Gavin Barwell confirms longer tenancies will not apply to BTL

by Property118.com News Team

9:21 AM, 10th February 2017
About 2 years ago

Gavin Barwell confirms longer tenancies will not apply to BTL

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Gavin Barwell confirms longer tenancies will not apply to BTL

Housing Minister Gavin Barwell has cleared up confusion caused by the recent Housing White Paper, which called for ‘family friendly’ three year guaranteed tenancies to be offered to tenants in an effort to increase stability and security for those families that want it.confused

Barwell told Inside Housing that government calls for longer tenancies will be from agreements with housing associations, local authorities and institutional investors developing homes in the Build To Rent sector. These agreements would not be forced on private Buy to Let investors, which would be impractical anyway due to mortgage terms often stipulating a maximum of 12 month tenancies.

Barwell said “My hope is that when you get those players coming in, that will disrupt the market and will encourage other landlords to do so as well.

“I think if you tried to force people to do it at the opposite end of the market (meaning Buy to Let) I think history is very clear about what happened when you have rent controls. I don’t think that would be a good idea.”



Comments

Simon Griffith

10:24 AM, 10th February 2017
About 2 years ago

I wouldn't trust a word this chinless wonder speaks. He's the Housing Minister who said attacking letting agent's fees would be counter productive. Hammond completely ignored him a few weeks later in the budget.

Kate Mellor

10:49 AM, 10th February 2017
About 2 years ago

The key reason this will fail is that tenants do not want to make a 3 year commitment to a tenancy in my experience. We offer 12 months to anyone who passes referencing and we've never once had a tenant sign up for more than six months.

Let's face it, no landlord wants a void period. If a tenant is paying their rent and abiding by their tenancy agreement it's unlikely they'd be evicted, it goes against good business sense.

Monty Bodkin

11:49 AM, 10th February 2017
About 2 years ago

Reply to the comment left by "Kate Mellor" at "10/02/2017 - 10:49":

I think the proposal is for a 3 year commitment from the landlord but with only 1 month notice from the tenant.

In his last paragraph, Barwell seems to understand the obvious consequences if this were imposed on private landlords.

Could be good news for private landlords. Once the corporates find out how useless section 8 is for evicting non paying ASB tenants, they might force through an eviction process fit for purpose.

Kate Mellor

15:52 PM, 10th February 2017
About 2 years ago

Reply to the comment left by "Monty Bodkin" at "10/02/2017 - 11:49":

Ah! Thank you. Might have known all the commitment was to come from the landlord!! Glad we aren't going to be subjected to this nonsense just yet. Your comment did make me smile though regarding the eviction process...

Colin Marshall

10:00 AM, 11th February 2017
About 2 years ago

Kate, sorry have to disagree with you here; in the last 15 years I'd say 90% of my tennats have all signed up for a minimum of 18 months but mainly I've done 3 & 5 year agreements.

Pamela Potter

11:53 AM, 11th February 2017
About 2 years ago

I emailed Gavin Barwell yesterday with an alternative view of private sector landlords and pointed out the real consequences of shutting us all down which is essentially what the government are attempting to do and I got this response:

"What I said was not intended as an attack on landlords, simply a statement of fact. The most common cause of homelessness today is losing a private sector tenancy. That doesn’t mean the landlord is to blame. It may be the tenant has got into rent arrears or behaved anti-socially or it may be that the landlord wants to redevelop or sell the property or it may be a ‘revenge’ eviction after the tenant has complained about the property. In other words, sometimes it may be the tenant’s fault, sometimes it may be the landlord’s fault and sometimes it may be no-one’s fault. That’s not the point I was trying to make. My intention was to illustrate that more and more people are finding that when they lose a tenancy they can’t find anywhere else to live. This - as I said on Newsnight - is the the fault of governments over the last 30 or 40 years for not building enough homes. I don’t know who has prompted you to send this email (I have received hundreds of similar ones so it is clearly an organised campaign) but you might go back to them and suggest they be a little less thin-skinned."

Give him his due, he replied swiftly and sent a personal(ish) email rather than a bog standard auto-reply which is more than my own MP has done.

I will now endeavour to do as I'm told and thicken my skin, as I watch all of my hard work in building up a business, disappear one tax change at a time. Then I can watch the government fritter that money away on a Buckingham Palace refurb, while my very vulnerable ex-tenants sit in 'temporary' accommodation for the next nine years waiting for their thrown together Chinese cardboard box of a new home to appear on a piece of derelict bog land somewhere miles away from any form of structured society or career opportunity.

But that's OK, at least it levelled the playing field and all of those frustrated first time buyers are sorted, aren't they?

