Labour tackling the private rent market

[Pantone363]

guardian link

They seem to be the only party tackling what is a huge issue for a lot of voters.

"Thems the breaks" ...should be on the Labour Manifesto for the 5 million they left in 2010 needing social homes - as how are government controls limiting the private rental stock their policies encouraged, going to help them, unless you think they are all sitting on deposits of 10% waiting for prices to drop a bit and then buy?

We are not talking investments in 'widgets', there will be a heavy social consequence to pay for these controls, that every economist from here to Kathmandu will tell you is a bad idea as reduces the number and quality of properties for rent.
www.mumsnet.com/Talk/in_the_news/2364429-Private-Tenants-will-new-rent-tenancy-controls-reduce-security-supply

Sorry, maybe I've worded it wrong.

If you are buying a house as an "investment", you are intending to make money, you accept there is a risk, but you don't buy it intending to make a loss.

Landlords buy the houses for their own benefit, but some posters (and people in RL) come across as saying it is their right to be able to rent at a low price even if it means LLs are making a loss.

It is fairly simple, if there is no money in buying to let, then landlords won't invest in properties.

pausingflatly I have never been offered any discount to buy a house to add to my portfolio, I have paid the same as any other buyer would pay - why would a vendor accept less just to benefit me? Where is the business sense in that?

Oh I just love the way that landlords are so keen to present them selves as philanthropists providing a valuable service to society.
making out that if not for their efforts no one would have a home to live in

If there is no money in buy to let then landlords will need to liquidate their assets, they will need to sell to someone and if no one can afford their prices they will have to reduce them until someone can afford them.

Or do you think that the property will be bought by foreign investors?
We can legislate to dissuade this, other countries do.

Perhaps the properties would just be left empty, again that can be addressed by legislation.
We could be much stricter about what people do with residential property that they own which isn't their principle private residence

AutumnDragon ….. I fully agree with what you are saying, and to say the reason private capital investment INVESTS is totally lost on some.

I know that the taxpayers were ripped off by Labour’s PFI deals, but thought one of the best moments of the 5 Leader ‘Contender’ debates was when Natalie from the Greens said ‘we will not let private companies invest in the NHS for a profit’.

And I thought, don’t worry yourself, I don’t know of a private company whose shareholders will allow a contract where there ISN’T ONE.

But it goes to show that whether the Private Sector can fill any gap in the public sector or not, a profit is not in their vocabulary.

And it is a shame that there is this animosity to the private sector, especially if a government has a £87 billion deficit/overspend and NEEDS private sector help to fill in gaps – but government ministers don’t appear to trust their own non business brains to get a good deal for the taxpayer – as most private landlords were, compensating for a previous rubbish housing policy as our population grew so fast.

suzannecanthecan .... why do you assume that homes trade like stocks and bonds, where you call someone get a price, and settle within a week?

How many Landlords have just or recently entered a 1-year Tenancy with 3,5, 10 years Fixed Rate Mortgages - as the government introduces new penal rules that any landlord not buying a property to let for cash, would be concerned about?

How does Landlords selling properties to buyers-to-own, from now until they end or can afford to end their Fixed Rate deal, either significantly lower prices in the short term, or take up the rental slack for those THAT CANNOT AFFORD THEM?

private landlords were, compensating for a previous rubbish housing policy

interesting way of spinning it eh

trying to paint the landlord as saviour of the people, nice try but its a real long shot you know

people have always hated landlords

AutumnDragon, you keep making stuff up. No one on this thread has said tenants have a "right" to put the landlord at a loss, just as the LL has no "right" to make a profit. And no one had said LL were "raking it in" (although actually, as you point out, they are indeed planning one big rake-in when they sell).

And nor have I said you got a discount on a house price.

What you have is the ability to raise credit in the first place if you own property that you can mortgage against. Someone with a net rental income is also more likely (though of course it's case by case) to be able to afford a larger deposit than someone without that income - and who may themselves be paying out rent.

You are therefore able to pay a higher price than other potential buyers. And your ability to do that is why the estate agent sets the price high in the first place. In an auction you can actually watch this happening.

