A solution to the renting crisis?

[emanonsah]

Will the government be able to find one? I'm looking to probably have to rent next year whilst we sell up and it looks a minefield

There are so many potential tenants and rents are just going up exponentially at the moment.

George Osborne tried to fix the problem by making more houses available to buy by charging landlords tax on their mortgage interest, but all this has done is raise the cost of rents even further.

Now they are bringing in rules to say that landlords won't be able to give tenants notice to move out, even more landlords are going to sell up, and so there will be even fewer houses available for the renters, meaning that rent costs will continue to escalate.

They say they are trying to get rid of unscrupulous landlords but the combination of both of these means they are forcing out decent landlords and leaving only mega landlords who own outright all their properties and don't give two hoots about their tenants

Despite the predictions of house prices dropping, these renters aren't suddenly going to be able to buy if interest rates have shot up, even if the prices are lower.

Are there any suggestions of what they could do?

Stop RTB, allow local councils to build council housing again.

Something they brought in during covid called intermediate rent. It’s provided by housing associations but you don’t have to be a key worker or qualify for social housing.

I don’t understand why it isn’t getting more publicity, actually. Once you scratch the service, there are a few things going on that will pick up the slack when ll leave the market.

Who is paying for the new intermediate rent?

@Sheenqueen

the tenant, but it is slightly lower than market rent

The government could trying to insentivise good LL's by asking for voluntary listing on housing list with council where council officers check rental accommodation to ensure it meets a set standard. In return they could reinstate the mortgage interest rates taken off rental cost. Government could bring in EPC grades to D instead of C for a five year period to give LL more time to save for £15k upgrades that will save tenants about £150 per annum. Some LL would rent to tenants waiting for social housing but are too afraid of having their house trashed. Local council could guarantee to restore any property that gets trashed by tenants if LL let to a tenant off of council waiting list. My brother in law is a housing officer for local council and has to inspect houses when tenants leave and he says fist through doors are really common. Also tenants keeping dogs/cats indoors and not allowing adequate outdoor toilet so animals defecating in house and not being CV leaned up immediately.

I understand but who is paying for the shortfall? Who is subsiding it?

"Now they are bringing in rules to say that landlords won't be able to give tenants notice to move out"

This is not true. Of course you will be able to still serve notice and evict for breach of tenancy. It's just no fault evictions they are talking about.

A move to large corporate landlords could be a very good thing if the appropriate legislation is in place to ensure standards. In Germany for example large companies act as landlords and it works well. They know the legislation, they have the reserves for repairs and upgrades, and they have large numbers of properties to tolerate vacant periods.

In the UK we have a number of have-a-go landlords who aren't aware of their legal responsibilities and don't have the cash reserves to do timely repairs or tolerate vacant periods.

It does need to be accompanied by legislation to ensure correct standards.

Limiting no fault evictions is sensible. Tenants should be able to request repairs without fear of eviction. It's bad for society if landlords can evict people to airbnb it or get somebody in on a higher rent. Society often bears the cost of this, e.g. needing to house families in emergency accommodation, or people needing to relocate to cheaper area and leave their jobs, or the long term harms of children's education being disrupted if they need to relocate.

What we do need is an efficient and quick way to get tenants who aren't paying rent, or are causing significant damage, out quickly. Waiting six months plus for a court date is a big financial drain on the landlord, and will put them off accepting tenants they view as higher risk.

But for tenants who are paying their rent and aren't damaging the property, there should be a high bar to evicting them. If you choose to enter the landlord business you should accept that it's a less liquid investment than others, where you may not be able to get your property back quickly without good reason. If you want to be able to get your asset back fast, invest in the stock market or similar, not in providing homes.

Now they are bringing in rules to say that landlords won't be able to give tenants notice to move out, even more landlords are going to sell up, and so there will be even fewer houses available for the renters, meaning that rent costs will continue to escalate.

Ok. If landlords exit the market, what happens to the house? Does it cease to exist? Does it just fall down?

Your logic is flawed in the sense that you don't talk about what happens to these properties.

If demand for buy to let drops what happens?

Prices drop. That means the multipler needed on your income to buy a house becomes more affordable. It means it potentially opens up the market to more people who were previously renting. It could mean that you also get more people buying homes outright for cash. That's not necessarily good as you may get rental monopolies forming. However, these landlords are less vulnerable to interest rates and arguably government can perhaps regulate larger businesses in this field better than one man enterprises which have no professional experience in maintaining property and don't have economies of scale.

