale mix to not meet cost of capital, which is much lower than internal hurdle rates.

Institutional investors have entered and now slowed down entering the market, and represent a really small % of rentals (if you’re referring to your L&Gs, Lloyd’s etc)

large landlords are insulated from the shocks BTl landlords can’t cope with in a number of ways— volume, asset valuation methodology, cashflow availability.

Put simply, all capital has a cost. It's either the cost of borrowing (I e. Interest rates) or the opportunity cost of capital you own being utilised elsewhere.

Institutional investors literally look for the best investment. They have entered the private rental market because it is a useful diversification and shields them from some of the risks and volatility of other investments. The fact that interest rates are high will impact their decision making as will other opportunities. Only certain types of property and investment will meet their threshold

Larger landlords are more insulated but they are also more strategic in what they buy and where. This will lead to changes in the supply of property available often to the detrimental of the renters. If you're looking for a nice family home to let in a village then you will increasingly be out of luck

This isn’t really how it works. Cost of capital (generally WACC) is the companies COC, not general interest rates. Institutional landlords don’t borrow a fresh for each investment, their loan portfolio be will long term and well established.

institutional investors ie pension funds are a small part of the rental market in theUK. as I said above, they entered 8,10 years ago and haven’t found it particularly successful for them and haven’t grown their maker share at the rate expected.