The "rubbish housing policy" being the selling off of perfectly good social housing that local councils somehow managed to build for decades, despite their poor old non-business brains. And an edict from central government preventing local councils building more.

Absolutely, Pausing.

And the Conservative's plan to extend "Right to Buy", if they are re-elected.

if we have right to buy social housing didn't that ought to apply to private housing?
Why shouldn't private tenants have the same rights as those in social housing?

really I think we need to rethink our beliefs about who has what rights when it comes to property.

A secure affordable place to live is a fundamental human need, there is a finite supply of places to live, in a wealthy modern democracy why should some be able to hoard property when there are people in need of it

suzannecanthecan .... here are the facts you call spin .... if a government oversees an average of 115,000 new homes a year, at a time of net migration was around 300,000 - you do the math.

“Labour's 'rent cap' row: how renting has grown, in charts”

“The charts and tables here show how property ownership is changing, who is renting – and for how much.”

www.telegraph.co.uk/finance/personalfinance/investing/buy-to-let/10800343/Labours-rent-cap-row-how-renting-has-grown-in-charts.html

“The subjects of renting and buy-to-let spark anger like few others and Labour's latest suggestion – that rent increases could be capped and minimum lengths of tenancies introduced – has added fuel to the controversy.”

“What are the facts behind Britain's growing army of renters? This graph, from the February 2014 English Housing Survey, shows that since 2005 ownership has been in decline relative to renting, which started to climb in 2000.”

“For the first time, according to this year's data, people renting from private landlords outnumbered social renters.”

and your point is...?

suzannnecanthecan .... I paint landlords, many of whom got squeezed out of pension savings by Mr Brown in 1997, as providing a service to a need - do you think all those that ended up on Shelters list can afford to buy, as if not, there is a reason why the private sector landlord took over the public sector provision for the first time ever under Labour?

Shelter (2009); The housing crisis in numbers – and the need for spare bedrooms, never mind homes.
england.shelter.org.uk/campaigns/why_we_campaign/the_housing_crisis/what_is_the_housing_crisis.

• Over 1.7 million households (around 5 million individuals) are currently waiting for social housing
• 7.4 million homes in England fail to meet the Government's Decent Homes Standard
• 1.4 million children in England live in bad housing. [3]
• In 2008/09, 654,000 households in England were overcrowded. [4]
• The number of new households is increasing faster than the number of house builds.

This is why the same political party encouraging private landlords to buy to let (including lowering Capital Gains Tax to a tapered 10% low) to then have policies forcing them to sell after May when they have no plans in place to build homes, is not only DUMB, but socially dangerous.

I said that you had spun yourselves as philanthropists motivated by the desire to benefit society by provisioning us with housing.

The truth is that you are opportunists motivated by the desire to feather your own nests at the expense of those who less fortunate who are now beholden to you for the 'privilege' of a roof over their heads ?

?Oh yeah the kind landlords with their social consciences battling on our behalf to alleviate the housing crisis,
a disproportionate number of MPs are landlords.
The ruling classes sold off the social housing to provide an opportunity for the rich to get even richer ?

And lo that's exactly what we go the gap between rich and poor is getting bigger and bigger as wealth is increasingly concentrated in the hands of the few while the many can barely afford a roof over their heads

Nice work landlords ?

Idiotic policy that does not raise my respect for Labour one bit. Landlords will find ways round it that will disadvantage tenants. For starters they will terminate tenancies rather than renew. Suddenly churn goes up, large numbers of people are forced to find new places all the time, forced to come up with new deposits before old ones are returned, and forced to do so to a strict timetable. Good news for rental van companies though.

Second landlords will keep properties empty for whatever the required period is to say old rents don't apply, it's a new rental property. In between they will find some other use so they don't lose money.

Third it will lead to a collapse in property values. That's bad news for anyone with a large mortgage who will suddenly find themselves in negative equity, unable to relocate if they need to, and only able to get a new mortgage deal with their current lender, who will have them over a barrel.

If I can work that out in 3 minutes why can't the combined brains of Milliband and Balls?

When you buy a house you save rent. That is the investment return you make minus expenses plus capital gain.

The decision of a homeowner is exactly the same as a BTL landlord.

