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.

?
I think restrictions on property ownership might be a way forward, as well as (as mentioned) properties left empty and land banking.
A property price correction is bound to leave many people in a painful position but perhaps it is better to try and manage it in some way than to wait until unforseen factors cause a crash?

Problem is that the people who benefit from the bubble have the power and influence to perpetuate it.

It can all be traced back to Thatcher, financial de regulation and the selling off of social housing leading to the ever rising curve of inequality from the 1970s to the present day ?

I think we need to kill this belief that anyone with enough capital has the right to a property portfolio, ie the right to line their own pockets by exploiting the basic need for a place to call home

There are some good statistics on why it's easier for BTL buyers to afford housing than owner occupiers, especially first time buyers, which puts landlords at a competitive advantage when buying properties - and how this has changed since the 70s.

I'll try to dig them out. They looked in particular at multiples of income and available deposits, and gave a good indication of how the 'owning' market has had a huge shift that favours BTL buyers in the last few decades, which has the knock on effect of increasing the 'pool' of renters (who then need to be rescued by good-hearted, philanthropic landlords, natch).

yes the landlords have got it all sewn up, when they own all the houses where will they invest next?
Buy up the schools and hospitals perhaps, we all need education and health care so plenty of profit to be made in those areas ?

suzanne hates landlords for making profit out of a need (i.e. shelter). Presumably she has the courage of her convictions. So she works for free and does not buy any food (thus giving profit to those providing a human need), clothing (ditto), water to flush her toilet and so on.

very impressive.

That's a pretty hamfisted attempt at argument by analogy Special

MoustacheofRonSwanson …. Your generally speaking understanding of ‘supply and demand’ is correct - with the proviso that the CURRENT supply vs demand equation is somewhere near balance, and that the majority of those renting have the cash deposit/mortgage loan to buy a home on any price dip – which is 100% incorrect.

The problem of an adequate ‘supply’ started around 20-years ago, and as The Barker Report commissioned by Labour in 2003 (and reported in 2004) pointed out, 175,000 new homes a year in 2001 was not enough with organic population growth, recommending we needed over 200,000 new homes built a year, back then.

From 2004 to 2010, the UK’s net EU and Non EU citizen immigration figure (needing homes) was between 2 million and 3 million depending on who you listen to, Labour or UKIP lol – while Labour averaged around 115,000 new homes a year, clearly far fewer than those needed in 2001 – so the average home price rose from £73k in 1997 to *£232k in early 2008, exasperating the affordability issue of ‘demand’.

So with those totally inadequate new build figures, and a financial/economic crash biting from 2008 - restricting substantially both mortgage lending and building confidence/activities, resulting on skilled building labour leaving the trade – the EXISTING total UK housing stock is, I reiterate, totally inadequate, for new social engineering experiments.

Therefore with a near 20-year housing under build, the UK population still benefiting from 200,000 annual net economic migration, our ‘organic’ population accruing faster than 2001 due to previous economic migrants – why on Dave’s Green Earth do you think that with all that PEND UP demand, homes prices will stabilise, never mind fall, if private landlords sell?

Especially as those tenants being asked to find new accommodation, still need to find another rental home in an overly tight ‘supply’ home market place, with a decreasing rental home supply.

So build, build, build, and BUILD, is the only short to long term solution to our housing problem – so where are the ‘concrete’ plans to do so, as if government in not going to fund this mass building project, who will, if not an investment confident private sector?

The notion that a Labour government, known for log jamming red tape and an inability to build homes in a money no object boom;

Can FORCE the builders to invest in more land and build beyond their current land banks.

Can FORCE banks to lend to builders and buyers when already buckling under regulation, taxes and proposed ‘splitting’ reforms and can FORCE empty properties to come onto the market when Prescott tried and failed – is at best a short term sticky plaster and at worse, gesture politics.

Suzannecanthecan …. No one can argue that bad private landlords need to be stamped out, so sensible reforms to do so by any party can never come in soon enough.

But I suspect that your opinion is that any private landlord is a bad landlord and zit on society, just as everyone in a council/social home with a spare bedroom, had an iron lung (or at least oxygen tanks) stored in that bedroom.

The ‘Spare Room Subsidy’ or renamed ‘bedroom tax’ by those MP’s who left 5 million citizens in a queue for social housing, was brought in as ‘a start’ to that huge inherited social problem, in order to free up as many of the 800,000 spare bedrooms across the country as they could – but practically ‘supply’ was going to be the main problem, as the coalition also inherited the lack of home builds in the pipeline problem.

Otherwise in a perfect world, those in council/social homes remain in a (smaller) council/social home and mainly being inconvenienced of having a spare bedroom if family member wants to stay over, while several hundred thousand of the most vulnerable UK citizens within that 5 million social housing queue, especially families, gets the use/platform of a council/social home that had a spare bedroom or two, to better THEIR lives.

Now look at the Labour plan, and there is a clear and present danger of those currently renting privately, over the next few years and beyond LOSING the ability to privately rent, when the council/social rental market cannot take up the slack.