Monty Bodkin

12:54 PM, 11th February 2017
About 2 years ago

Reply to the comment left by "Pamela Potter" at "11/02/2017 - 11:53":

Well done Pamela for getting a response.
What did you say in your email to him?

Luk Udav

13:30 PM, 11th February 2017
About 2 years ago

Thank you Pamela.

Can I add another reason for the increase in homelessness, which can't be blamed on anyone else than the Tories: Universal Credit. I see Barwell din't mention it.

I have two tenants being moved onto UC. The LA is quick to cut housing allowance from what they were on before, but one has been waiting now over 3 months for the housing element to be worked out (the other has only (!) been waiting 8 weeks.) They are great tenants and I know they'll get the money at some point and pay, but were I in need of the money I would have no alternative.and they would be homeless soon.

This is entirely the fault of the Tories and the dreadful Ian Duncan Smith. UC is a shambles and as it's rolled out more and more the problems are getting worse.

Pamela Potter

13:36 PM, 11th February 2017
About 2 years ago

Reply to the comment left by "Monty Bodkin" at "11/02/2017 - 12:54":

Here is my email Monty:

Dear Mr Barwell

In order to assist you in your quest to do the right thing for the housing sector I feel that I need to correct a couple of misconceptions you seem to have about the Private Rental Sector:

1. There are more tenant evictions conducted by Housing Associations than Private Sector Landlords
2. Most tenancies in the private sector are ended by the tenants.
3. If a tenant is evicted by a private sector landlord it will, in the majority of cases, be because of rent arrears or unacceptable behaviour, or damage to property (regardless it will still cost the landlord probably a whole year's profit to get said tenant removed).

I am a private sector landlord and am currently in the process of selling the vast majority of my houses. Despite the perception of greedy landlords, like many private sector landlords, I do not charge enough in rent to be able to absorb the impending changes to the tax system. I do not need to wait four years when Section 24 is fully implemented for my portfolio to become financially impossible for me. It will be impossible for me in April 2017.

As the majority of my tenants are vulnerable adults with mental health issues, disabilities or on low incomes with tax credit support, single parents, etc. it would cause them no end of anxiety to try to find the increased rents I would need to charge. So I just can't do it. Absolutely none of them are in a position to buy their own homes now or in the future and will always need to rely on the council for their housing. So even if the government's argument that they are making life easier for the first time buyer (they aren't) nobody is even acknowledging the impact on the more vulnerable in society.

So, like many many private sector landlords (the Government's 1 in 5 figure is pure fantasy) I am selling and handing my lovely tenants back to the Council Housing Department where, I have no doubt, they will be put, at great expense to the tax payer, into 'temporary' accommodation until something better comes along. I have checked with Gosport Council and there is currently a 9 year waiting list for 'something better'. I have also been offered £1,000 incentive to take on more housing benefit tenants such is the reliance of the local housing department on the private rental sector to fill the gap in their housing needs.

George Osborne devolved power over housing budgets to Local Authorities at the same time as he proposed Section 24. I see this as nothing more than self preservation and an acknowledgment of the need to distance himself from the guaranteed housing chaos this is going to cause amongst the more vulnerable in our society. Please look into the effects of Section 24 in Ireland when it was implemented there in 2009 (in Ireland it wasn't done retrospectively either).

Please do not think this is an easy option for me financially either. It is no straightforward task removing council tenants. The council will advise all tenants to stay put until Section 21 is served and then until the bailiffs arrive which can take months and months at great cost to the landlord. So I am not anticipating making anything other than a loss from all of this.

In 2015 a cross party House of Lords Economic Affairs Committee concluded that a minimum of 300,000 was needed in England alone to meet the current housing crisis. The Government White paper has set a target of 250,000, already a shortfall. And things are only going to get worse as more private sector landlords sell off their properties.

So please make sure that you are not espousing an informed view that will eventually come back and bite you on the backside Mr Barwell because, once the chaos begins, I can assure you there will be a significant number of ex-private sector landlords more than happy to point out the strong (yet uninformed) position you and many other politicians are taking on this.

Thank you for your time."

Monty Bodkin

13:38 PM, 11th February 2017
About 2 years ago

Reply to the comment left by "Colin Marshall" at "11/02/2017 - 10:00":

in the last 15 years I’d say 90% of my tennats have all signed up for a minimum of 18 months but mainly I’ve done 3 & 5 year agreements.

That is an interesting first post on the forum and at odds with most real world private landlords.
Were the agreements signed as a deed?
How do you evict non paying or anti social tennats?

I have had many 5 year + tenants and not one of them have wanted to sign up for more than 6 months/ 1 year*.

The majority of tenants don't want 3 year tenancies, why should they pay for the minority who do? At least Gavin Barwell seems to understand this.

(*The 1 year fixed tenancies were students and workers on fixed term contracts.)

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