MNHQ here: Shelter's campaign for longer rental contracts

[FinnMumsnet]

Hello,

Shelter, whom we’re currently featuring as a Guest Campaign, are calling on the Housing Minister, Gavin Barwell, to give renters the option of secure five-year contracts. You can find out more and add your voice to their campaign here.

Shelter explain: “Renters would have the opportunity to stay in their home for a minimum of five years, but they wouldn’t be locked in. Renters with five year contracts would be able to leave their home at any time by giving two months’ notice. If their family grows or a new job opportunity comes up, they may well want to move. But if they don’t, they can be certain about where they’ll be living for the foreseeable future.

“Five-year tenancies would also give landlords more security, reducing periods of vacancy and lost rent. They would still be able to sell their home if they needed to.”

Last year, Shelter received this email from 'Rachel,' a Mumsnet user who had heard about the campaign; Rachel explains the impact that unstable and insecure renting is having on her and her young son’s life.

We know from discussions on-site that insecure private rents are an issue affecting many Mumsnet users -- and with 87% of respondents to our rent survey last year saying they would prefer to buy in an ideal world, we also know that, for an increasing number, private renting is the only option. It also seems to be an issue majorities of Mumsnet users would like to see action on:: our 2015 General Election survey found 80% support for tougher regulation of private landlords, alongside funds for tougher enforcement by Local Authorities, and 75% support for incentivising landlords through the tax system to offer secure, fixed-rate, long-term rentals. Both proposals had net backing from supporters of all political parties.

Feel free to find out more about Shelter’s campaign here.

Thanks,
MNHQ

I am a landlord most of my tenancies last 5years before the tenant moves due to family job etc. I have a few 10years plus because they know I am a long term landlord they are happy to just take a six month tenancy and let it roll into periodic.

Mortgage companies do not allow a tenancy longer than 12 months.
This is a red herring and sometimes I think shelter just come up with things to keep the funds coming in.

The NLA say I think 93% of tenancies are ended by the tenant.

But things are likely to change on the tenancy front and the reason is Section24 of the finance act which the government has brought in without any consultation on how it will affect tenants.
Basically they are going to tax landlords on the mortgages they pay to the lender , so the landlords biggest cost then the mortgage company will be tax of the money rec from the landlord.
This will see many landlords go bankrupt or sell up or put up rents just to try and survive if they have mortgaged buy to lets.
It is nothing short of a tax grab by the conservative government and the homeless bill will rocket.
If your landlord says they are selling or the rents are going up ask them if its due to Section24.

Perhaps Shelter should consult Mark Alexander at Property118 regarding

Deed of Assurance strategy as an alternative to long term tenancies

Hello Coolgirl

Yes I know about S24 and that it's called the Tenant Tax. It's a most ludicrous thing brought in by creepy George Osborne and for some very strange reason Shelter support it.

If it drives up costs for landlords then they only have limited options:

1. Absorb the extra cost
2. Put up rents
3. Evict the tenant if they can't afford the extra rent and get someone in that can
4. Evict and sell up
5. Cut back on maintenance costs

How on earth does Shelter think that this tenant tax is a good thing??? W

I know quite a number of professional landlords and I know that everyone of them never increases rents unless there is a change of tenant. They like to keep hold of good people so don't want to give them a reason to move. Now though it seems Government are making it impossible for them to do this. It strikes me as complete madness.

Could you link to the legislation about mortgage companies not allowing tenancies longer than twelve months please?

Hopefully lots of amateur landlords will have to sell up and this will increase properties available to buy.
The rental market directly affects house prices, 37% of families with children in rental accommodation is too high with the insecurity that it brings.

Oh I didn't realise that the last posts were adverts, sorry.

There is no such legislation, it's in buy to let mortgage lenders' terms and conditions

I don't think that it is in every mortgage company.

No, it's not, I have just checked.

www.moneymarketing.co.uk/should-buy-to-let-lenders-allow-longer-tenancies/

And that's an old article, quite a few more allow it now, just after I have checked online.

Hi
It was not an advert as such but something that should be considered
Other countries that offer longer tenancies also give landlord tax incentives the tenants have to in some cases install kitchens.

Many people with a few properties have done so for retirement planning so I don't agree that government policies should force them to sell
Many families are unable to buy due to mortgage multiples bad credit and low wages zero hour contracts
For these families a reduced rental market would not be a good thing
Although its always being said that BTL pushes up house prices its been proved by experts it actually very very small a few thousand at best
What could happen is a flood of property on market no one can buy.
If house prices dropped many ftb will be I negative equity
Time and time again government don't listen to the experts but go for an easy target and a vote winner
Which in part is why we are in this mess
Shelter is given funds from government so I don't see them as independent rather a pawn the government plays for its own advantage
I wish the public would not believe all the rubbish which gets pumped out in the media
Please take time to digest it and look between the lines

Good news, at least half of buy to let lenders now offer 24 month tenancies at least.

blog.shelter.org.uk/2016/06/mortgage-lenders-open-up-buy-to-let-to-longer-tenancies/

We run a business which deals with housing stats, projections and SHMAs. I am pretty clued up with the evidence about why people rent and the effect of renting on house prices in different areas.