Which is the more fair approach to ‘the many’ when practically looking at emergency housing rental demand measures, rather than the ideological need to attack their perceived high tax rate wealthy, no matter what the consequences to those in housing need?

Actually don't bother answering, I suspect I know.

BTL landlords cannot be blamed for all the ills of the current housing situation: it's a combination of selling off social housing, banks lending less, not enough building of new homes, more of us living alone than ever before.

When I was renting, for 5 years, privately, I WAS bloody grateful for the roof over my head. We did not qualify for social housing & could not get a mortgage due to self-employment. Private renting filled a gap for us. We rented a lovely house in a great area, which we could never have afforded to buy.

Here in Scotland, landlord registration is compulsory & agencies cannot charge tenants fees for finding a property. It's a much better system. I did not feel exploited in any way.

I agree 100% suzanne

I am taking it for granted that there are great LLs and terrible tenants...got that out of the way.

The rental sector is HUGE issue for me.

A 2013 survey found just under 5,000 homes in my locality unoccupied. Over one-third were being "land-banked". I lived next to one of these about 10 years ago. It was empty for 2 years - caused all sorts of problems for me. A guy had bought it for his son who was at University and he was leaving it empty until the market improved. This also deprives LAs of council tax revenue. Utterly depressing.

This is not just about individual homes but entire communities. I feel like many private LLs have been a blight on my (relatively poor, northern) community. I can walk along all the streets around me and most BTLs stick out a MILE. Because the houses (2 or 3 bed terraces) look like S**T. LLs spend absolute minimum on upkeep - damp especially is a big issue in my area. So the areas look more and more rundown and that puts off FTBs - the downward spiral continues.

I know there are all sorts of "decent homes" initiatives, but most seem to be voluntary. Tenants mostly feel too vulnerable to complain and, in any case, "policing" the housing stock is just untenable for many hard-pressed LAs. I am also sympathetic to difficulties faced by LLs too.

I rented for around 20 years. I had one set of really great LLs. The rest were from okay to really poor. I have to say that, IME, the worst were those who BTL on the side (i.e. it wasn't their FT job). They were far more likely to treat me as if they were doing me a huge favour and were hugely reluctant to pay for basic repairs and upkeep - usually because they didn't have adequate provision to do so.

I think further professionalisation of the private rental would be a great way forward.

One once told me that she couldn't afford a new bathroom in her own home so she certainly wasn't going to put one in a BTL property. This was around 2003 and the bathroom dated from 1978. It was an utter health hazard. This attitude was not uncommon.

Isitmebut I agree that building more homes has to be done. But I don;t see why that makes regulation of the private rental market a bad thing? Unless what you mean is that the proposed regulation isn't enough? In which case I agree.

MoustacheofRonSwanson ... there is a huge difference between 'regulation' and State Controls that has the intended potential of changing the investment dynamic of EVERY private landlord, that wasn't in place when they made those investments.

Those changes can greatly interfere with the BASIC FUNDING of those BTL investments and the possible allowances of bank lenders not to change the terms of all current BTL loans to protect themselves.

How can landlords 'match fund' their loan/insurance costs, with rental income, to ensure any future positive return from here on, when interest rates can only go up much higher from an all time low (when CPI fixing the rent could remain a lot lower) - and open to any future whim of a further left drifting Labour administration, with a 'supply and demand' coalition agreement with a further left SNP.

The only result can be LESS private rental properties, when hopefully you now agree that those looking to bring in the state controls, were largely responsible for the dire 'supply' of total housing stock, we find the UK in.

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).

No, this isn't other jurisdictions, but why not look at what other places do, and do successfully?

If there is unmet demand, how is the intrinsic value not higher? there may be a bubble, but value has gone up because demand is unmet.

The underlying problem is too few homes, and rental controls do nothing to address that (it may in fact make the problem slightly worse). But even if this problem were corrected, rental conditions are still crappy in this country. People like security in rental conditions, as evidenced by the high demand for relatively poor quality of social housing. Rent rises forcing people to move every six months makes for a miserable existence.

Isitmebut

1. Market conditions change all the time, investments are not guaranteed.

1. Surely a law could be introduced making it illegal for banks to limit the tenancies on properties bought with btl mortgages. If that makes btl mortgages an unattractive risk for banks and they stop offering them, I don't see a problem with that- more housing stock released to either owner occupiers or e.g. institutional investors capable of buying outright and in a position to cope with the costs of regulation. So home ownership increases and/or being a landlord is professionalised (similar to say Germany where pension companies are often large scale landlords, and they cope with a level of regulation far beyond that seen in this country, and which we should be looking very closely at adopting, along with a massive building programme and increased funding to social housing).

1. I don't agree that the whole mess we are are in re housing is down to the last Labour government- it has more and deeper roots than that e.g. right to buy without allows receipts to be spent on building more social housing, landbanking, greenbelting, the divide between the economies of the north and the south of the UK, income inequality

1. If a landlord doesn't cover his loan/insurance costs with his rents and still turn a monthly profit, then why not take the acquisition of an asset/build up of equity on the property both from payment of the mortgage and increase in value (if any) into account on that? I don't see why people feel entitled to make money month on month and acquire an asset basically for free. I don't see why any private investor should be guaranteed a return...and if you think that is ok to guarantee such returns, surely you can logically have no objection to state subsidy of any industry/endeavour?