I invested in the stock market and bond market for many years before buying a house. I made more money in the stockmarket. I bought a house 2 years ago because investment returns on bonds fell so far that I bought a house and liquidated my bond portfolio.

Many homeowners simply do not recognise they are LLs to themselves and never look at the investment alternatives.

Morebeta I think you are putting the cart just a little bit before the horse when you call homeowners "landlords to themselves". In fact, I think the concept of housing as an investment, rather than a basic need, is a bit part of the problem with the housing market at present.

So Suzannecanthecan, yes, I do think we need to fundamentally address how we think of who has a right to property, or rather, a right to a secure place to live, as a society.

If I can work that out in 3 minutes why can't the combined brains of Milliband and Balls?

it really depends on how the policy is implemented. all three of the things you mention are problems if you don't give tenure to tenants. that means tenants can remain with only inflation rent increases, and they can only be removed for a small set of reasons (non payment of rent, sale of dwelling, LL wants to occupy etc).

other jurisdictions do this. this will essentially make the private rental market like the social housing when (without the rental subsidy).

no doubt there are problems with this, but it's done in other places and keeps rents down.

by the way, prices coming down isn't a bad thing for everyone.

What are you not getting on the demand-situation, if as likely many landlords sell due to Labour's new state controls (and are not replaced due to those controls) - and Labour still has its decade long finger up its own butt still THINKING about providing homes, rather than offering a plan to actually provide the 200,000 a year in their manifesto - how will that help those who have no option other than to rent?????

The (2004) Barker review: key points
www.theguardian.com/money/2004/mar/17/business.housing

“Kate Barker, a member of the monetary policy committee, was asked a year ago by Gordon Brown and the deputy prime minister John Prescott to carry out a review of the housing market in the UK.”

”She was specifically required to look at what was behind the lack of supply of housing in the UK and the inability of the housing market to respond to this. Also within her remit was the role of the house-building industry, the level of competition within it, its capacity, technology and level of finance.”

“The main findings”

• In 2001, around 175,000 houses were built in the UK. This was the lowest number since the second world war. Over the past 10 years, the number of new houses built has fallen and is now 12.5% lower than in the previous decade.”

Etc etc etc.

And that was PRIOR to them knowing we'd be the the preferred destination to economic migrants from 2004 onwards, and the current jobs factory of Europe, creating more jobs that the whole of Europe put together - so the INCREASED DEMAND from external demand will continue, at least until the UK economy crashes again.

'other jurisdictions do this'

This isn't other jurisdictions. There is massive unmet demand and that will continue. There is also an investment bubble, and those never end well. They either continue (bad for everyone, including investors with relatives) or the burst spectacularly (bad for anyone with a mortgage who finds themselves in negative equity and on the banks hate list, tenants whose landlords have mortgages, and oh yes, anyone whose pension is invested in property).

Isitmebut my understanding of supply and demand is such that, generally speaking, if supply increases, then price falls....so surely if many landlords sell up due to increased regulation, house buying prices will fall and there will be fewer people "who have no option but to rent". So demand for rentals will fall because more people can afford to buy.

This does not (directly) address the general undersupply of housing in this country...but then neither does buy to let, as the flats bought are often from existing rather than new stock. Yes, when property prices rise, it is arguable that more flats get built (although, as has been seen in London, they can then get bought, not to let, but to stand empty)...but then again, when prices fall then it becomes more feasible/affordable for social landlords to purchase land, build houses etc.

So regulation of the private rental market, and any resultant price correction, are not the only measures needed to see enough decent, secure housing for the people in the UK. More actions are needed- increased social housing provision, rezoning land, measures to counteract properties standing empty/land banking, many other things are needed.

But stopping rampant profiteering and exploitation during a national crisis scandal is a start.

It's not a rent cap as such. It's an agreement of variable length between landlord and tenant to have any rent increase linked to inflation.

If landlords don't like it, they can go a shorter tenancy or ask a higher price at the beginning. What it stops is landlords going in with a low price, knowing that will raise it once tenants are in the property. This is quite predatory, in itself, because they know that people will have established themselves in the area for schools, etc.

It really is no big deal.