Ultimately there is a ceiling price on rental prices though and government will have to legislate in some way if they end up with too many homeless and multiple empty homes because people cannot afford rents. It's not in the interests of big property holders to price their customers out of the market for this reason...

In the short-term I think it will discourage investment by every Tom, Dick and Harry in property - many of whom are completely unsuitable as landlords and it will lead to people having a house sold out from under them. Especially coming at a time of high interest rates where saving by traditional means looks a lot more attractive than it was with 1% rates.

It COULD, if well handled, lead to greater security, better tenancy agreements and standards in the long term.

Could be a word doing a lot of heavy lifting in the context of Liz Truss.

I don't see the policy as disastrous in its own right. Difficult and unpleasant for those affected but not necessarily the wrong thing to do.

But it needs to be managed well and that's where I have my doubts. I think it probably will be a short term total car crash as it will be handled badly. But in medium to long term? Not necessarily a bad policy.

I listened to part of that radio 4 programme on Tuesday about the issue and found it really interesting but I was in the car and so only heard the phone in part, I didn't hear any solutions being suggested, just how awful it was getting. I'm really interested in what the solutions might be. It does seem that even though landlords are being deincentivised and selling up, that this hasn't increased the stock of houses or brought prices down. And although we know that rising interest rates will do this, the renters who would be potential buyers would also be affected by such interest rate increases and therefore less likely to buy.

I haven't heard of the new intermediate rent before but I don't understand how landlords would be incentivised to allow tenants in on this rather than the current system. I defo agree that being able to get rid of destructive or bad tenants in a more timely manner will help

I have been a LL for 18 years. I have 8 rental houses, 5 X 3 bedroom and 3 X 2 bedrooms and all with gardens. I have never asked a good tenant who pays rent on time, looks after property and does not annoy neighbours to leave. I want good tenants to stay and go to lengths to ensure repairs and upgrades carried out in a timely manner. I use a small group of gas engineers maintaintece workers for all properties and my own house too. All houses are kept in excellent condition as repair cost are written off against my tax bill. I never advertise. I have a waiting list from current tenants wanting me to house their family/friends. I know many other LL and they also say they want good tenants to stay as long as possible. It does not make sense to ask a good tenant, low risk, to leave then you have to vet a new tenant, higher risk, and there is always possibility they could turn out to refuse to pay rent or trash the house. I am on favour of local councils inspecting all btl properties for standards of accommodation. There should be a register of approved rental properties. There should be lower interest paid for LL who keep their properties in good repair. Then these LL could charge less rent as paying less interest on profits. I tended to leave rents at what they were at when tenants moved in until government changed amount of tax LL had to pay on profits. It went up 4 years in a row. I had to pass some of those increases on to tenants. For example no point me paying £450 mortgage but only charging tenants £600 rent. As other cost such as insurance, maintenance, gas/electric certification, replacing appliances and accountancy cost would leave me losing money every year. Of the £450, £300 is interest charges on mortgage that used to be deductable from profit. That meant many LL kept rents low for good long term tenants. George Osborne stopped LL claiming back interest from mortgages. Hence why LL had to increase rents. Many LL sold up properties one a year to maximise capital gains tax. The government has brought in a raft of punitive measures against LL that other home owners don't have to pay. Additional 3 percent on buying a new property. Having to make house meet new EPC grade C is next. Many LL can't get above D as house is old Victorian house with no cavity wall insulation. Internal insulation makes house smaller and cost about £15k per house. Plus cost of internal redecoration afterwards. Ordinary home owners can have their own home at grade G. I am now joining other LL and going to sell 1 property each year at least to sell off my 3 Victorian terraces. My other properties are all at C standard so I might keep those. I know the tenants in the 3 properties don't want me to sell and don't want to move. In one house their 2 children were born there and have never lived anywhere else. They have been there almost 11 years. I can't sell to another LL as they will be in exactly the same position. I try think new EPC will be introduced in next year. If this is the case I will have to evict these tenants and try to help them find another home. So many families will be in the same position as my tenants. The government needs to look again and instead of moving the bar from F where it currently sits to C, needs to consider D for houses with no cavity walls. When many more houses on market they will likely be bought by cash buyers or large LL trading as a company who government allow interest on property to be taken off profits. Or bought on open market by those wanting a larger property. My tenants won't be able to buy because don't have deposit, plus if mortgage rates are going to be higher in future they will be priced out that way too. There have been more houses on market over last 4 years as many btl LL have already sold up. Has it made buying a house easier for FTB's? House prices have continued to rise, not fall.

This is the kind of thing I am hearing and I agree bringing the Victorian terraces to C will just be completely impractical. The government really need to introduce some sensible solutions to this problem.