Although its always being said that BTL pushes up house prices its been proved by experts it actually very very small a few thousand at best

This is utter nonsense. Which experts are these? Can you link their research?

You were advertising too.

Why is a two year, two way legal commitment a good thing?

Surely a longer term commitment from a landlord and a shorter term commitment from a tenant is much better?

Did you check out "Deed of Assurance"?

Help to Buy has added £8,250 to the average house price — an increase of 3 per cent on the average cost of a UK home.
Does your stats agree with the above?
Have you any reports on your stats I can access online?

A detailed analysis was published in 2008, however, which measured the effect of
BTL on house price growth between 1996 and 2007. It was found that only
7% out of the 150% rise in property prices between 1996 and 2007 was due to
increased lending to landlords; another way of putting it is that 143/150ths of
those price rises were not associated with landlords’ activities at all. This was
according to a report published in 2007 by the National Housing and Planning Unit.

The actual and counterfactual house prices can be compared in each quarter from 1996 Q3. For
instance, taking the last period that a comparison can be made in 2007 Q2, the actual mix
adjusted house price was then £182,667 and the counterfactual price was estimated to be
£169,182. This implies that BTL lending had increased prices by £13,485 (or 7.4 per cent) over
and above what they would otherwise have been. These estimates represent an upper bound on
the BTL impact because, as mentioned earlier, the counterfactual assumes that non-BTL
advances would have remained unchanged. In reality, if BTL mortgages had not existed, there
probably would have been some upward shift in non-BTL mortgage advances. The impact of BTL
on prices may therefore have been less than he 7.4 per cent reported for 2007 but it is not clear
by how much because it is difficult to estimate would have happened to non-BTL lending under
this scenario

This is problematic.
How will a landlord get a house back from a tenant who has defaulted on the rent?
The current law gives the tenant absolute right of tenure for six months. If this is extended to 5 years a landlord can see up to 60 months of unpaid rent before they can get the property back along with the cost and uncertainty of legal action.

Coolgirl21 those stats are not up to date or sourced properly. I couldn't possibly link to ours as of course it would identify me.

I merely refuted your suggestion that you were some sort of expert. You are either the person that you were advertising for (a landlord who owns huge housing stock and offers tax avoidance advice) or someone who supports his values (which I do not).
We work for the public sector with housing projections. I don't but dh is a statistician.

I am going to namechange now.

coolgirl you have googled, then copied and paste from this

webarchive.nationalarchives.gov.uk/20120919132719/http:/www.communities.gov.uk/documents/507390/pdf/684943.pdf

Unbelievable

I have never said I was an expert but pointed you to a report that said btl only increased house prices marginally and people should not believe everything the government say

Unbelievable that you quoted
Utter rubbish but a report provides the stats😁

If u can't give me the link perhaps provide some information here on what % you think btl as increased house prices and why you think it's not worth even looking at deed of assurance.?

Fuck off with your campaigning for landlords bullshit, coolgirl. PS speaking for landlords and their interests is the opposite of cool.

I have a question for you foxesarefriends.

As I say, I know a number of landlords because of what I do. One of them has a large number of HMOs (Houses in Multiple Occupation). I don't know exactly how many but it's more than 20 and may be even as many as 30. They are all big houses and mostly 3 storey town houses.

He doesn't know it but I've been in one of them because I know one of his tenants, though she's now gone on to buy a house herself. The shared house was very nice. It was clean and modern and were I single and looking for somewhere cheap to live I would be very happy to live in one of his places.

Let's just say, for sake of argument he owns 25 of these houses. There are at least 5 people in each and often 6 from what I'm told. So that's at least 125 tenants living cheaply and in nice places (judging purely from what I've seen and been told). This landlord is a switched on man and only wants good tenants so wouldn't let his houses fall into disrepair.

So my question is, what would be the effect on starter home house prices in the area if he suddenly evicted all of these people and converted the houses back to less efficient family homes?

It is clear from your post you have a problem with landlords
Many landlords are good people who provide great homes for many people who don't want to or are unable to buy
If 5 year tenancies come in as already been raised if the person gets into difficulties how do you end the tenancy
If landlords find they will be tied in without hope of removing due to problems then many might sell
How would this help tenants?

I hope you don't mean me Coolgirl!! You are referring to charlestrenet aren't you?

If you do mean me then I can assure you that I am not anti-landlord, far from it. I think there is an enormous amount of rubbish spoken in regard to them. If there is one case of a bad landlord then the whole lot of you are labelled as bad. Why this doesn't seem to apply to anyone else, like plumbers for example, I have no idea.

The press like to go on about landlords pushing up house prices but I'm really not sure this is based on any factual evidence. I like to think for myself and the more I think about this point the more I think the opposite is true. That's why when foxesarefriends says what she does I question it.

I think the answer to my question to her is obvious but I hope she will reply. Maybe she has a different take on things and can show me I am wrong.