1. I don't see why less private rental properties is necessarily a bad thing. Especially if, as is likely, a decrease in supply of private rental properties is accompanied by an increase in supply of homes to potential owner occupiers at a lower cost. In the absence of a concerted building programme I think that the btl/private rental market has been cannibalistic on the homes to buy market. I think many people in the UK were happier at times when there was either a higher level of owner occupation or a higher level of people occupying secure rentals not in the private sector.

I agree with moustache and Suzanne. Who would choose private renting if they had the opportunity of the increased security of social housing or owning?

If that makes btl mortgages an unattractive risk for banks and they stop offering them,

that almost certainly won't happen. The banks will simply raise the price of such mortgages to account for the risk, or spread the risk over all mortgages.

I don't see why less private rental properties is necessarily a bad thing.

functioning rental markets are perfectly fine though, and many people don't want to/can't deal with the risk or hassle of ownership. What people seem to forget, especially in a market where there are good rental protections, is that renting is really attractive to a lot of people (transient people, low wage people, etc etc etc). The problem is that here it's an unstable way to live. When we had DCs one the main reasons we wanted to buy was to get a stable living situation.

Surely a law could be introduced making it illegal for banks to limit the tenancies on properties bought with btl mortgages. If that makes btl mortgages an unattractive risk for banks and they stop offering them, I don't see a problem with that- more housing stock released to either owner occupiers or e.g. institutional investors capable of buying outright and in a position to cope with the costs of regulation. So home ownership increases and/or being a landlord is professionalised

I think that is an important point, if social housing is to be privatised it would seem better (for society as a whole) to have rentals in the hands of institutional investors.
Perhaps with some legislation in place whereby they have to invest some of the profit into building new housing stock.

Instead we have large number of private individual landlords having a destructive and predatory effect on society

MoustacheofRonSwanson ....

'Market conditions' - can be the based on the economy, interest rates, the ability to match the TERM of a fixed mortgage funding with term of tenancy, the availability of tenants, the rental voids, tenants leaving owing 6-months rent, the price of the home should we build more than enough homes one day, the ability to LIQUIDATE the investment asap if it goes wrong.

While new State Controls from a government full of gestures has NOTHING to do with markets; messing with the ability to commercially fund the investment, the 3 x longer term of a tenancy they may not be comfortable with - all throws a honking great spanner into ‘market conditions’ because they did NOT EXIST when making that rather large investment.

Next all I see in your post are even more potential State Controls to facilitate the main badly thought out one, trying to make it more workable, when if government want to strongly encourage longer tenancies (and here is a first), why don’t Miliband look to work WITH the private sector offering ‘carrot’, rather than use his fat state stick, and legislate the bejezus out of everyone??

As to yet another Labour ‘not us guv’ on the lack of housing on their watch; they had a 160 odd seat parliamentary majority back then that never went below 66 seats to DO in housing what ever they wanted, they had a balanced budget in 2001 and not the £157 bil overspend they passed onto the coalition in 2010, they built on average around half the council/social homes the previous Conservative administration built – they even were told what to do by Barker after asking her a lack of building ‘whassup’, as immigration numbers rocketed.

What better parliamentary, economic, financial, housing intel and urgency conditions could there have been to actually DO something better than sit back with 115,000 mainly private sector homes being built a year??

The fact is we have gone past gesture political solutions to our housing problem, especially if a government thinks like you, having no problem forcing out private landlords, as more buy-to-own citizens replace those NEEDING to rent, in those homes.

And that would also account for the lack of a policy increasing the council/social rental supply of homes in a Labour 2010 general election manifesto, apparently written by Ed Miliband, when Shelter were flagging 5 million in need.

P.S, Whether looking at a German housing, manufacturing, balanced budgets, or tight money/inflation (whatever) - those were built with hard graft and planning over years - a government can't achieve such heights with a dodgy bit of legislation when everything else related to get there, is shite.

I think we need to kill this belief that anyone with enough capital has the right to a property portfolio, ie the right to line their own pockets by exploiting the basic need for a place to call home

This. Completely and in every way.

Private Landlords are philanthropists?????

LOL

Unbelievable!

being a landlord is a business. Not a crime. Not a charity. A business.

the necessities of life are not free.

learn to cope.

suzanne I await your rational explanation without insults. That technique doesn't work outside the playground, sorry.

ps according to today's Eye, council house selloffs started with the labour govt before Thatcher.

The German market is mainly rental not due to laws in place - tenancies are indefinate rolling contracts with c2 months notice. However, mortgage lending is much tighter, meaning many less people can afford to buy.

Whether looking at a German housing, manufacturing, balanced budgets, or tight money/inflation (whatever) - those were built with hard graft and planning over years - a government can't achieve such heights with a dodgy bit of legislation when everything else related to get there, is shite.

you seem to suggest that nothing should be done unless the whole system can be fixed. well, that's just much harder to do.

even building more houses won't solve this instability problem. only tenure will.