A move to large corporate landlords could be a very good thing if the appropriate legislation is in place to ensure standards. In Germany for example large companies act as landlords and it works well. They know the legislation, they have the reserves for repairs and upgrades, and they have large numbers of properties to tolerate vacant periods.

I agree with this. At the moment housing costs are high whether you rent or buy, and with interest rate rises it may soon be more expensive to own than rent. But the overall affordability of housing is an issue that needs to be addressed across the entire market, renting and owning.

One of the biggest issues with renting in the UK is the quality of the housing and the way letting agents treat tenants. I am sure there are lots of good landlords out there but I sometimes wonder if they are aware of how letting agents operate day to day. I've rented a property that needed lots of repairs (think tile literally crumbling around the fireplace). The agency did an in person inspection every four months and I'm convinced they never passed on the issues to the landlord. It was only when the management company changed hands that anything was addressed. Just this week we almost ended up paying our rent late because the letting agent had been bought out and we were never informed that we had a new agent with new payment details.

Renting in my home country was a completely different experience. Developments were owned and managed by a corporation. If you were interested in a flat you would go to a leasing office and they would show you everything available or that would be coming available in the next few months. None of the inconvenience of having to speak to different agents to view individual flats in the same building. Maintenance staff were always available to address issues and maintain the common areas. Flats were freshly painted between tenants, etc. The first time I saw an inventory in the UK with pages and pages of notes on the defects of the property I was in shock. Everywhere I'd rented previously had always been in almost perfect condition.

The housing crisis will not be resolved until the state invests in more social houses for rent that are not subject to RTB, and builders are forced to actually deliver the affordable quotas rather than wiggling round them.

Also George Osborne tried to fix the problem by making more houses available to buy by charging landlords tax on their mortgage interest Osborne was not trying to make more homes available, this was about raising revenue.

www.telegraph.co.uk/property/buy-to-let/buy-to-let-landlords-face-ruin-mortgage-rates-rocket/

This explains the problem many btl LL face over dilemma of rent increase.

@BlueberryMuffin817, and that is exactly why I manage my properties myself. I get to know my tenants better over time, can see how they treat the house, not talking about how tidy because my own house not always tidy but if things get smashed or not. I like to have a good working relationship with all my tenants. Little things matter. If they get married or have a child I send a card and voucher. I was even asked to be a Godmother to one child by single Mum who had no family. A tub of chocolates for children at Xmas. Tin of shortbread and bottle of wine (if drink alcohol) for parents. I have babysat very occasionally for a tenant if they had hospital appointment or interview and no one to sit with child. I would not trust an agent to treat tenants as I do. Mostly because I have heard horror stories from my tenants what their previous agents could do and were like.

Exactly @caringcarer, being a landlord is a real job that should be taken seriously. One of my relatives is a landlord as his full time job. He manages the properties himself, has the skills to do quite a lot of repairs and devotes a considerable amount of time to it.

In recent years BTLs have been sold as passive investments, where you only have to make the initial purchase and your money will grow without any additional spend or effort. I've definitely encountered letting agents who seem to be afraid to upset their clients by informing they will have to pay for repairs, etc. But anyone who takes being a landlord seriously and cares about their tenants surely realises there will be costs to maintain the property and cover reasonable wear and tear.

We need professional landlords, whether that be corporations, private landlords who treat it as a job, or regulated letting agents.

On the demand side, reduce average wages via increased unemployment and recession.

On the supply side, tax incentives to make long term rentals a better option than airbnbs.

I can't be too sure of what they're going to do but if you're tired of renting and want another option, you could always try using the property software app MaryR. My friends were all in the exact same position as you and decided instead to all buy a house together. Essentially, they said that MaryR helped them to buy together but own individually (the app helped them to track who owned what out of the uneven contributions to the home etc). They loved it. If its any help, here's their website: www.maryr.co/
Good luck!

@tomsmithwrinch shall I point you in the direction of where you need to send your payment for advertising on this site to or will you be able to work that out for yourself ? At the very least hide your IP address I’ve just found you in under 30 seconds on LinkedIn ☺️

Something needs to be done. We have lots of empty retail property and many businesses are moving to smaller offices with the rapid increase in home and hybrid working following covid lockdowns. There is property available, it's just not the right type with the right amenities.

What we need are high quality conversions to residential - i.e. not the awful stuff that's been done creating hundreds of studio apartments in old office buildings - and a scheme to replace unsuitable former retail property with residential housing schemes.

@HiveBee

how did you find her IP address? Seriously

His